Nvidia Boss Predicts $1 Trillion Chip Orders as AI Revolution Enters New Phase

Nvidia's CEO Jensen Huang outlined his company's strategy to maintain dominance in the artificial intelligence market during a presentation in California. He forecasted that chip orders will reach $1 trillion by year's end as AI technology moves into a new phase called "inference."

During a lengthy presentation at a crowded San Jose arena on Monday, Nvidia’s chief executive Jensen Huang shared his strategy for maintaining the company’s leadership position in artificial intelligence technology, projecting that chip orders will reach $1 trillion within twelve months.

Wearing his characteristic black leather jacket, the 63-year-old executive spent over two hours walking around the stage, describing how Nvidia’s computer processors have become essential components for AI systems and showcasing new products designed to extend the company’s market dominance.

Huang revisited familiar themes he has emphasized since becoming one of Silicon Valley’s most prominent figures in recent years, particularly his belief that artificial intelligence development is still in its early stages.

“We reinvented computing, just like the PC (personal computer) revolution and the internet revolution,” Huang proclaimed. “We are now at the beginning of a new platform change.”

To emphasize his message, Huang forecasted that Nvidia will face a $1 trillion backlog of chip orders by December, which represents double his projection from the previous year.

The Santa Clara, California-based company has used its commanding position in AI chip manufacturing to boost yearly revenue from $27 billion in 2022 to $216 billion in the most recent year — explosive growth that has propelled the company to a $4.5 trillion market valuation.

However, Nvidia’s previously soaring stock price has declined since the company momentarily became the first to exceed $5 trillion in market value last October, as investors question whether AI enthusiasm has become excessive.

“This is just a white-knuckle period for the technology industry,” said Wedbush Securities analyst Dan Ives.

Despite Nvidia publishing quarterly earnings in late February that significantly beat analyst predictions and company leadership offering optimistic forecasts, the stock price remains 6% lower than before those results were announced.

Although analysts project Nvidia’s revenue will exceed $330 billion in the coming year, the company confronts its first substantial competition in the AI processor market as technology giants including Google and Facebook’s parent company Meta Platforms work to create their own chips.

U.S. security and trade restrictions are also limiting Nvidia’s potential expansion by blocking the company’s ability to market advanced processors in China.

Huang sees Nvidia preserving its central AI role by continuing to supply the intense demand for processors that run chatbots such as OpenAI’s ChatGPT and Google’s Gemini, while also entering the developing market for inference chips.

After an AI system completes its training phase, inference processors allow the technology to apply its knowledge and generate responses — whether composing text or producing images — more effectively than the chips used during the initial model development.

“The inference inflection has arrived,” Huang said.

To assist with its move into the inference sector, Nvidia completed a multi-billion dollar licensing agreement with industry specialist Groq that involved recruiting that startup’s leading engineers.

“Nvidia isn’t going to cede any market share to Google or Meta,” said Ives, who anticipates Nvidia’s market value will surpass $6 trillion within the next year.