The boom in artificial intelligence ensures that the activities of the American chip company Nvidia are running at full speed. In the third quarter, turnover of more than 18 billion dollars (16.4 billion euros) was three times higher than a year earlier. Analysts had expected an average of $2 billion less turnover.
Profits shot up from $680 million a year ago to $9.2 billion, Nvidia announced after the US stock market closed on Tuesday. Originally developed for graphics cards, Nvidia technologies have long proven themselves for computing when training applications with artificial intelligence.
For the fourth quarter, which started at the end of October, the group expects sales of around $20 billion – also more than $2 billion above market expectations. Nvidia CEO Jensen Huang emphasized in a conference call with analysts that he sees the change brought about by artificial intelligence as just beginning. Most importantly, so-called generative AI will be introduced across the board, such as chatbots modeled after ChatGPT, he predicted.
“Significant” declines in Chinese operations
At the same time, Nvidia admitted that sales in China would decline “significantly” under the pressure of extensive supply restrictions. Chinese companies have been among the top buyers of Nvidia’s AI chips, with operations there recently bringing in 20 to 25 percent of data center sales.
A few weeks ago, the US government expanded restrictions on exports to China to include Nvidia technology previously sold there. Nvidia emphasized that business in other countries will more than offset the decline in China. Nvidia is working on configurations and solutions that could also be sold to China under current rules, says CFO Colette Kress. But that will take a few more months and will no longer be noticeable in the current quarter.
In initial reaction to the figures, Nvidia shares lost about four percent, but ended after-hours trading with a more moderate loss of 1.74 percent.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
