Nvidia Defies DeepSeek Fears with Record AI Chip Sales
Nvidia reports strong AI chip sales despite market jitters over DeepSeek, with a record $39.33 billion in quarterly revenue and a bullish outlook for future growth.
Nvidia, the leading semiconductor manufacturer, has delivered a robust quarterly earnings report, dispelling concerns about a potential slowdown in AI chip demand due to the emergence of Chinese AI company DeepSeek. Despite recent market volatility, Nvidia's revenue for the fourth quarter reached a record-breaking $39.33 billion, marking a significant 78% increase from the previous year.
Nvidia's success is largely attributed to its dominance in the AI chip market, particularly with its Blackwell chips, which are designed for advanced AI applications. The company reported $11 billion in revenue from Blackwell sales during the quarter, driven primarily by large cloud service providers. This represents the fastest product ramp in Nvidia's history, underscoring the strong demand for its AI chips.
CEO Jensen Huang expressed confidence in Nvidia's position, emphasizing that future software development will rely heavily on machine learning, which requires sophisticated chips like those produced by Nvidia. Huang noted, "Demand for Blackwell is amazing as reasoning AI adds another scaling law — increasing compute for training makes models smarter and increasing compute for long thinking makes the answer smarter".
The emergence of DeepSeek, a Chinese AI company that developed a popular chatbot using less sophisticated and more affordable chips, had raised concerns about a potential decline in demand for Nvidia's high-end AI chips. However, Nvidia's latest earnings report suggests that major tech companies remain committed to investing in Nvidia's advanced AI chips, alleviating fears of a market downturn.
CFO Colette Kress reassured investors that newer AI models will require more computing power, further solidifying Nvidia's position in the market. The company's data center revenue, which accounts for over 91% of its total revenue, surged 93% annually to $35.6 billion, exceeding market expectations.
Nvidia has forecasted a first-quarter revenue of approximately $43 billion, indicating continued growth in AI chip demand. The company is ramping up production of its next-generation Blackwell AI chips, which are expected to play a crucial role in driving AI inference and applications in production environments.
Nvidia's strong quarterly performance and positive outlook have eased concerns about the impact of DeepSeek on its business, reaffirming its leadership in the AI chip market.
