Future Growth Will Come From Sovereign AI

Daniel Howley |

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Shares of Nvidia (NVDA) rocketed higher after the company reported Q4 earnings, thanks to sky-high data center graphics chip sales. But CEO Jensen Huang isn’t just banking on selling AI chips to companies. He’s also looking at selling to entire countries as part of a concept known as sovereign AI. “The language, the knowledge, the history, the culture of each region are different,” Huang said during Nvidia’s earnings call. “And they own their own data. They would like to use their data, train it to create their own digital intelligence, and provision it to harness that raw material themselves.” Sovereign AI boils down to a single country or region setting up its own AI capabilities, allowing its AI to meet its own needs. “Countries around the world are investing in AI infrastructure to support the building of large language models in their own language on domestic data and in support of their local research and enterprise ecosystems,” Nvidia CFO Colette Kress added. Of course, sovereign AI isn’t the only thing driving Nvidia’s sales. In fact, the company said that more than half of its Data Center sales, which accounted for $18.4 billion of the firm’s $22.1 billion in overall revenue, came from large cloud providers. A number of those large cloud providers, however, are working on their own specialized AI chips that will prove more efficient in terms of performance and power compared to Nvidia’s chips. Amazon, Google, and Microsoft already have or are developing their own chips as a means of weaning their dependence on Nvidia. It’s not as though Nvidia is hurting, though. The chip giant raked in nearly as much revenue in Q4 as it did all last year: $27 billion.