Nvidia’s Jensen Huang Claims New $200 Billion Market Potential

Nvidia’s founder and CEO, Jensen Huang, is arguably one of the industry’s most dynamic promoters regarding his company’s prospects. He may even outshine Salesforce’s Marc Benioff in his unwavering enthusiasm for future revenue growth.

Despite this, Huang consistently meets expectations with tangible results.

Rather than urging you to be skeptical about his assertion of a “brand new $200 billion TAM for Nvidia,” I believe he has built a degree of credibility over time.

Huang attributed this vast new opportunity to Nvidia’s recently launched CPU, Vera, which debuted in March. During Wednesday’s earnings call—following a staggering quarterly revenue of $81.6 billion and a forecast of $91 billion for the next quarter—Huang positioned Vera as a game-changing offering, one that is already achieving noteworthy sales.

Nevertheless, concerns linger in the financial sector regarding what could disrupt Nvidia’s dominance.

Recently, anxieties have focused on the CPU segment. While Nvidia has established itself as a leader in GPUs, the CPU market has traditionally been the domain of giants like Intel and AMD. (Nvidia has ventured into CPU production in the past, but it’s not the company’s central focus.)

For instance, last month Amazon Web Services announced a significant contract with Meta for millions of its own AI CPUs. CEO Andy Jassy has been vocal about AWS’s capabilities in producing AI chips, asserting that they could rival or even surpass Nvidia’s offerings.

With the introduction of Vera, which can be purchased independently or alongside its Rubin GPU, Huang is optimistic about unlocking “a significant new growth driver.” He described Vera as “the world’s first CPU, purpose-built for agentic AI,” during the call.

“Vera opens a brand new $200 billion TAM for Nvidia, a market we have never addressed before, and every major hyperscaler and system maker is partnering with us to deploy it. The world is rebuilding computing for agentic AI and robotic physical AI. Nvidia sits at the center of these transitions,” he stated with characteristic enthusiasm.

Huang clarified that while GPUs manage the “thinking” aspects of AI models, CPUs primarily facilitate the operational tasks assigned to AI agents. He envisions a future where these agents operate their own CPU-driven machines.

Vera’s design focuses on processing tokens rapidly, contrasting traditional cloud architecture CPUs, which emphasize multi-core performance for handling numerous app instances.

While this rationale appears sound, one might wonder how Huang expects Nvidia to dominate in the increasingly competitive arena of agentic CPUs.

He claims Nvidia has already secured $20 billion in sales for standalone Vera CPUs this year, with plenty of growth potential ahead.

“The world has a billion human users. I anticipate that we’ll eventually have billions of agents. Though not yet, we are moving toward that future, and all these agents will utilize tools similar to how humans engage with computers today,” he remarked.

“We’re going to need a lot more CPUs,” he concluded.