During a recent interview on CNBC, Jensen Huang addressed concerns regarding Nvidia's financial backing of various AI companies, which some critics have likened to 'circular financing' reminiscent of the dot-com bubble. Huang clarified that the substantial funding needs of AI startups, which can require tens of billions to become profitable, are unprecedented.
Nvidia has leveraged its strong cash flow from the AI boom, reporting $96.2 billion in quarterly revenue, to invest in key players in the AI ecosystem, including OpenAI and Anthropic. The company is also involved in financing significant data center projects, such as a $105 billion compute campus in Ohio, where OpenAI will be a tenant.
Huang reassured investors that the risks are manageable, as Nvidia's computing infrastructure can be repurposed across various clients, thus mitigating exposure to any single investment.
The company's strong financial performance, with a 117% increase in data center revenue, supports Huang's confidence in the ongoing demand for AI technologies, and Nvidia projects a 70% revenue growth for fiscal 2028. Following the earnings report, Nvidia's shares rose about 4% in after-hours trading, reflecting a positive market response despite broader investor concerns about the AI sector