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With tech giants’ excitement around AI not slowing much this earning season, the company that’s cornered the market on the hardware needed for those dreams continues to rake it in.
Nvidia tripled its revenue YoY in the third quarter, to $18.1 billion, as companies like Microsoft, Adobe, and Amazon rely on its chips to build out their AI infrastructure. The chipmaker’s profit also ballooned, to $9.2 billion from $680 million in the same period last year. But the company warned that US export restrictions in countries like China, Vietnam, and the Middle East will impact sales in the current quarter.
In an earnings call, CEO Jensen Huang sought to position Nvidia as the center of a new enterprise computing phase in which companies are building “copilot” help tools with generative AI to streamline their operations.
“The generative AI era is in full steam and has created the need for a new type of data center: an AI factory,” Huang said.
While Nvidia currently dominates the market for AI chips with its graphics processors, plenty of competitors are gearing up to challenge it. AMD has committed to roll out its own MI300 chips by year’s end, and both Amazon and Microsoft have announced their own custom chips.
There’s also the matter of China, the Middle East, and other countries impacted by US trade restrictions. CFO Colette Kress said sales to customers in these countries have made up “20% to 25% of [Nvidia’s] data center revenue over the past few quarters.” The company is currently seeking licenses from the US government to sell a different version of its chip in those places, but in the meantime, the rules will hurt business there.
“We expect that our sales to these destinations will decline significantly in the fourth quarter, though we believe they’ll be more than offset by strong growth in other regions,” Kress said.
Nvidia will seek to continue its dominance over any prospective competitors and make up for losses in China with the debut of its H200 AI graphics processor early next year.