Is AI bubble real? Nvidia’s Jensen Huang dismisses fears

Nvidia's CEO Jensen Huang, while talking at a US-Saudi investment forum, has dismissed fears of an AI bubble driven by the circular deals among tech giants.

The defiance of the AI bubble came when Nvidia delivered exceptional financial performance for its third quarter, thereby shattering the expectations and fueling tech stock surge.

The tech company reported record-breaking revenue of $57.01 billion for the quarter ended on October 26, demonstrating a 22 percent surge from the previous quarter.

Upon being asked whether “we are in an AI bubble or not,” the Nvidia CEO said, “There’s been a lot of talk about an AI bubble. “From our vantage point we see something very different.”

In response to the question, Huang laid out three-pronged arguments, explaining that the world is not in the bubble.

Firstly, he argued that for areas like search systems, data processing, and ad recommendations, the integration of cutting-edge GPUs have become the need of the hour.

That’s why the need for traditional computing infrastructure based on CPUs has decreased in recent years. The world is transitioning to new systems running on Nvidia’s cutting-edge chips.

Secondly, AI is not the part of existing applications, in fact, it is enabling the categories of new ones. From generative models to innovative engineering solutions, AI is becoming the part and parcel of new innovations.

Huang also shed light on the emergence of “agentic AI” powered by the ability to plan and reason with minimal user input. Resultantly, these applications will require unprecedented computing power, thereby growing the demand surge of Nvidia’s chips.

“As you consider infrastructure investments, consider these three fundamental dynamics. Each will contribute to infrastructure growth in the coming years,” Huang said.