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Nvidia founder and CEO Jensen Huang is, perhaps, one of the greatest corporate hype men of all time when it comes to his company. He may even surpass Salesforce\u2019s Marc Benioff when it comes to relentless optimism in his company\u2019s future and revenues.<\/p>\n
Even so, he delivers on the hype, quarter after quarter.<\/p>\n
Instead of cautioning you to view the proclamation that he\u2019s found a \u201cbrand new $200 billion TAM for Nvidia\u201d with skepticism, I\u2019d argue he\u2019s earned a bit of trust.<\/p>\n
Huang positioned this massive new market at the feet of Nvidia\u2019s new CPU product, Vera, which was introduced in March<\/a>. Speaking on Wednesday\u2019s earnings call \u2014 after Nvidia posted another record-breaking quarter with $81.6 billion in revenue and forecast $91 billion for the next \u2014 Huang pitched Vera as a potentially transformative product. And one that already has promising sales figures. <\/p>\n But no matter how well Nvidia delivers, Wall Street harbors anxiety over what will knock Nvidia from its perch. <\/p>\n Lately, such fears have centered on the CPU. Nvidia is the king of the GPU, whereas historically the CPU markets were owned by companies like Intel and AMD. (Nvidia has made CPUs previously, of course, but that\u2019s not its core business.)<\/p>\n For example, last month Amazon Web Services crowed about a giant contract it signed with Meta for millions of Amazon\u2019s homegrown AI CPUs<\/a>. Amazon CEO Andy Jassy has been clear that he thinks AWS can do AI chips, both GPUs and CPUs, at least as well, and possibly better than Nvidia<\/a>.<\/p>\n But now, with the Vera CPU, which is sold alone and bundled with its Rubin GPU, Huang believes he\u2019s unlocked \u201ca major new growth driver\u201d for his company because Vera is, he believes, \u201cthe world\u2019s first CPU, purpose-built for agentic AI,\u201d Huang said on the call.<\/p>\n \u201cVera opens a brand new $200 billion TAM for Nvidia, a market we have never addressed before, and every major hyperscaler and system maker is partnering with us to deploy it. The world is rebuilding computing for agentic AI and robotic physical AI. Nvidia sits at the center of these transitions,\u201d hype man Huang said.<\/p>\n He explained that while the \u201cthinking\u201d part of an AI model uses GPUs, agents mostly run on CPUs. They use CPUs to do their assigned tasks and will, he predicts, run their own form of CPU-driven PCs. <\/p>\n Vera is for agents because it\u2019s specifically designed to process tokens as fast as possible. This is opposed to classic cloud architecture CPUs designed with \u201ccores,\u201d or the ability to run multiple instances of apps as fast as possible.<\/p>\n That sounds logical, but with the major cloud providers as well as startups pursuing AI chip development, what makes him think that Nvidia will be the go-to source for agentic CPUs?<\/p>\n Because, Huang says, Nvidia has already sold $20 billion worth of standalone Vera CPUs this year and we\u2019re only at the beginning. <\/p>\n \u201cThe world has a billion users, human users. My sense is that the world is going to have billions of agents, not today. I mean, we\u2019re going to grow into it, but we\u2019ll have billions of agents, and those billions of agents will all use tools. And those tools are going to be like PCs, just like us humans using using PCs today,\u201d he said.<\/p>\n \u201cWe\u2019re going to need a lot more CPUs,\u201d he explained.<\/p>\n<\/div>\n When you purchase through links in our articles, we may earn a small commission<\/a>. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n