It’s official: Nvidia is no longer just a gaming company
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Nvidia Corp., long known as a manufacturer of graphics chips for video games, becomes a data center business.
Nvidia announced strong first quarter profits on Thursday as data center chip sales jumped 80% to more than $ 1 billion in a single quarter for the first time, to $ 1.13 billion, while Game Tokens increased 27% to $ 1.33 billion. As part of the report, Nvidia has also started to present its business segments in a new way, with segments for IT and graphics, establishing a side-by-side rivalry for the two key areas.
Although the segment change from a division between Nvidia’s GPU activity and its Tegra processor activity to the differentiation between the uses of the chips sold by Nvidia, may seem minor, it is a sign that Nvidia thinks that these two The uses of its chips are just as important.
“It was time to come up with a new vision that would lead us into the future,” Nvidia chief financial officer Colette Kress said in an interview with MarketWatch on Thursday.
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The graphics segment will include graphics chips for games, PCs and their game streaming service and infrastructure, as well as some other companies, and totaled $ 1.9 billion in Thursday’s report. The promising IT segment totaled $ 1.17 billion in revenue, up 69%, and includes data center platforms, high-performance computing, autonomous vehicle chips and software and robotics.
The two large companies took advantage of the transition to working from home while taking refuge there during the global pandemic. In addition, starting next quarter, its data center activity will include proceeds from the acquisition of Mellanox, a $ 6.9 billion high-performance computer chip maker, with which it recently partnered. with two of the world’s fastest supercomputers.
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Nvidia co-founder and CEO Jensen Huang told analysts during the corporate earnings conference call that graphics chips are now considered a central part of server architecture.
“The notion of accelerating deep learning and machine learning using our GPUs is now common sense,” said Huang. It was not so before. People still considered it esoteric, but today data centers around the world expect a very large part of their data center to be accelerated with the GPU. “
In fact, Nvidia’s future right now is the continued growth of the data center and the acceleration of workloads, like AI, in this environment. Nvidia has shown that it is in a good position during the pandemic, with the exception of its automotive activity, which fell by 7% during the quarter and is expected to worsen to fall to 40% in the current quarter, The demand for automobiles has plummeted and research on autonomous vehicles has stalled, at least for now.
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It’s not going to be like this. He will come back, “said Huang.” And nobody knows at what level he will come back and for how long, but he will come back. “In the auto industry, they are crouching right now, but they will absolutely invest in it future of autonomous vehicles. They must. Or they will disappear. “
Although his auto business is now an afterthought, CFO Kress thinks the data and game center is in a “race” to see what becomes Nvidia’s biggest business segment, showing just how much he went. your data center business is here. basic game that made the company a Silicon Valley powerhouse.
When asked if the math could ultimately beat and beat the games, she declined to comment.
“When we get to this point, you will be the first to know,” said Kress. “The best thing about the multiple views of these segments is that they have a very high TAM [total addressable markets]. We will see as they grow. “
Since Nvidia made its breakthrough in machine learning, there have been three companies: a solid and reliable manufacturer of gaming chips, a growing but still young force in data center chips, and an automotive supplier that is changing the automotive activity is now further from its promise and the data center activity becoming a new core business, Nvidia has become a different and powerful beast.