Nvidia CEO Jensen Huang said AI would drive long-term demand because it is the “single most powerful force of our time.”
Nvidia reported earnings and revenues that beat analysts’ expectations as demand for graphics and artificial intelligence chips picked up in the second fiscal quarter. Huang also said his company’s near-term growth will come from gaming and a couple of variants of the company’s artificial intelligence chip business: inferencing and AI at the edge.
During a conference call with analysts, Huang said there are more than 4,000 AI startups working with the company, as compared to 2,000 AI startups in April 2017. In an interview with VentureBeat, Huang said the actual number of AI startups Nvidia is tracking is closer to 4,500. But he added that this would take a while to translate into huge results for such applications as self-driving cars, an area that is riding the final, long-term wave of AI growth.
Santa Clara, California-based Nvidia makes graphics chips (graphics processing units, or GPUs), and it found that such chips were good for AI processing such as recognizing objects.
But while AI is on the growth path, gaming is still the biggest part of the business. Nvidia reported earnings per share of $1.24 on revenues of $2.58 billion in the second fiscal quarter ended July 31. Gaming was about 50.3% of total revenues, and GPUs were 81% of revenues.
Huang said gaming is going through a revival thanks to the real-time ray tracing technology in the company’s latest RTX graphics chips and Turing architecture. RTX chips had a slow start last fall because games weren’t ready for the nuanced lighting and shadows that RTX brought.
But as RTX has waterfalled through the product line and become cheaper, gamers are picking it up, helping to produce $1.3 billion in gaming revenue in the quarter.
During the quarter, Nvidia beefed up its GPU lineup with GeForce RTX 2060 Super, GeForce RTX 2070 Super and GeForce RTX 2080 Super products. New support for real-time ray tracing is coming in with support announced for Call of Duty: Modern Warfare, Cyberpunk 2077, Watch Dogs: Legion, and Wolfenstein: Youngblood.