- Nvidia is dominating earnings season, and has yet to report results.
- Other big tech giants have mentioned on earnings calls that they are ramping up investment in AI infrastructure.
- Nvidia It offers the popular H100 GPU chip used by many companies, and is specifically name-checked in some cases.
Nvidia is dominating the first quarter earnings season, and it hasn't even announced its results yet.
The company has received many gestures, directly and indirectly, from huge technology companies, which it considers to be among its largest clients.
Words like “AI Infrastructure,” “genetic AI,” and “infrastructure capex” have consistently cropped up in Microsoft, Alphabet, Amazon, and Meta Platforms earnings calls, all pointing to more money being funneled to Nvidia for its incredibly popular H100 product. GPU chip.
Nvidia's H100 GPU, which costs upwards of $40,000, enables the AI technologies that make ChatGPT, Anthropic, and other generative AI platforms possible.
The company is preparing to release its next-generation AI chip, called Blackwell, later this year.
Elon Musk shouts out Nvidia's AI chips
Perhaps the biggest vote of confidence for Nvidia this earnings season came from Tesla CEO Elon Musk, who said on his company's earnings call that the electric car maker will double its H100 GPU chips by the end of the year.
“We've installed and commissioned 35,000 H100 computers or GPUs, which means it's actually working,” Musk said last month. “Roughly 35,000 H100s are active, and we expect that to be probably 85,000 or so by the end of this year.”
Musk said the H100s help Tesla improve its full self-driving program.
Mega-cap tech spending on AI is on the rise
Meta Platforms said it is increasing its expected 2024 capital expenditures to a range of $35 billion to $40 billion from the previous range of $30 billion to $37 billion. The increase, according to Meta, is primarily due to building its “investments in infrastructure to support our AI roadmap.”
In January, Meta said it would buy 350,000 H100 GPUs from Nvidia in 2024, but a recent update from the company's head of AI, Yann LeCun, suggests the company has purchased more H100 chips in recent months.
Speaking at the Shaping the Future of Business with AI Summit last month, LeCun and host John Werner said Meta had purchased an additional 500,000 GPUs from Nvidia, bringing its total to 1 million units with a retail value of about $30 billion.
Microsoft has similar ambitions and said it hopes to amass 1.8 million GPUs by the end of 2024, according to an internal document.
Alphabet said its first-quarter equity capital was $12 billion, or about double the amount from a year earlier, driven “largely by investment in our technology infrastructure with the largest component being servers followed by data centers.”
Microsoft said it expects $50 billion in capital expenditures in its next fiscal year, and its fiscal spending in the third quarter rose nearly 80% to $14 billion.
While Amazon did not provide details on its capital spending plans, it said it expects to spend more money.
“We expect our overall capital expenditures to increase significantly year-over-year in 2024, primarily driven by higher capital expenditures for infrastructure to support growth at AWS, including generative AI,” Amazon CFO Brian Olsavsky said.
In total, the combined capital expenditures of Microsoft, Alphabet, Meta and Amazon are expected to reach $205 billion this year, representing a 40% increase from 2023 levels, according to UBS. A large portion of this money will likely be transferred to Nvidia to purchase the H100 and Blackwell AI chips.
Nvidia has competition, but it still dominates
Recent earnings results from Nvidia competitor AMD suggest that most of that business is going to Nvidia and not its competitors.
AMD said its MI300 AI chip will generate about $4 billion in revenue in 2024, an amount that pales in comparison to Nvidia's expected revenue of more than $100 billion this year.
Meanwhile, Intel recently unveiled its Gaudi 3 AI chip that will compete with Nvidia, but said it expects the chip to generate just $500 million in sales this year.
Investors will have to wait until after the market closes on May 22 to hear Nvidia's actual earnings results.
