Nvidia's Milestone: Surpassing $1 Trillion Market Cap Amid Explosive AI Product Launch

0:00Nvidia has been making some big headlines recently in the news because they just passed a$1 trillion valuation. Now their share fell a little bit, so they're not quite there at the moment. But this is really impressive. Only a handful of companies have ever done this. And all of the success from NVIDIA is all due to AI and the fact that they are supplying most of the chips and they have a massive lead in chip sales for AI right now. So today on the podcast, we're going to be talking about why NVIDIA is doing so well, what the new products they've just announced are, where we see them in the future and what this entire industry looks like in general.

0:36So the first thing I want to say is that they, you know, of course, they're not at a trillion dollar valuation at this very moment. They hit there, although I don't think it's going to be very far off. It's, you know, they're over 900 billion. So it's pretty close. I think it is pretty interesting to know, though, that last fall, their CEO, Jensen Hang, he said that they had actually built too many gaming GPUs because that's what really propelled Nvidia in the past was, you know, they had these really powerful GPUs. They're really useful for gaming. They made a lot of hardware that crypto used.

1:10And as crypto sales and, you know, the whole cryptocurrency and mining markets kind of fell down and also, you know, demand for PC gaming was also falling, you know, because during the pandemic, gaming PCs and all of the GPUs that were used for that was really high. So with the pandemic over and cryptocurrency in a crypto winter, it looked like NVIDIA was about to take a bit of a beating because there's going to be a lot less demand. And actually, after they said that they built too many gaming GPUs, they were forced to sell them for less money. But by the time NVIDIA had its next report in February, ChatGPT was all over the news.

1:49And so the, you know, the kind of the outlook of NVIDIA was a lot more promising and their CEO really hyped up the potential that NVIDIA would be able to build, you know, data centers and be able to kind of supply what was happening in AI. So over the weekend, NVIDIA had NVIDIA's Computex 2023 keynote where their CEO spoke, and it was really just full of tons of announcements about AI. And that also included a demo of, you know, games using its avatar cloud engine, which we're going to talk about. And just all of the new all of the new chips, this new supercomputer they had built and a bunch of different things.

2:28And of course, that really propelled their stock price up, which jumped over 25 % last week. So the things that they announced at this conference that really propelled this forward and where we see them really being successful. The first one is the full production of the GeForce RTX 4080 Ti GPU. So for gamers, essentially, this is just a really, really big graphics card. This thing is highly coveted. If you go on their website right now, it's$1 ,200 starting. and of course you can have there's a lot more buying options a lot of people are you know just saying this thing is super ahead of its time and it's just essentially a very very powerful tool for gamers so that's the first thing they announced and of course that that helps but the next one that really dives into the world of AI is the fact that they announced something called NVIDIA Omniverse ACE and ACE stands for avatar cloud engine and I've actually heard a lot of companies talk about doing businesses within this area, a lot of startups.

3:30But essentially, it is a suite of real-time AI solutions for end-to-end development and deployment of interactive avatars and digital human applications at scale. That's what they say on their website. But pretty much what that means is this is all of the tools and engines you need for people to create essentially digital avatars that can talk and speak. This is powerful for video games because there's a lot of characters in video games, right? They're called NPCs, non-player characters that, you know, like for example, there might be like a tavern and there's like the guy that runs the tavern and you go into there in the video game and you ask him a question and he tells you like where to go next on your quest, right?

4:10So that's kind of how traditionally in the past there was just a script that he would say and you just had to get it out of him. But now what they're doing is they're hooking that up to ChatGPT where it has like content or it has text that it needs to pass on, but you have to actually have a conversation with these NPCs or these avatars. And, you know, that's just one use case, but there's a lot of different use cases. And anyways, NVIDIA has built out an entire engine, their ACE engine, that can take text, voice, video inputs, and it can spit out, you know, really complex conversations with avatars.

4:45And it's not just, you know, the conversation piece within a video game, but they actually do animated AI so they can bring an avatar to life with realistic 2D and 3D character animations based off of the video or audio input. So you could stick, you know, a video, you could, you could pre-record of, you know, one, one use case of this, you could pre-record a video, for example, in a, in a video game or an audio and feed it into this. And then it would have the character speaking that. It also does speech AI. So you can create a lot deeper kind of user engagement with avatars that can hear, understand, and speak in real time.

5:22Now, I think that this is absolutely massive when we're talking about speaking in real time. You know, you could have something like a life coach or a therapist or someone, you know, a soccer coach or anything really. And if you have this ability to have this real time speech where there's not any latency, so you could actually have a conversation. I believe this could be really, really powerful where you're not sitting there waiting for a response and it feels very fluid like a conversation. The other thing they have is conversational AI and NLP. So you can develop fully autonomous, intelligent avatars using pre-trained generative AI language models.

5:59And imagine just the power of, you know, this isn't just like a faceless chat GBT where you query it and it gives you responses, but all of a sudden this is an avatar that looks like someone or it's the 3D character of a person and it has all of this information and you can talk to it and it can give you information in real time. Really really powerful for a lot of different tools and kind of looking at their platform their omniverse a c platform It looks like it's very intuitive to kind of build these things out so If you're not you know people that it doesn't require a lot of coding skills Necessarily, it looks like they have a drag-and-drop kind of node connector builder where you can you can kind of make a flow and connect your connect your nodes together to create one of these like conversations or data pieces with one of these AI avatars.

6:50So very powerful. I think that's a really big platform. And of course, the whole genius of this platform is that I feel like NVIDIA just comes out with software that is just really intensive on using GPUs and using all of their hardware. So of course, they're making a product that is, you know, really intensive on hardware. So you're gonna have to buy the best hardware possible. The other thing that they announced is their CUDA zone, or I guess they more just talked about the fact that they have something called NVIDIA CUDA. It's a computing model and essentially allows developers to use powerful graphics cards to speed up their programs.

7:32They've been talking about the success of that. So that helped their stock price. they talked about the production of the GHXH100 GPU server. Essentially, this is just a really big computer for AI. And when I say really big computer, like this is a supercomputer. It really is one of the most powerful end-to-end AI supercomputer platforms. And they have built this to really bring together all the full power of their other NVIDIA products, their other NVIDIA GPUs and essentially make a very, very powerful computing platform to run AI models quickly. And for deep learning training, for performance and scalability, this is just like the supercomputer is next level.

8:18And of course, everyone is going to want to get their hands on this when training AI models. And this is going to be a really big sales seller for NVIDIA. Now, the thing that I do think is interesting talking about NVIDIA and all of these amazing, all of this amazing hardware they have, they really are much, much further ahead of the competition than you might think. Facebook, for example, or Meta, I guess, is, you know, they announced that they have some chips specially designed for training AI models. And what was really interesting is the fact that they said that their chips are not even going to be out till 2025.

8:54five. So, you know, just based off of that, you know, that Nvidia is miles ahead of the competition. Google has some chips, but it's really hard for these companies to really scale and hit mass production on this. So the fact that Nvidia has all the factories up, they have all the partnerships and they're ready to go right now. There will be competitors and a lot of people are definitely going to be jumping into this market. But I believe Nvidia is quite far ahead at the moment, similar to how, you know, other people like OpenAI or Google Bart are kind of ahead on the on the models there'll definitely be a lot of models but those you know those players are in the in the lead and nvidia right now is definitely in the lead and because of the the time it takes to spin up um you know uh it takes to spin up a warehouse to start actually or a manufacturing facility to actually start manufacturing all this i i think nvidia is going to keep that lead um and it's going to really benefit over the next couple years the other thing that nvidia talked about is the fact that they have a partnership with softbank for its distributed data centers in Japan.

9:54So that really gave them super chips to host all of their own AI data. And also NVIDIA has a partnership with WPP, which is the world's biggest advertising agency. So they've also started using AI to generate ad creatives, which I think is a really powerful tool that they have. And that's gonna change advertising a lot. So NVIDIA is starting to make connections with other companies to really scale out the usage of their tools. And also they're just creating a lot of really powerful hardware. So I do believe that we're going to see Nvidia continue to rise. Is Nvidia in a bubble right now, to be honest, because there's not a lot of other competitors doing what they're doing.

10:38And there is such high demand. Like, honestly, I think a bigger concern isn't necessarily like, oh, is some other competitor going to catch up. But I think Nvidia just kind of has a window where as fast as they can make some of their products, they will sell out there is massive lineups right now it's really hard to get to the front of the line there's wait lists for some of their best gpus for training ais and it's really hard to get some of their hardware so i think there's just definitely a shortage of that with the demand right now and i don't know if any competitors are going to be able to scale up any operations quick enough and so i really do believe nvidia is gonna gonna take this for a while but i think one of their biggest constraints is literally just if they can you know they have there's a gold rush right now and it's just how fast they can manufacture some of their products so this will be a really interesting area to continue watching in the future