Nvidia is riding the AI revolution. What the chip maker isn’t telling us.
This is a tremendous number, even if not gorgeous by the winner of the winner Supreme Standards. Only one critical question remains unanswered.
The largest AI chip manufacturer of the word has, of course, has become the most valuable stock in the world in the last three years. Currently, it is expected to generate more than $ 200 billion annually with a profit margin to north of 70%.
However, the amazing amounts are pale compared to CEO Jensen Huang as AI expenditure in the next five years.
“We are at the beginning of an industrial revolution that will transform every industry,” he said in a conference meeting to the analysts. “We see 3 trillion to 4 trillion dollars in AI infrastructure expenditures until the end of the decade.”
A $ 4 trillion installment will be in line with the united economic production of Canada and Brazil to a greater and greater than all Gross Domestic Product of Great Britain.
However, what Huang cannot tell investors is how trillions in expenditures will turn into lower striped profits for the non -technology world. None of the Megacap technology companies could express this.
To be fair, that’s not his problem. Like AI Gold Rush “Pick-Ang Shovel” SupplierNvidia will earn a lot of money regardless of how this new “industrial revolution” is played.
Huang’s revolution does not have to be so wide. Only three of Nvidia’s largest customers account for 56% of their income. To make them happy and Re -winning access to ChinaIt will keep NVIDIA’s wheels strict on the rising profitable runway.
However, when we look at the real economy, things are less open. A recent study from the MIT Media Laboratory showed that most organizations that use AI technologies have gained zero returns from their efforts.
“Only 5% of integrated AI pilots raises millions, while the vast majority remains stuck without a measurable P & L effect.” He said.
Extracted eye irrigation amounts for AI expendituresand enormous Infrastructure amounts expected to createThe research said that AI will not be more attractive for the non -average company.
“The basic obstacle of scaling is not an arrangement or talent. He learns. “Most Genei system does not maintain feedback, the binding does not adapt or does not improve over time.”
S&P Global Market Intelligence’s spring work seemed to support this view. Approximately 42% of the companies have shown new AI projects more than twice the speed of 2023 last year. The study said, çar Resistance from customers and employees [and] Concern surrounding reputation damage. “
Investors outside the Megacap Techhorta do not see enormous gains from AI.
When we look at the advanced price floors of the various sectors of S&P 500, beyond those affected by major technology stocks, none of them are ready to perform better than their recent pasts. And only industries are priced richer than the comparison itself. These values are probably not the adoption of technology, but the construction of AI data centers.
EARLY PROJECTS labor market deductionThe final excess of collective layoffs and entry -level jobs has not yet emerged. A study of the Economic Innovation Group found the opposite: the most exposed to AI exchange is going better than those who are not in the labor market.
“The most prominent measure, AI’s impact on jobs invisible,” he said.
There is no question that AI has transformed the field of technology. . Energy and infrastructure This will improve performance in sectors.
However, the vision of a world in which chatbots dominate institutional activities, increases productivity and creates large profits is not yet focused on the vision of AI.
However, Nvidia is still worth $ 4.3 trillion.
