Nvidia predicts AI-generated videos will grow demand for its microchips

Nvidia anticipates that AI-generated videos will significantly boost demand for its microchips, says its CEO.

Stylized Nvidia logo. Image credit: EdTech Stanford via Flickr, CC BY-NC-ND 2.0 license

The generative artificial intelligence surge has proven to be an ongoing boon for the chip designer. After experiencing a demand spike driven by Big Tech’s rollout of chatbots, Nvidia now foresees that new AI models capable of creating video and engaging in human-like voice interactions will further increase orders for its graphics processors.

Nvidia CEO Jensen Huang commented that video, grounded in reality and physics, represents the next major frontier. Huang emphasized that the vast amount of information tied to 3D video and related learning systems will necessitate substantial computing power.

This need for advanced computational capabilities has driven demand for Nvidia’s Grace Hopper chips, such as the H200, first utilized in OpenAI’s GPT-4o, a multimodal model capable of realistic voice conversations and interactions across text and images.

Other Nvidia customers, including Google DeepMind and Meta Platforms, have also launched AI platforms focused on generating images and videos. On Wednesday, Nvidia projected quarterly revenue well above expectations, attributing this to a more than five-fold increase in sales at its data center unit during the first quarter.

Experts also note that the broad-based demand and the growing need for large language models to be multimodal—understanding video, text, speech, and both 2D and 3D images—are driving Nvidia’s success.

AI models for video applications in the automotive industry are also becoming significant drivers of demand for Nvidia’s chips. Tesla, for instance, has expanded its cluster of processors used for AI training to approximately 35,000 H100s as part of its pursuit of autonomous driving capabilities. Nvidia’s finance chief, Colette Kress, stated in a post-earnings call that the automotive sector is expected to become the largest enterprise vertical in Nvidia’s data center business this year.

Written by Alius Noreika