If there was any doubt about the strength of the AI boom in the stock market and the broader economy, Nvidia (NASDAQ: NVDA) just put those questions to rest.
For the first quarter of 2024, the AI chip titan just posted another blockbuster earnings report, including year-over-year revenue growth of 262% overall and 427% in the data center segment, where the AI revolution is taking place.
Those numbers weren’t a huge surprise to those that have been following the stock, but they were still better than expected as was the company’s guidance for the second quarter. It was enough to add roughly $200 billion to Nvidia’s market cap.
However, what really stoked excitement for the artificial intelligence revolution was commentary from Nvidia CEO Jensen Huang, indicating that growth in the AI market was still in its early stages and that demand was still soaring, outstripping supply.
For example, Nvidia noted that 40% of data center revenue was the result of AI inference, meaning that training, the other key component of creating generative AI models, likely made up a majority of data center revenue in the quarter. The company said that both training and inference were growing “significantly.”
That’s important, because inference is expected to eventually be a much larger part of data center demand than training since inference is the part that comes after training. If AI inference demand is still smaller than AI training demand currently, then that means the companies and organizations using generative AI are still in the very early stages of scaling generative AI demand.
Image source: Getty Images.
The AI power struggle
Running generative AI models consumes enormous amounts of power, and the issue has mostly gone overlooked thus far in the generative AI boom. Predictions about generative AI power consumption vary, but some say it will impact the electrical grid in ways not seen since the spread of central air conditioning in the 1960s. According to Goldman Sachs, data center power demand is expected to grow 160% by 2030.
If those estimates are accurate, the real winners in the…
..
