A.I. Chipmaker Nvidia's Revenue Jumps 69% to $44.1 Billion

New York Times

2 days ago

Nvidia's business prospects have been whipsawed by the U.S. government lately. Last month, the government blocked the sale of artificial intelligence chips to China. Weeks later, it approved the sale of similar chips to the Middle East.
Amid the turmoil, Nvidia still maintained its breakneck growth as the leading provider of the computer chips used for building artificial intelligence.
Nvidia said on Wednesday that sales in its most recent quarter rose 69 percent to $44.1 billion from a year earlier. Its net income rose 26 percent to $18.78 billion. The company exceeded Wall Street's expectations for sales of $43.28 billion, but fell short of predictions for a profit of $19.49 billion.
Nvidia's revenue and profit rose despite it saying on Wednesday that the Trump administration's restrictions on chips to China would cost it $5.5 billion. The restrictions have pushed Nvidia out of the market for A.I. chips in China, the world's largest buyer of semiconductors, which are used to power smartphones, cars and other electronics.
Nvidia also projected that revenue in the current quarter would rise 50 percent from a year ago to $45 billion, as it expands sales of its newest A.I. chip, Blackwell. The sales forecast is in line with Wall Street's prediction of $45.75 billion, suggesting that the tech industry's embrace of artificial intelligence is in its early stages, with ample room to run.
Shares in Nvidia rose more than 4 percent in after-hours trading. It finished the trading day as the second-most-valuable company in the world behind Microsoft and ahead of Apple, with a market value of $3.3 trillion.
'Countries around the world are recognizing A.I. as essential infrastructure — just like electricity and the internet — and Nvidia stands at the center of this profound transformation,' Jensen Huang, the company's chief executive, said in a statement.
The company is showing its strength, even among the tech industry's largest companies. For the first time in the A.I. era, its quarterly sales surpassed those of Meta, the social media pioneer. Nvidia's net income was 13 percent larger than Meta's profit in their most recent quarters.
Nvidia has been the early winner in the tech industry's race to develop artificial intelligence. Mr. Huang cornered the market on A.I. chips by being the first chipmaker to develop the software and servers that would train A.I. systems to recognize images and predict words.
But government officials have grown increasingly alarmed about the way A.I. could be used by adversaries like China to develop autonomous weapons and coordinate military strikes. Those worries have led Washington officials to crackdown on Nvidia's sales.
Mr. Huang spent much of the past few months pushing back on that by traveling the world to meet with government officials. An April meeting with President Trump proved to be unsuccessful when the Commerce Department later pushed forward on limiting sales to China. Mr. Huang later flew to Beijing, where he pledged to find a new way to sell chips there, and then to Taiwan, where he complained that the U.S. government's restrictions had been a failure.
His efforts haven't changed the trajectory of Nvidia's business in China. Since the U.S. government began restricting chip exports, Nvidia's sales in China have been cut to 13 percent of total revenue from 21 percent two years ago.
But Mr. Huang has had more success in persuading the U.S. government to loosen up sales to other countries. After his urging, the Trump administration rolled back Biden-era rules that restricted A.I. chip sales abroad. The change paved the way to a blockbuster deal this month between the United States and the United Arab Emirates to build the world's largest international hub of A.I. data centers.
Nvidia has made selling more chips to governments a key part of its strategy. The company relies on customers like Microsoft, Amazon, Google and Meta for a large portion of its sales. It wants to expand its customer base by adding buyers across Europe, Asia and the Middle East, where Mr. Huang has said A.I. could be part of the national infrastructure much like a telecommunications network.
The United States also doesn't have the energy resources to support the current demand for data centers. The maximum amount of power available this year for many companies is 50 megawatts, enough to support about 25,000 of Nvidia's newest A.I. chips. By comparison, OpenAI is planning a 200-megawatt data center next year at an A.I. campus in Abu Dhabi that could support 100,000 of Nvidia's chips.
The deal was important because Nvidia has a window to sell to countries before competition for A.I. chips increases, said Holger Mueller, principal analyst at Constellation Research, a tech research firm.
'Now they're the only game in town,' Mr. Mueller said of Nvidia. 'These Middle East countries really need them.'