Chipmaker Nvidia flouts AI scepticism with record revenue

Chipmaker Nvidia reported its fourth quarter revenue jumped by 73% compared to the same period a year ago to $68.1bn (£50.2bn) - a record haul for the company.

The revenue figures beat analyst expectations and come amid a wave of investor scepticism towards the massive amounts of capital being spent on artificial intelligence (AI) technology.

"Computing demand is growing exponentially," boss Jensen Huang said. "Our customers are racing to invest in AI compute — the factories powering the AI industrial revolution and their future growth."

While providing chips for companies across the AI sector, in recent weeks Nvidia has also laid out plans to generate demand with new technologies of its own.

The company reported total annual revenue of $215.9bn for the past fiscal year, and has projected a rosy outlook for the months ahead.

Shares rose in afterhours trading following the release of Nvidia's quarterly earnings report.

Nvidia is the world's most valuable publicly-traded company, with a market cap of around $4.8tn.

It has become a central player in the buildout of AI infrastructure, providing sophisticated chips to leading AI model developers including OpenAI and Meta.

Gene Munster, manager partner at Deepwater Asset Management, said that buildout was likely to continue for a long time.

"AI is accelerating faster than people not using these tools can grasp," Munster wrote on the social media platform X on Wednesday.

Critics have raised the spectre of "circular financing" deals in which investments by Nvidia in other companies may be clouding perceptions about how robust AI demand really is.

Meanwhile, the company has been caught in a geopolitical tug-of-war between the US and China.

The outlook released by Nvidia on Wednesday did not include expectations about chip revenue in China.

Last month, the Trump administration began allowing Nvidia to sell its H200 chips - Nvidia's second-most advanced type - to Chinese customers under certain conditions.

But this week, a US Commerce Department official told lawmakers that none of those chips have yet been sold to Chinese customers.

Nvidia is also expanding its own product line in a bid to have more involvement in the physical products in which AI is embedded.

Last month at the CES technology trade show in Las Vegas, Huang unveiled a new tech platform for self-driving cars.

Huang said the open-source AI model, which the company is calling "Alpamayo," will bring reasoning to autonomous vehicles.

Nvidia also said is was planning to launch a robotaxi service by next year in partnership with an unnamed partner.

Nvidia chips have lead in the training of AI models, but it has faced of onslaught of competition in inference, the process whereby a trained model is applied to real-world data to generate answers through reasoning.

During the fourth quarter, Nvidia acquired rival Groq in a $20bn deal that's expand its expertise in inference.