The tech industry’s surging capital expenditures for AI infrastructure are justified, appropriate and sustainable, Nvidia CEO Jensen Huang said Friday on CNBC’s “Halftime Report.”
“The reason for that is because all of these companies’ cash flows are going to start rising,” Huang said.
Nvidia shares were up 7% during trading Friday.
Huang’s comments come after key Nvidia customers Meta, Amazon, Google and Microsoft reported their latest earnings over the past two weeks. These companies told their investors that they plan to dramatically increase spending on AI infrastructure. In total, these hyperscalers could spend $660 billion on capital expenditures this year, with much of that spending going toward buying Nvidia’s chips.
Wall Street had a mixed response to the surging spending, sending Meta’s and Alphabet’s stocks up, but punishing Amazon and Microsoft.
Huang said that the “largest infrastructure buildout in human history” is being driven by “sky high” demand for computing power, which AI companies and hyperscalers can use to make more money. He cited specific examples of what Nvidia customers are doing with AI.
Meta is using AI to move from a recommendation system that ran on CPUs to a system that uses generative AI and agents, Huang said. He said Amazon Web Services’ usage of Nvidia chips and AI will affect how the retail giant recommends products, and that Microsoft will use Nvidia-powered AI to improve its enterprise software.
He also praised OpenAI and Anthropic, the two leading artificial intelligence labs, which both use Nvidia chips through cloud providers. Nvidia invested $10 billion in Anthropic last year, and Huang said earlier this week that the chipmaker will invest heavily in OpenAI’s next fundraising round.
“Anthropic is making great money. Open AI is making great money,” Huang said. “If they could have twice as much compute, the revenues would go up four times as much.”
He said that all the graphics processing units that Nvidia has sold in the past — even six-year old chips such as the A100 — are currently being rented, reflecting sustained demand for AI computing power.
“To the extent that people continue to pay for the AI and the AI companies are able to generate a profit from that, they’re going to keep on doubling, doubling, doubling, doubling,” Huang said.