Nvidia CEO Jensen Huang says AI has reached a virtuous cycle

Nvidia AI has reached a “virtuous circle,” CEO Jensen Huang said Friday, hinting at continued growth for the industry.

Speaking at the APEC CEO Summit in South Korea, Huang said major advances in artificial intelligence models have led to greater investment in technology, which has further improved artificial intelligence models.

“We have now achieved what is called the virtual loop,” he said on stage at the event, wearing a suit instead of his usual black leather jacket.

“AIs are getting better. More people are using it. More people are using it, making more profits, creating more factories, which allows us to build better AIs, which allows us to create better AIs, which allows more people to use it. The virtual cycle of AI has been designed, and that’s…the reason you’re seeing capex going so fast around the world.”

His comments come at a time when Big Tech is spending billions of dollars to build AI-related infrastructure and serve its end users.

This year was expected to be a big year for AI spending, with Meta, Amazon, Alphabet and Microsoft announcing plans to spend more than $300 billion combined on AI technologies and data center deployments. This looks set to continue into 2026, as tech giants plan to increase spending again based on earnings reported this week.

Dan Ives, head of global technology research at Wedbush Securities, called Nvidia “the foundation of the AI ​​Revolution” in a statement to CNBC following Huang’s onstage comments.

He described the virtuous cycle of AI as follows: “The more demand there is, the more AI building blocks are built. And demand creates more demand and capex.”

Huang emphasized that profitability lies at the core of the current boom in AI capital investment.

“When something becomes profitable, you want to produce more of it, just like when you produce chips, wafers, and DRAM, if the production of those chips is profitable, you want to build more factories to produce more chips,” he added.

Huang said on stage that this is the beginning of a new era of computing, where “each layer of the computing stack has fundamentally changed” with artificial intelligence.

“We are at the beginning of the 10-year development of this new era,” he added.

“AI runs on GPUs [graphics processing unit]hand-coded software runs on CPUs [central processing unit]. “This entire software stack, every layer of computing, from energy needs to chips, infrastructure, all the software related to the systems, artificial intelligence models and applications, has fundamentally changed,” he said.

“Think about it: the computer industry has been largely the same for 60 years, and now every layer of the computing stack is changing with artificial intelligence and accelerated computing. All the computers we’ve created in the past, a trillion dollars worth of computers, maybe more, now need to be converted, shifted, to the new computing platform,” he added.

Nvidia, which became the first company to surpass $5 trillion in market capitalization earlier this week, announced a partnership with Korean semiconductor giant Samsung early Friday. Samsung plans to purchase and distribute a cluster of 50,000 Nvidia GPUs to expand chip production for mobile devices and robots.