National AI? Lao Huang has set his sights on a super potential client: the government.

Thanks to the strong growth in the sales of Graphics Processing Units (GPUs) for data centers, NVIDIA's quarterly performance exceeded expectations, and the guidance for this quarter is very optimistic, NVIDIA has ignited market sentiment, driving global chip stocks and AI concept stocks to soar.

Having achieved brilliance in the past, looking ahead, NVIDIA's customers are not only companies but also governments.

NVIDIA CEO Jensen Huang stated, "National AI" will become a future source of performance growth for NVIDIA.

Jensen Huang Calls for "National AI"

Jensen Huang expressed during NVIDIA's earnings conference call, "Languages, knowledge, history, and culture vary in each region, and every country or region wants to control its own data and utilize it to nurture and develop its AI systems. Japan, Canada, France, and some other regions have already begun establishing their own national AI systems."

NVIDIA pointed out that "National AI" is a strategic concept, referring to individual countries or regions establishing their own AI infrastructure to meet their specific needs. This means that a country or region is self-sufficient in technology, capable of independently developing and deploying AI applications without excessive reliance on external resources or technology. Moreover, countries can customize AI applications based on their language, culture, economy, and social needs. This approach allows AI systems to better serve local users, address regional issues, and enhance efficiency and effectiveness.

NVIDIA's CFO Colette Kress added that National AI has become a new demand driver globally, with countries worldwide investing in AI infrastructure to support the construction of large language models using their own languages and domestic data. By building national AI systems, countries can create an environment conducive to scientific research innovation and business growth.

For NVIDIA, as a leading GPU and AI chip manufacturer, NVIDIA can provide critical hardware for enterprises and countries worldwide to implement AI applications. By selling AI chips to countries, NVIDIA can expand its market share. If every country is committed to building its own AI infrastructure, NVIDIA's AI acceleration hardware products will cover every country globally.

Balancing Big Clients and Governments

Competition in NVIDIA's original large client market is intensifying.

Media reports indicate that major cloud service providers such as Amazon's AWS, Google Cloud, and Microsoft's Azure are striving to develop their own chips to reduce reliance on NVIDIA chips. These chips may be more efficient in terms of performance and power consumption compared to NVIDIA's chips.

To address this situation, NVIDIA continues to actively collaborate with major clients to solidify its current market leadership. According to media reports, NVIDIA has proactively reached out to these three cloud service providers, hoping to produce custom chips for them. Moreover, at present, NVIDIA's financial situation remains very strong. NVIDIA's fourth-quarter revenue was $22.1 billion, a staggering 265% increase year-on-year, even surpassing the full-year revenue of 2021. NVIDIA expects next quarter's revenue to be around $24 billion, far exceeding market expectations.

On the other hand, NVIDIA is actively strategizing and exploring new growth opportunities brought by "National AI" to maintain its competitive edge in the rapidly growing global AI and computing technology market. If successful in selling its products and technology to national governments in the future, NVIDIA may see new revenue growth points.