Nvidia boss Jensen Huang says AI is overworked, may need to work 100 times harder to match rapid development

Nvidia has once again delivered outstanding financial results, cementing its position as the leader in artificial intelligence computing. The company reported a 78% increase in revenue year-on-year, hitting $39.33 billion in the latest quarter. Data centre revenue surged 93% to $35.6 billion, now making up over 90% of total earnings. Nvidia closed the fiscal year with record revenue of $130.5 billion, driven by massive demand for its AI-powered chips.

Net income for the quarter reached $22 billion, a testament to Nvidia’s dominant role in the AI sector. However, despite its financial success, the company faces challenges ranging from geopolitical tensions to emerging competition.

Next-Gen AI Needs More Power

Nvidia CEO Jensen Huang believes AI is advancing at an unprecedented rate, and future models will require far greater computational power. Speaking to CNBC’s Jon Fortt, he explained that next-generation AI models, such as DeepSeek R1, OpenAI’s GPT-4, and xAI’s Grok 3, require significantly more processing power.


"The amount of computation necessary to do that reasoning process is 100 times more than what we used to do," Huang stated. He emphasised that reasoning-based AI is the future, and it will drive even greater demand for Nvidia’s high-performance chips.

DeepSeek’s recent advancements raised concerns over the possibility of achieving similar AI efficiency at a lower cost. However, Huang dismissed the notion that it would reduce demand for Nvidia’s chips. "DeepSeek was fantastic," he said. "It was fantastic because it open-sourced a reasoning model that’s absolutely world-class."

China's Restrictions and Rising Competition

Nvidia’s business in China has been significantly affected by US export controls, which were tightened under the Biden administration. The company’s revenue from China has dropped by about half due to these restrictions. Huang acknowledged the impact but noted that developers will likely find alternative solutions.

"Ultimately, software finds a way," he said. "You ultimately make that software work on whatever system that you're targeting, and you create great software."

The restrictions mean that Nvidia’s most advanced AI chips cannot be sold in China. Instead, the company offers lower-powered alternatives, but these are significantly less capable. Nvidia’s GB200 processor, available in the US, generates AI content 60 times faster than the downgraded versions supplied to China.

Meanwhile, competition is growing. Chinese tech giant Huawei is ramping up efforts to develop its own AI chips, posing a potential threat to Nvidia’s dominance in the region. The sudden rise of DeepSeek’s AI models also signals that new players are entering the space with cost-effective alternatives.

Market Jitters and Stock Recovery

In January, Nvidia’s stock took a 17% hit—its worst decline since 2020—following concerns about DeepSeek’s AI model. Investors feared that cheaper alternatives could undermine Nvidia’s grip on the high-end AI computing market. However, the company’s latest earnings report helped restore confidence.

"Despite market jitters over DeepSeek’s efficient model and early Blackwell deployment challenges, Nvidia’s results reaffirm that it continues to lead the AI landscape, sidelining skeptics," said Emarketer technology analyst Jacob Bourne.

Following the earnings announcement, Nvidia shares rose by over 2% in after-hours trading, signalling renewed investor optimism.

The Blackwell Era

Nvidia is not slowing down. The company has ramped up large-scale production of its latest Blackwell processors, which are expected to play a critical role in AI’s next phase.

"AI is advancing at light speed as agentic AI and physical AI set the stage for the next wave of AI to revolutionise the largest industries," Huang stated in an earnings release.

Nvidia has projected revenue of $43 billion for the current quarter, exceeding analyst expectations. As it navigates competition, regulatory hurdles, and rapid technological changes, Nvidia remains at the forefront of AI computing. Whether it can maintain its dominance amid growing competition will be the key question moving forward.