Countries building their own AI models to cater to native languages and specific needs are significantly increasing demand for Nvidia’s chips, as generative AI gains prominence globally. Nvidia’s forecast for third-quarter chip sales fell short of investors’ high expectations, but the company noted a surge in new customers, including governments investing in AI infrastructure.
Chief Financial Officer Colette Kress revealed that sales from nations developing custom AI solutions are expected to contribute low double-digit billions to Nvidia’s revenue for the fiscal year ending January 2025. This is an upgrade from the previous high single-digit billion forecast. Nvidia anticipates approximately $32.5 billion in total revenue for the third quarter ending in October.
Kress highlighted the global trend of countries pursuing AI technologies tailored to their languages and cultures, describing AI as a “national imperative.” For instance, Japan’s National Institute of Advanced Industrial Science and Technology is constructing an AI supercomputer equipped with thousands of Nvidia H200 graphics processors.
Governments view AI as a strategic asset for national security, needing customized models to fit their unique political, economic, and cultural contexts. This demand for bespoke AI solutions is driving substantial growth for Nvidia’s GPUs. Despite challenges such as U.S. export restrictions on advanced chips to China, which have impacted sales in that region, Nvidia is seeing robust investment from both national governments and major cloud providers like Microsoft.
IBM’s recent collaboration with Saudi Arabia’s Data and Artificial Intelligence Authority to develop an Arabic language model underscores the growing global push to leverage regional AI capabilities, further fueling Nvidia’s market opportunities.
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