00:00 Speaker A
Nvidia’s role obviously as the largest company, but I I wonder if it is as much a bell weather of the AI tech trade as it once was, as people try to struggle for direction on where disruption is is going to come from and what it’s going to affect. And I wonder if it’s not Nvidia, maybe I’ll get your take first on whether you think Nvidia still is a bell weather, but if it’s not Nvidia, where do we look for for that direction? I mean, we got like
00:27 Speaker A
Sitrini thought exercises, right? But I don’t know what we will what we’ll have that’s concrete that tells us if things are sort of being disrupted or not. Ruben, I’ll go to you first on that.
00:43 Ruben
Yeah, I think Gal and I are going to agree on on most of what I say here and um I absolutely think Nvidia’s a bell weather and to Gal’s point, I mean this is not just about GPUs. This is a platform solution company that is driving innovation across the AI infrastructure stack. They are building AI factories that include compute, networking, software across the stack and they’re driving innovation across the space because of that.
01:13 Ruben
We’re seeing faster innovation on networking standards because of Nvidia. We’re seeing faster cycle times on processor development because of Nvidia. And so I think, you know, that’s going to continue and uh again, this is a company that’s got the biggest R&D budget around and they’re using the R&D budget and and cash flow. I mean, they’re close to $100 billion in cash flow last year, and we think it’s going to be well over $100 billion in cash flow this year.
01:36 Ruben
to not only invest in the AI ecosystem, but also to invest in ancillary technologies. They they recently did an acquisition, um, acquire, I guess of Grock uh to add even more um, you know, potential areas of innovation around that uh AI infrastructure stack that they’re building. And so I think that’s going to continue and that’s going to be driving the rest of the industry around AI and because of that, we absolutely think that Nvidia is going to remain the bell weather when we speak about AI.
02:03 Speaker A
Gal, what do you think? Are you agreeing with everything Ruben’s saying?
02:08 Gal
I I agree in the sense that Nvidia is going to capture most of the profits, right? The AI the deployment of the AI technology is happening because of really a handful of companies. TSMC, Nvidia, and then Microsoft, Amazon, Google. Now, the AI trade has expanded significantly to include those companies, to include the memory companies, the optical companies. And so we’re no longer in a state where Nvidia is is the only determinant of where the AI trade is going. I think we’re past that.
02:38 Gal
And in fact, I think investors have mostly realized that they know what what Nvidia is going to report about a month earlier when Microsoft, Amazon, Google and Meta report. Really, we we’ve known this positive result for a month because all those companies told us they’re going to increase their cap backs. And they’re the ones that we’re going to learn from about the success of AI.
03:00 Gal
They’re the ones that have all the customers, both business customers as well as consumers through Gemini and Open AI. And so the fact that they’re telling us that not only are they continuing to build data centers, but they’re increasing their capex, that tells us that they see the demand. They see companies using AI and committing to use AI for 3 to five years, which is why they’re building the data centers.
03:22 Gal
And they see consumers using these tools from Open AI, from Anthropic, from Gemini more and more and being willing to pay for them more and more, which you can see in the growth of Open AI and Anthropic, which is absolutely unprecedented. These companies are still tripling in spite of the fact that they’re at a 15 and 20 billion dollar uh a year run rate now. So that’s where we’re going to see the success of AI.
03:46 Gal
The growth of those companies as well as the continued commitments from the deployers of data centers to continue to build out that uh that capacity for AI compute.