Nvidia posts $68B revenue as AI compute demand surges

Nvidia reported record profits and revenue for its most recent quarter on Wednesday, driven by rapidly increasing demand for artificial intelligence compute. The company posted $68 billion in revenue for the quarter, representing a 73% growth from the prior year. According to CEO Jensen Huang, the demand for tokens—the units of text processed by AI models—in the world has gone completely exponential, to the point where even six-year-old GPUs (graphics processing units) in the cloud are fully consumed and pricing is rising.

The company’s financial performance was heavily anchored by its data center business, which generated the vast majority of its quarterly and full-year revenue. For the full year, Nvidia reported $215 billion in revenue. The quarterly breakdown of the data center business includes:

• Data center revenue: $62 billion
• Compute revenue: $51 billion, which consists largely of GPUs
• Networking products revenue: $11 billion, which includes NVLink, Nvidia’s networking product

Huang addressed the sustainability of capital expenditure (capex) commitments from technology companies, asserting that compute investments are directly tied to revenue generation. “In this new world of AI, compute is revenue. Without compute, there’s no way to generate tokens. Without tokens, there’s no way to grow revenues,” said Jensen Huang, CEO of Nvidia. He added that the company has reached an inflection point of generating profitable tokens that are productive for customers and profitable for cloud service providers.

Despite these record figures, Nvidia has not generated revenue from chip exports to China, navigating complex export restrictions regulated by the U.S. government. Colette Kress, Nvidia’s chief financial officer, stated that while small amounts of H200 products—a specific Nvidia product line—for China-based customers were approved by the U.S. government, they have yet to generate any revenue, and the company does not know whether any imports will be allowed into China. Kress also noted that Chinese competitors, including Moore Threads and others bolstered by recent IPOs (Initial Public Offerings), are making progress and have the potential to disrupt the structure of the global AI industry over the long term.

The company is also working toward a partnership agreement with OpenAI, which Huang stated he believes the companies are close to finalizing, amid reports of a pending investment reported at $30 billion. However, statements Nvidia filed with the SEC on Wednesday emphasized that there is no assurance an investment will take place. Huang also noted partnerships with Anthropic, Meta, and xAI.

Why it matters

Nvidia’s record-breaking financial performance, driven by massive data center demand, highlights the ongoing AI compute boom. However, the company must continue to navigate complex geopolitical export restrictions and manage potential strategic partnerships.