Jensen Huang Says AI Capital Expenditure Is Appropriate and Sustainable; Nvidia Stock Ends Losing Streak and Surges
Jensen Huang, CEO of Nvidia, addressed concerns about whether customers are overspending on data centers, stating that the current level of expenditure is appropriate and sustainable. Meanwhile, Nvidia shares surged on Friday as investors flocked to companies expected to benefit from the massive capital spending on artificial intelligence infrastructure by major tech firms this year.
In an interview on Friday, Huang said that the construction of AI infrastructure would last for seven to eight years, noting that demand for AI is "astonishingly high."
Huang said, "AI has become useful, and its capabilities are very powerful." "The adoption rate has become extremely high."
Some of the world's largest tech companies—including Amazon, Google under Alphabet, Meta Platforms, and Microsoft—have announced substantial capital expenditure plans in their financial reports, causing unease among investors. In recent days, the combined market capitalization of these four companies has dropped by nearly $1 trillion.
A significant portion of this spending will go to Nvidia. Nvidia manufactures data center processors used to develop and run AI models. Huang believes AI is already delivering returns to adopters, and if these customers have more data centers, their performance will improve even further.
Huang stated that he is not concerned about the tech industry adding excessive capacity. He said that, unlike the first wave of internet infrastructure construction, there is no idle infrastructure today. Companies like Anthropic PBC and OpenAI are generating considerable revenue.
On Friday, Nvidia's share price rose as much as 7.7%, marking its biggest intraday gain since April 9, with market value increasing by over $300 billion. Previously, amid a sharp decline in software and tech stocks, Nvidia had fallen for five consecutive trading days, losing about $500 billion in market value.
Editor: Chen Yujia
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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