Nvidia's meteoric rise to the world's most valuable public company. it was driven by its graphics processing units (GPUs). Now, as AI enters its agent phase, CEO Jensen Huang is betting future growth on central processing units (CPUs), the company's second focus.
“The world has 1 billion human users. My sense is that the world will have billions of agents. We will need a lot more CPUs,” Huang told analysts on Nvidia's latest quarterly call yesterday (May 20).
GPUs are good at the parallel processing required for AI workloads, while CPUs excel at processing tokens quickly—a key requirement for agent systems. Nvidia has already generated $20 billion in CPU revenue this year, according to CFO Colette Kress, who told analysts that these results “set us up to be the world's leading CPU supplier.”
A key piece of that push is Vera, Nvidia's new CPU unveiled in March. Huang described it as “a big new driver of growth,” adding that the chips are opening up “a market we haven't talked about before.” He estimates that the CPU market opportunity could be worth $200 billion.
Meanwhile, Nvidia's bottom line continues to be driven by GPUs. In the February to April quarter, the company reported $81.6 billion in revenue, up 85 percent year-on-year, and a 211% jump in revenue to $58.3 billion, exceeding Wall Street's expectations. Data center revenue, which includes AI chips, reached $75 billion, up 92 percent from last year.
Huang made his career in anticipation of industry shifts. When he founded Nvidia in 1993, it was a company focused on sports. He later turned his attention to AI as GPUs proved to be a good fit for the technology, putting Nvidia at the center of the current boom. Recently, the company has expanded into emerging areas such as “physical AI”, including autonomous vehicles and robotics.
The CPU market, however, presents a different challenge. Competitors are already gaining ground as demand for these ships increases and agent AI workloads increase. Intel stock is up 193 percent since January, while AMD is up 97 percent over the same period.
Both companies depend on change. Intel CEO Lip-Bu Tan called CPUs “a critical foundation for the AI era,” adding that the trend “is not just our desire, it's what we hear from customers.” The company reported $13.6 billion in quarterly revenue last month, up 7 percent year over year. AMD is seeing similar momentum, with revenue up 38 percent to $10.3 billion; CEO Lisa Su told analysts that she expects CPU revenue to grow 70 percent this quarter.
Still, analysts see an opportunity for Nvidia. Its Vera chips “add a dimension to the growth of the CPU market,” said Raymond James analyst Simon Leopold. “While we are not sure that the ratio of CPUs to accelerators will go to 1:1, we accept that CPU growth is accelerating and the ratio is decreasing, and this is good for Nvidia.”
