The BIG AI Idea: The NVIDIA Report

Hi, AI Futurists!

We are kicking off a weekly edition of the AI FrontierX:

The BIG AI Idea

Each week we will dive deep into one big idea, game-changing company, or groundbreaking technology so that you gain deep insight about what matters in 5 minutes.

We are starting The BIG AI Idea with the biggest AI company of all: 

NVIDIA

NVIDIA represents the pinnacle of the AI value chain. With all the hype surrounding AI, as the leading company in the AI age, NVIDIA’s stock has increased by 241%, making it the 3rd biggest company in the world, compared to Microsoft’s stock, the biggest company in the world, with a yearly growth of 49%.

Today marks the most significant day of the year for AI.

The NVIDIA GTC AI Conference is taking place from March 18-21, commencing with a 2-hour keynote speech by Jensen Huang, CEO of NVIDIA. The GTC Conference will host over 900 talks, workshops, and panels, as well as more than 300 exhibitors. It is where all the leaders of AI come together.

You can learn more about GTC here.

You can still register free of charge for the GTC virtual event here.

Let’s delve into today’s topic on the first episode of the BIG AI Idea Report: NVIDIA’s AI and the Path to Becoming the Biggest Company in the World.

• Understanding NVIDIA. Creating the technology before the product exists.

• Understanding Jensen Huang. The Visionary CEO with a Unique Leadership Approach

• Understanding NVIDIA's AI. Accelerated Computing and Key Factors in Success

• The Anticipated Announcements of Jensen Huang's GTC Keynote

• Is It Worth Buying NVIDIA's Stock

NVIDIA was founded in 1993 by Jensen Huang. The company is known for its GPU (Graphical Processing Unit) technology, which it invented in 1999. GPUs were initially built for the PC gaming industry. They redefined computer graphics and ignited the era of modern AI. 

NVIDIA offers both hardware and software solutions. As for hardware solutions, the most important products are H200 GPUs, and Jupiter supercomputers, and the upcoming B100 Blackwell GPUs. As for software solutions, the most important ones are CUDA (Compute Unified Device Architecture), a parallel computing platform and application programming interface (API), and Hopper, a GPU microarchitecture designed for data centers. 

The main advantage of NVIDIA comes from foreseeing the future way before its competitors and owning the technology of accelerated computing, which paved the way for general-purpose AI chips. 

The company has great advantages over its competitors thanks to its chip technology’s versatility, speed, efficiency, and overall product-market fit so much so that NVIDIA has a market share of 80% for AI chips. 

Jensen Huang calls NVIDIA a tiny company with only 30,000 employees, supposedly comparing it with Microsoft (221,000), Google (182,500), or Apple (161,000). As expected, the company is growing fast with over 1700 job openings. 

Thanks to the AI hype and being the leading AI company, NVIDIA is growing with the most brilliant minds in the world lining up to work in the company. You can check out NVIDIA job openings on its career platform here and Linkedin here.

Jensen Huang, CEO of NVIDIA worked in all kinds of jobs, including washing dishes, before pursuing a career as an electrical engineer and founding NVIDIA more than 30 years ago.

In his interview at Stanford, he says: “That’s why I don’t see anyone or any question beneath me.”

Jensen says he tries to answer any questions from any level of his employees when he can. He believes sharing insight and empowering them is a key part of his leadership style. He micromanages and learns all aspects of a process, much like Elon Musk.

Again, as Elon Musk does, Jensen Huang strongly believes in the First Principles Method, which involves deriving solutions or understanding complex systems by breaking them down to fundamental truths or basic principles, enabling deeper and more accurate analysis.

Even if the company is extremely successful, Jensen Huang sleeps every night thinking that a competitor can come up with a new product that can kick them out of the market. This paranoia helps him keep alert for innovation.

Also, he is aware that he works with extremely smart people and he says he works with much smarter people than him. This shows that he works with A-people and A-people want to work with other A-people. The leader creates the character of the company.

During his speech at Stanford, Jensen Huang expressed his perspective on the value of pain and suffering for students: "For all of you Stanford students, I wish upon you ample doses of pain and suffering."

He suggests that encountering difficulties and setbacks can refine one's character, instill resilience, and ultimately lead to personal growth and success.

If you are interested in learning about Jensen Huang’s personality, management, and leadership style, his view on the future of AI, and more, you may want to watch his 1-hour interview at Stanford here.

Huang's message underscores the idea that enduring pain and suffering can be transformative, shaping individuals into stronger, more capable individuals capable of achieving their goals.

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From pioneering GPUs for accelerated computing to spearheading the AI revolution, NVIDIA's journey for over 3 decades is a testament to its unwavering commitment to pushing the boundaries of technology.

Let’s explore NVIDIA's transformative technologies and products that have positioned it as a global leader in AI.

NVIDIA's AI Odyssey. NVIDIA's trajectory in AI spans 30 years, with GPUs serving as the cornerstone of its accelerated computing technology. This strategic foresight laid the foundation for the company's pivotal role in powering AI applications across industries.

Taking a Leap of Faith. NVIDIA's bold move to invest in a technology before it had a market is a testament to its visionary leadership. As Jensen Huang aptly puts it, "AI has now hit the tipping point," underscoring the company's foresight in anticipating the transformative impact of AI on industries worldwide.

Revenue Milestones. In 2023, NVIDIA achieved a staggering total revenue of $60.9 billion, marking a remarkable 126% increase from the previous year. A significant portion of this revenue, $47.4 billion, was attributed to the data center computing and networking segment, highlighting NVIDIA's dominance in powering AI infrastructure globally.

Unveiling Revolutionary Technologies. NVIDIA's product portfolio boasts an array of revolutionary technologies poised to redefine the AI landscape.

• Accelerated Computing. Leveraging GPUs for AI tasks, NVIDIA accelerates computational speed and efficiency, paving the way for transformative AI applications.

• H200 GPU. The release of the H200 GPU in November 2023 set a new standard for processing massive datasets in GenAI and HPC. With 141 GB memory and 4TB per second bandwidth, the H200 is a game-changer in AI technology.

• B100 Blackwell GPU. Anticipated to double the performance of the H200 GPU, the B100 Blackwell GPU promises unparalleled processing capabilities for AI and HPC applications.

• CUDA. NVIDIA's Compute Unified Device Architecture empowers developers to harness GPU parallelism for accelerating computations in diverse applications, including scientific simulations and deep learning.

NVIDIA's relentless pursuit of innovation and its transformative technologies have solidified its position as a global leader in AI.

NVIDIA always makes significant announcements at GTC keynotes, and this year will be no exception, according to Jensen Huang.

You can watch Jensen Huang's keynote speech from 2023 here.

Here are the most anticipated announcements from NVIDIA:

• B100 Blackwell AI GPU. Set to be released by the end of 2024, the B100 Blackwell AI GPU will be unveiled during Jensen Huang's keynote speech. Rumored to at least double the performance of the H200, which debuted just five months ago, the B100 is expected to offer superior speed and efficiency at an affordable price point.

• Use Case Expansion. Jensen Huang has hinted at NVIDIA's involvement in future technologies, including FSD (full self-driving) cars, sovereign AI platforms developed by countries, scientific research such as cancer treatment, robotics, climate change mitigation, video production, and more.

• Partner Collaborations. GTC will feature talks from industry leaders such as OpenAI, Microsoft, Amazon, and Google, shedding light on NVIDIA's AI initiatives and partnerships.

NVIDIA's Mission: Accelerating Computing Beyond Limits

At GTC 2024, NVIDIA CEO Jensen Huang delivered a keynote that underscored the company's overarching mission: to propel computing beyond conventional boundaries through accelerated computing. Emphasizing a strategic shift towards specialized chips and boards over general-purpose ones, Huang delineated NVIDIA's commitment to its original vision.

Watch the Full 2-Hour Keynote

Highlights from the Keynote

Introducing the Blackwell Platform: A New Era of Computing

A pivotal announcement at the keynote was the introduction of the Blackwell platform, a groundbreaking advancement in computing technology. At its core lies the Blackwell architecture, featuring the Blackwell GPU, poised to usher in a new epoch of computing capabilities. With the ability to facilitate AI models with up to trillion parameters, the Blackwell platform heralds a paradigm shift in efficiency, performance, and scalability for AI applications.

Unveiling Blackwell GPUs: Powering the Future of AI

Highlighting the prowess of the Blackwell GPUs, Huang revealed staggering performance enhancements, boasting speeds between 2 and 30 times faster than previous generations across various metrics. Notably, these GPUs exhibit remarkable efficiency, marked by significant improvements in sparse matrix computations and enhanced memory bandwidth. The keynote illuminated the transformative potential of Blackwell GPUs in reshaping the landscape of computational power.

Innovations in AI Tools: Transforming Industries

Beyond hardware advancements, NVIDIA showcased an array of innovative AI tools tailored for diverse applications. For instance, tools tailored for automakers working on self-driving cars promise to augment the intelligence of autonomous vehicles. Similarly, offerings aimed at roboticists seek to elevate the capabilities of robots, enabling them to navigate complex environments with enhanced autonomy.

The Significance of Generative AI: Shaping the Future of Computing

NVIDIA introduced the NVIDIA NIM software platform, designed to streamline the deployment of AI models. Leveraging NVIDIA's cutting-edge hardware, NIM accelerates companies' AI initiatives while providing compatibility with models from various sources. Integration with platforms such as Amazon SageMaker and Microsoft Azure AI underscores NIM's versatility and potential to catalyze AI adoption across industries.

Throughout the keynote, there was a resounding emphasis on the transformative potential of generative AI. Huang underscored its capacity to revolutionize industries, showcasing its prowess in generating innovative solutions and unlocking new frontiers in creativity.

The GTC 2024 keynote encapsulated NVIDIA's unwavering commitment to advancing computing through accelerated computing, as evidenced by the introduction of the Blackwell platform, GPU advancements, innovative AI tools, and the transformative potential of generative AI.

If Tesla is the dominant leader in EV stock, then, NVIDIA represents what AI is and can be thanks to its leading GPU technology and its market share.

Let’s speak numbers.

NVIDIA has a market share of 80% in the AI chip industry. The company had a head start with GPUs offering HPC (as Tesla did for EVs).

The projected CAGR from 2023 to 2028 (compound annual growth rate) for AI chips is 50%. 

The GPU Market Size. The total market size was $56 billion in 2023. It is projected to be a staggering $773 billion by 2032, indicating a 13-fold growth rate. NVIDIA has the lion’s share of GPUs, and AMD is projected to receive 15% by the end of 2024.

Considering the above numbers, NVIDIA may be considered as the top- performing company with a dominant market share in the AI space, which will be the dominant growth industry for the foreseeable future. 

However, the company stock has already increased dramatically, 241% in a year. Therefore, it may be best to review its stock indicators of PE ratio, ROE, EPS, and DYR to evaluate whether NVIDIA may be a great investment or not.

With the above evaluation in mind, the top choices of AI FrontierX are NVIDIA, TSMC, Intel, and AMD, in that order.

These indicators suggest that despite NVIDIA's remarkable stock gains, its earnings have been so significant that there is still ample room for further growth.

Additionally, TSMC stands out as the dominant foundry, commanding a 70% market share in AI chip manufacturing. Despite its undervaluation at $617 billion, its stock has only increased by 49% in the past year, compared to NVIDIA's 241%. TSMC manufactures the majority of AI chips for both NVIDIA and AMD, key players in the AI chip market.

That's it for today. Hope we are expanding your AI Horizons a little every day.

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