Nvidia Corp. CEO Jensen Huang, whose products have become highly sought-after in the tech industry, acknowledged that the rush for limited supplies has led to customer frustration and increased tensions.
“The demand is extremely high, and everyone wants to be first and secure the most,” he shared with the audience at a Goldman Sachs technology conference in San Francisco. “We probably have more frustrated customers now, which is only natural. It’s a tense environment, but we’re doing our best to manage it.
Huang informed the gathering that his company’s most recent chip generation, dubbed Blackwell, is seeing high demand. Physical hardware manufacture is outsourced by the Santa Clara, California-based company, and Nvidia’s vendors are catching up, he added.
Nvidia’s chips are crucial for data centers that develop and run artificial intelligence models. The high demand for these services has driven up both sales and stock prices. Nvidia’s shares have more than doubled this year, adding to a 239% increase in 2023.
The stock surged 8.1% to $116.91 in New York on Wednesday, representing its largest single-day increase in six weeks.
However, Nvidia relies on a limited number of customers, such as data center operators Microsoft Corp. and Meta Platforms Inc., for a significant portion of its revenue.
Huang was questioned about whether the substantial investment in AI is yielding returns for customers, a topic of concern amid the tech industry’s AI boom.
He stated that companies have no option but to adopt “accelerated computing.” Nvidia’s technology not only accelerates conventional data processing tasks but also manages AI workloads that older technologies cannot handle, he explained.
Huang noted that Nvidia depends heavily on Taiwan Semiconductor Manufacturing Co. (TSMC) for the production of its most crucial chips, emphasizing that TSMC is significantly superior in its field. However, geopolitical tensions pose risks, as China views TSMC’s home island as a breakaway province and could potentially attempt to reclaim it, which might disrupt Nvidia’s access to this key supplier.
Huang added that Nvidia develops much of its technology internally, which could enable the company to shift orders to alternative suppliers if necessary. Nonetheless, he acknowledged that such a transition would likely lead to a decline in chip quality.
“TSMC’s agility and ability to respond to our needs is truly remarkable,” he said. “We depend on them due to their exceptional performance, but if necessary, we can always switch to other suppliers.”
