At the moment, artificial intelligence (AI) is well-discussed and investors recognize it as a big deal. Nvidia’s explosive growth (NVDA -2.69%) Our business performance and stock price prove this.
But unless you follow Nvidia CEO Jensen Huang closely, you might not understand just how big AI is going to get. Huang has used the term “sovereign AI” in past discussions. He just explained to investors what that actually means and why it’s great news for Nvidia shareholders.
Image source: Getty Images.
Hwang recently met with the prime ministers of Thailand and Vietnam during a tour of Southeast Asia in early December. He wants to help countries in the region and around the world leverage their domestic data and workforce to expand their computing infrastructure to develop and leverage AI. And the market seems huge.
unparalleled growth
It’s hard to imagine Nvidia continuing on its path of incredible growth. Sales have increased explosively this term. Over the past nine months, Nvidia reported revenue of $91.2 billion. This is an increase of 135% compared to $38.8 billion in the same period last year. Sales are more than four times higher than two years ago.
Much of that is coming from Nvidia’s data center division, as big tech companies invest significant capital to quickly meet the computing power needs of AI applications. Of course, investors noticed, and the stock soared, rising 340% in three years.
One might think that growth will eventually slow down, but NVIDIA is still capacity-constrained as demand continues to grow. Nvidia is also working to stave off competition with its Blackwell GPU (graphics processing unit) architecture, which it will launch this year, and has already announced its successor to Blackwell, the Rubin platform. In explaining the company’s development plans, Huang said: “We have a cadence of the year. Our basic philosophy is very simple: Build the entire data center scale, and then break it down and sell it (to customers) on a cadence of the year. We push everything to the limits of technology.”
And Huang knows the demand extends beyond big tech companies. That’s where sovereign AI comes in, and why Huang has been traveling the world in recent months.
20 trillion dollar market
Mr. Hwang’s recent visit to Southeast Asia began with a meeting with the Thai Prime Minister. They discussed how investments in AI can drive the country’s innovation in many areas that will benefit Thai people. Mr. Huang touted Thailand’s sovereign AI as follows:
The most important part of artificial intelligence is data. And the Thai data belongs to Thai citizens. Thailand’s digital data encodes its people’s knowledge, history, culture, and common sense. It should be harvested by your people.
And that’s true in many countries. According to a recent paper from International Data Corporation (IDC), a global market intelligence and data provider, AI will contribute $19.9 trillion to the global economy over the remaining 10 years alone. By 2030, 3.5% of global GDP is expected to be driven by AI investments.
Nvidia puts its boots on the ground
Nvidia is leading the way with more than just market-leading AI platform products. Mr. Hwang’s visit to Southeast Asia had several concrete results. He announced that Nvidia will open a new research and development (R&D) center in Vietnam to accelerate AI development.
The center plans to foster innovation in several sectors of the fast-growing economy. Mr. Huang said the company will partner with Vietnamese researchers, start-ups and other business organizations. This country is not new to Nvidia. The company said it has been investing in Vietnam’s technology ecosystem for eight years. This includes collaboration with dozens of AI startups and universities across the country.
Investors should pay close attention to Mr. Hwang’s words and actions. His recent trip to Southeast Asia offers something of a blueprint for how capital investment in AI will continue to grow. This should keep Nvidia shareholders happy in the coming months and years.
