Written by Archia Bajwa
Countries that build artificial intelligence models in their own languages are turning to Nvidia (NASDAQ:NVIDIA) chips, adding to already surging demand as generative AI takes center stage for businesses and governments, a senior executive said Wednesday.
Nvidia’s third-quarter forecast for a surge in sales of its AI-powered chips like OpenAI’s ChatGPT fell short of investors’ lofty expectations. But the company touted new customers from around the world, including governments now seeking its AI models and the hardware to support them.
Countries that adopt its AI applications and models will contribute about a few billion dollars to Nvidia’s revenue in the fiscal year ending in January 2025, Nvidia CFO Colette Kress said on a call with analysts after the company’s earnings report.
That’s higher than previous expectations that these sales would contribute billions of dollars to total revenue. Nvidia had forecast total revenue of about $32.5 billion in the third quarter ending in October.
“Countries all over the world want to have their own generative AI that will be able to incorporate their own language, incorporate their own culture, incorporate their own data into that country,” Chris said, describing AI expertise and infrastructure as “national imperatives.”
She gave the example of the National Institute of Advanced Industrial Science and Technology in Japan, which is building an AI supercomputer with thousands of Nvidia H200 graphics processors.
Governments are also turning to AI as a measure to enhance national security.
“AI models are trained on data, and for political entities — especially states — their data is confidential and their models need to be customized to their unique political, economic, cultural, and scientific needs,” said Shane Rao, a semiconductor analyst at IDC.
“So, they need to have their own AI models and custom hardware and software architectures.”
Washington is tightening controls on exports of advanced chips to China in 2023, seeking to prevent any breakthroughs in artificial intelligence that could help the Chinese military, hampering Nvidia’s sales in the region.
Companies are looking to take advantage of government efforts to build AI platforms in regional languages.
IBM (NYSE:) said in May that the Saudi Arabian Data and Artificial Intelligence Authority will train its ALLaM Arabic language model using the company’s Watsonx AI platform.
Countries that want to build their own AI models could drive growth opportunities for Nvidia’s GPUs, as well as big investments in hardware from big cloud providers like Microsoft (NASDAQ:), said Bob O’Donnell, senior analyst at TECHnalysis Research.
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