The company is now worth more than the parent company of Google, Alphabet, and Amazon (see chart below). Nvidia’s revenue rose by as much as 265 percent in the fourth quarter, to $22.1 billion. In addition to record turnover, Nvidia also achieved a record profit of 12.3 billion dollars (11.4 billion euros) in the last months of 2023.
According to CEO Jensen Huang, Nvidia is taking full advantage of the high demand for faster computers and AI applications. “Demand is increasing worldwide in all kinds of companies, sectors and countries,” he says in an explanation of the figures. Significantly more money came in, especially in the data center branch.
Sharp image in games
His company now focuses on designing chips for AI, but in the early days focused on games. The graphics cards that Huang and his team designed found their way into a variety of games and consoles, such as the first Xbox. The video cards determine, among other things, how sharp the image is in games, and how fast you can game without the image becoming strange.
At some point, Huang discovered that these graphics chips also work well for mining cryptos and for training AI models. “These chips are actually indispensable for that,” says Harm Teunis, AI specialist at RTL News. “With the Nvidia chips, calculations can be made very quickly. You need that to create language models, basically what’s under the hood in applications such as ChatGPT.”
This is why Nvidia video cards are so special
What makes Nvidia video cards so special – and what makes them so successful – is the fact that they can handle many calculations at the same time. A normal processor can only do one thing very well.
Teunis compares it to a shopping trip in the supermarket. “If I have to complete a shopping list on my own, it takes me fifteen minutes to get all the products. But if eight of us go to the store and all get one product, we can be at the checkout in no time. “
The designer of graphics chips – the manufacturing work is done at TSMC in Taiwan or Samsung in South Korea – currently has little competition. Other major tech companies, such as Meta and Google, spend a lot of money on Nvidia: some video cards cost $30,000 each.
Sold out more and more often
Moreover, Nvidia can barely meet the demand and there is therefore a large waiting list. Not only tech giants suffer from this, but also gamers in the Netherlands. The video cards are increasingly sold out, because game stores cannot maintain enough stock due to the high demand.
Reason enough for tech giants to investigate whether they can also make such chips themselves. However, Teunis expects that the American company will not be exposed very quickly. “Designing such chips is really very complicated. And then you also have to have factories to produce them.”