Nvidia Chips in High Demand as Nations Develop Their Own AI Models
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Nvidia chips in high demand as nations develop their own AI models

Countries are making AI models that are specific to their languages and needs, which is causing huge revenue growth for Nvidia.

A top executive at Nvidia said on Wednesday that countries that are building AI models in their own languages are using the company’s chips. This is adding to the already high demand for the chips as generative AI becomes more important to businesses and governments.

Nvidia’s prediction that sales of its chips that power AI technologies like OpenAI’s ChatGPT would rise in the third quarter did not live up to investors’ high hopes. But the business said it was getting new customers from all over the world, including countries that want their own AI models and the hardware to support them.

Chief Financial Officer Colette Kress told analysts on a call after Nvidia’s earnings report that having countries use their own AI models and apps will bring in about $10 billion for the company in the fiscal year ending in January 2025.

Before, it was thought that these kinds of sales would bring in only a few billion dollars in overall revenue. Nvidia thought that the third quarter, which ended in October, would bring in about $32.5 billion.

Kress said that AI knowledge and infrastructure are “national imperatives” because “countries around the world” want to have their own generative AI that can use their own language, culture, and data to make the AI work for them. Artificial intelligence is also being used by governments to make the country safer.

Shane Rau, an analyst at IDC, said that AI models are trained on data. For political entities, like countries, the data they use is private, and their models need to be changed to fit their specific political, economic, cultural, and scientific needs.

In 2023, Washington put more restrictions on sending advanced chips to China because it wanted to stop AI advances that would help China’s defense. This made it harder for Nvidia to sell chips in the area. As the government tries to get businesses to build AI systems in regional languages, these businesses have been busy.

IBM said in May that the Data and Artificial Intelligence Authority of Saudi Arabia would teach its “ALLaM” Arabic language model using the Watsonx AI tool. Bob O’Donnell, chief expert at TECHnalysis Research, said that countries that want to make their own AI models can help Nvidia’s GPUs grow. This is on top of the fact that big cloud providers like Microsoft have already put a lot of money into the company’s hardware.

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