NvidiaAstronomical growth of the most valuable public company in the world. it was driven by its graphics processing units (GPUs). Now, as AI enters its agentic phase, the CEO Jensen Huang is betting on future growth in central processing units (CPUs), a longtime focus for the company.
“The world has 1 billion human users. My guess is that the world will have billions of agents. We will need a lot more CPUs,” Huang told analysts at Nvidia’s latest quarterly earnings call yesterday (May 20).
GPUs excel at the parallel processing required for AI workloads, while CPUs excel at fast signal processing—a key requirement for agent systems. Nvidia has already generated $20 billion in CPU revenue this year, according to the CFO Colette Kresswho told analysts that these results “are positioning us to become the world’s leading supplier of CPUs”.
A key part of that push is Vera, Nvidia’s newest CPU unveiled in March. Huang described it as a “big new growth engine,” adding that the chips open up a “market we’ve never addressed before.” He estimates the CPU market opportunity to be worth $200 billion.
For now, Nvidia’s bottom line continues to be GPU driven. For the February-April quarter, the company reported $81.6 billion in revenue, up 85 percent year-over-year and a 211 percent increase in net income to $58.3 billion, beating Wall Street expectations. Data center revenue, which includes AI chips, reached $75 billion, up 92 percent from a year ago.
Huang has made a career of predicting changes in the industry. When he founded Nvidia in 1993, it was a company focused on gaming. It later shifted its focus to AI as GPUs proved a good fit for the technology, positioning Nvidia at the center of the current boom. Recently, the company has expanded into emerging fields such as “Physical AI”including autonomous vehicles and robotics.
The CPU market, however, presents a different challenge. Rivals have already gained ground as demand for these chips grows along with AI agent workloads. Intel‘s shares are up 193 percent since January, while AMD it has increased by 97 percent in the same period.
Both companies are moving towards change. CEO of Intel Lip-Bu Tan called CPUs “the indispensable foundation of the AI era,” adding that the trend “is not just what we want, but what we hear from customers.” The company reported $13.6 billion in quarterly revenue last month, up 7 percent year over year. AMD is seeing similar momentum, with revenue up 38 percent to $10.3 billion; CEO, Lisa Su told analysts it expects CPU revenue to grow 70 percent this quarter.
Still, analysts see opportunity for Nvidia. Its Vera chips “are adding a dimension to growth with the CPU market,” analyst Raymond James said. Simon Leopold. “While we are not sure that the ratio of CPUs to accelerators will go to 1:1, we do recognize that CPU growth is faster and the ratio is narrowing, and that is favorable for Nvidia.”
