AI chip specialist Nvidia exceeds expectations |

Status: 23.05.2024 10:37 a.m.

Nvidia’s business continues to grow explosively. The ongoing hype about artificial intelligence brought the chip manufacturer record sales in the first quarter of the year and shows that demand is unbroken.

Business is going better than expected at chip manufacturer Nvidia. The semiconductor specialist for applications in the field of artificial intelligence (AI) announced yesterday that it had generated sales of 26.04 billion dollars in the first quarter of this year, which ended on April 28. That was an increase of 262 percent compared to the same period last year.

Net profit also reached a record with an increase of around 600 percent to almost 14.9 billion dollars. The group thus significantly exceeded analysts’ expectations. The group also announced that it was planning a stock split at a ratio of 1:10.

Market value of more than two trillion dollars

“Demand for Nvidia’s GPU chips remains strong,” said Logan Purk, an analyst at Edward Jones. The group remains optimistic for the current quarter in view of the ongoing AI boom: In the current quarter, the group expects sales of around $28 billion. The outlook is therefore well above expectations.

Nvidia has once again delivered, even in the face of enormous expectations, said Ryan Detrick, chief market strategist at Carson Group. “Key data center revenues have been strong, and the outlook is also impressive.”

Investors reacted accordingly enthusiastically yesterday evening: the shares rose around 2.5 percent to $978 in after-hours trading. This year they have already risen by more than 90 percent; at the beginning of 2023 the papers were still available for around $140. The company’s market value is now around $2.2 trillion.

“The next industrial revolution”

A few weeks ago, the world’s largest contract manufacturer TSMC, which also produces for Nvidia, spoke of an “insatiable demand” for AI processors. For this reason, Nvidia, which dominates the global market for these chips, had exceeded analysts’ sales expectations in each of the previous six quarters. “The next industrial revolution has begun,” said Jensen Huang, founder and CEO of Nvidia, also alluding to the enormous importance of AI when presenting the quarterly results.

According to experts, Nvidia controls around 80 percent of the global market for sophisticated AI special processors. The top model is the “Blackwell B200”, which is estimated to cost more than $20,000 each. “AI will bring significant productivity improvements to almost every industry, helping companies be more cost and energy efficient while expanding revenue opportunities,” said Nvidia founder Huang.

AI is changing three million jobs in Germany

This is also confirmed by a recent study by the McKinsey Global Institute (MGI), which was published today in Düsseldorf. It shows that the annual productivity growth rate in Europe could be increased to three percent by 2030 through an accelerated introduction of artificial intelligence and effective upskilling of employees in the European economy.

For many employees, however, this also means that they have to prepare for serious professional changes. According to the study, up to three million jobs in Germany would be affected by a change by 2030. That corresponds to seven percent of total employment.

Office jobs are particularly at risk from AI

The McKinsey researchers’ scenario assumes an accelerated introduction of AI systems in the US and Europe. This could lead to the automation of almost a third of working hours by 2030. By 2035, this figure could even rise to 45 percent in the EU. According to calculations, almost twelve million job changes could be necessary in Europe and the United States by 2030.

The McKinsey researchers see the biggest changes coming to office jobs in the administrative areas of companies and public institutions. More than every second job change caused by AI (54 percent) in Germany falls into this area. Along with Italy, Germany is particularly affected because office support jobs make up a high proportion of total employment. According to the study, the demand for technical skills will instead increase by 25 percent in Europe alone. But social and emotional skills are also in greater demand (plus twelve percent).

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