Nvidia CEO Jensen Huang 10/8/25

0:00Bring in show music please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. NVIDIA CEO Jensen Huang. Our chips are quite special. We're the only company in the world today that builds all of the chips inside an AI infrastructure. Just as bold-faced as his$4.5 trillion chip maker are the companies it has invested in. OpenAI, XAI, CoreWeave. We've made some really terrific investments, and largely my only regret is that we didn't invest more. NVIDIA has a lot of cash, and you've got to figure out how you want to push that back out. Jensen Wong's regrets, are there some? And his vision for the future of intelligence.

0:43There's just an incredibly large set of new companies that are enabled by this revolutionary technology called AI. And so these new companies are going to be future giants, and it would be great to be part of them, support their growth. NVIDIA is on the front lines of the AI race against China, and the man who's been CEO there more than 30 years says it's a close one. China's well ahead of us on energy. We are way ahead on chips. They're right there on infrastructure. They're right there on AI models. That big interview coming up. Plus, we're on day eight of a government shutdown, and gold hits a record high.

1:22It's Wednesday, October 8th, 2025. 5. Squawk Pod begins right now. Stand Becky by in 3, 2, 1. Cue it, please. Good morning, everyone. Welcome to Squawk Box right here on CNBC. We're live from the Nasdaq market site in Times Square. I'm Becky Quick, along with Mike Santoli. Joe and Andrew are off today. Mike, welcome back. Yes, exciting stuff. Thank you. Yeah. A rare day of declines for the markets yesterday. It was a pullback, but not a significant one. It was a little bit of a wobble. It probably felt worse than it was because the market has been so smoothly going higher. And yes, we mentioned that Oracle story gave a little bit of a gut check to some of the AI-focused names.

2:02To me, more representation of how on edge people are, but how far some stocks have moved as opposed to the broader thesis. But we'll talk about that. There's also some weakness in consumer areas like home builders. So a little bit of a mixed message from the market. And then you've got gold adding to its recent gains. Mike pointed out yesterday when gold crossed above 4 ,000 for the very first time yesterday on this program, it closed yesterday above that$4 ,000, the level for the first time ever as well. If you've been watching from home, it's up by almost 55 % for the year to date. And that has been pretty phenomenal because, you know, it's acting like the safe haven, bonds or not.

2:38Well, yes, and actually I think that's a big part of it, where bonds globally have lost their status as the reliable diversifier for a lot of people, or there's just too much government debt out there, and it feels as if you want to go with scarce gold. Now, though, it seems like it's also kind of a momentum trade. There's also some interesting work showing when gold has its best runs during the global trading day. And it's European market hours, Asia market hours. So definitely the rest of the world is trying to find reasons to own more, top up their allocations, whether it's central banks or others.

3:11So we'll see. It's very, very stretched to the upside on a technical basis on every level. So we'll see if that matters in the short term. Well, just the climb for gold, if you look back at a longer term chart, it went from not moving much at all to moving very rapidly once you got into COVID. And once you've seen some of the problems that have advanced since then. But this move this year is pretty phenomenal. It hasn't moved like that since the 1970s. No, there's been this real steep acceleration in the price. And the other the other piece of it is it's happening while risk assets are very elevated as well.

3:43Right. So we do have this sort of almost like the globe is saying, we'll take a barbell approach. That's going to be our diversifier. We want to invest in expensive, innovative companies on the other side. Yeah. Back in Washington, federal workers furloughed in the ongoing government shutdown could be at risk of permanently missing paychecks. Emily Wilkins joins us right now. She's got the latest on that front. And Emily, what day are we now in the shutdown? We're at day eight, Becky. And it's understandable. It kind of feels like Groundhog Day a bit around here. But look, at this point, the White House has been ramping up pressure and Democrats, though, have so far been immune.

4:18And the White House, as you mentioned, they've taken threats to drastic steps during the shutdown. The Trump administration did say yesterday that they are considering not paying furloughed federal employees, something that, of course, could deepen the economic impact of the shutdown. And then again yesterday, Trump said again that there would be massive federal layoffs. I'll be able to tell you that in four or five days if this keeps going on. If this keeps going on, it'll be substantial. And a lot of those jobs will never come back. Congressional Republicans, including Republican leaders, said they personally do not want to see furloughed workers go without pay.

4:56And you actually even saw some Republicans like Senator John Kennedy say that workers will get their back pay once the shutdown is over. We've always paid back pay to the military and federal workers. And Congress has already always appropriated the money. And we will this time. The Senate is going to vote again today to keep the government funded. We expect that vote early this afternoon. Of course, in previous votes, we have seen three Democrats and independents cross over to vote with Republicans. I think the big question today is if we're going to see any more or any fewer join Republicans this time around, or if we're still going to be stuck in the stalemate that we've been at for more than a week now.

5:39Gus? You know, what surprised me yesterday, Emily, was the idea that Angus King is now thinking about changing his vote and voting with the Democrats again on this. That would be, you know, pushing us a little further apart than we had thought. The idea to this point had been that maybe some Democrats would feel some of this pressure and peel off. But what do you think is really happening on that front? Is this a situation where there is pressure that's building on some of these situations or not? And I know the Virginia race is being watched very closely for the impact there because of the number of government jobs in that state.

6:12Absolutely, Becky. And I think this is what you're seeing with the White House right now, talking about these layoffs, talking about not paying federal workers. It's all stuff that is meant to put additional pressure on Democrats. At this point, they seem to be resisting. And I think part of that is because when you do talk with Republicans and Democrats about what Democrats want to see, an extension of these Affordable Care Act tax credits, you do see some movement on that. I mean, the other day, Trump coming out saying that he will work with Democrats in the halls of Congress. Almost every Republican who I talk to now seems to say, hey, yes, we are open to finding a workaround on this.

6:49Marjorie Taylor Greene coming out and saying that they need to be extended in some way, shape or form. You have seen a bit of a shift in how Republicans are talking about these tax credits, talking about health care. You're just now at this point where Republicans say we're not going to go any further until the government is reopened. And Democrats saying, well, we're not sure we trust that you will come to the negotiating table if we give you the votes to reopen the government. So I think what you're seeing right now is a lot of side conversations, a lot of bipartisan groups of senators trying to see what the way out of this is.

7:20And when we spoke with Angus King about whether or not he'll switch a vote, he's basically saying that he needs a little bit more from Republicans in terms of commitments for the Affordable Care Act tax credits. Democrats have really decided this is going to be a good issue for them, a potentially winning issue for them. But of course, we'll see how these dynamics change, especially as we get into next week. And October 15th is now circled on everyone's calendar as the day that members of the military are going to start missing pay and missing a paycheck if this shutdown continues until then. Emily, thank you.

7:52Emily Wilkins. We're watching Oracle. shares fell about 2.5 % yesterday on a report from The Information that raised questions about the company's plans to buy billions of dollars worth of AI chips and rent them as a cloud provider to clients like OpenAI. Oracle was down close to 7 % at one point following that report. The information report said Oracle had 14 % gross margins on$900 million in sales in its NVIDIA cloud business in the three months ending in August. That's much lower than Oracle's overall gross margin of around 70%. The report said Oracle's recent transformation into a key cloud and AI company could run into profitability challenges because of the expense of NVIDIA's chips and Oracle's aggressive pricing on its chip rentals.

8:35We will get into all of this when NVIDIA CEO Jensen Wang joins us here live. You know, he spoke with Jim Cramer's investment club yesterday, and this was something that Jim brought up with him. Asked him about this, said, what What should we make of this? And Jensen basically said, look, Oracle's going to make a lot of money on this down the road. I think some of the older chips that they service, they may make some money on, too. But that is a steep differential in profit margins that they're seeing with this deal where they're renting those chips versus what Oracle normally would be seeing. There's no doubt about that.

9:06There was quickly, though, an assessment by the market itself, right? Down 7 % and then a bid because this is kind of the way new product cycles go. Right. Before you scale it, before it's mature, you actually are not reaping the same kind of profitability. But there have been concerns that Oracle's model and the core weaves, that those middlemen may not ultimately be the biggest beneficiaries. But that doesn't mean it's not viable. It doesn't mean it's not viable. But then again, you have seen big runs in these stocks. You're looking at Oracle, you're at a date up 70%. Yes, it is down 20 % off its high.

9:38So it's this exuberant run. And it depends on where you're starting from. But it's a great run. In the meantime, Dell CEO Michael Dell says that AI data center construction will eventually top out. But that moment hasn't come yet. Joining Closing Dell Overtime yesterday, Dell said that demand for computing power is currently, in his words, tremendous. I'm sure at some point there'll be too many of these things built, but we don't see any signs of that. And look, there have been periods in the past where there's like a digestion cycle. But based on the demand signal we see and what we're hearing from customers, we're watching, carefully understand what's going on.

10:22It seems like the demand is very solid. Dell shares rose about 3 % yesterday after the company increased its long-term revenue and profit growth outlook. Dell's AI servers are powered by NVIDIA's Blackwell Ultra Chips. The company sells its devices to customers like cloud service provider CoreWeave and Elon Musk's XAI, kind of showing you the interwoven nature of all of these big players. They're all customers and competitors and at some points investors. Financial backers. Yeah. I mean, I guess the demand and the capital needed is so vast that everybody has to pull from wherever they can. And obviously everyone racing to the same point.

11:01And speaking of XAI, Bloomberg reporting Musk's AI startup is increasing the size of an ongoing funding round to$20 billion with help from backers, including NVIDIA. The report says part of the combo equity and debt deal involves the purchase of NVIDIA AI chips to be leased to a huge XAI data center in Tennessee. A little less than three weeks ago, Musk posted on X that XAI was not currently raising any capital. And the$12.5 billion of reported debt as part of the 20s in some special purpose vehicle, that's another part of the story where some of this financing is happening in debt as opposed to just equity, as opposed to just coming out of the cash flow of the big cloud service providers and such.

11:43And so, you know, again, it sort of it builds up the perceived riskiness of the whole venture. I mean, I'm really excited to talk to Jensen Wong about all of these things. It feels like the news flow is just so fast, just so rapid. Absolutely. NVIDIA's front and center for everything that's happening in the AI world. So they're kind of living through this fire hose, too, if not the ones who are actually pumping the water through the fire hose on some of these issues. One of the things I'd like to talk to him about that, just to get his ideas on capital allocation, right? NVIDIA has a lot of cash.

12:14Yes. And you've got to figure out how you want to push that back out. Do you use it for research and development, to build the company? Do you give cash back to shareholders? Or do you find ways to make these other investments? And getting his thoughts on how he sees all of that. Based on the consensus, I just ran it this morning. It's supposed to produce, NVIDIA is supposed to produce$240 billion in free cash flow this fiscal year and next fiscal year. So what do you do with that? Their CapEx needs are actually very, very low. It's ironic, obviously, that they don't really need to do a lot. Because they've been at the forefront of the research.

12:44It's intellectual property, basically, and they have it. So, yes, that's a huge question. CFO has said we'd rather just kind of accelerate the growth of the whole ecosystem as opposed to buy back a ton of stock or dividends. But the deals they cut are better than what anybody else can do. I would argue that NVIDIA's deal with OpenAI is much better than AMD's deal with AHA. They're coming from an advantage. They have a better position that they can do it. They've got the cash flow and they can put it in. Yeah, it'd be great to get his updated thoughts on that. Well, NVIDIA CEO Jensen Wong says his company will continue to sponsor H-1B worker visas despite a potentially large financial hit from the government.

13:22In a message to staffers seen by Business Insider, Wong said NVIDIA will cover all costs associated with the visas. Those are set to balloon thanks to a new executive order from President Trump. the government will impose a new$100 ,000 fee on H-1B applications. In the memo to workers, Wong, who is himself an immigrant, said his company's success wouldn't be possible without immigration. We'll dig into this and much more when Jensen Wong joins us here live. Cheese will be next. Coming up, today's big interview, NVIDIA CEO Jensen Wong, how he thinks about different kinds of artificial intelligence.

14:00Where the real value for enterprises and companies are is specialized intelligence. And where the value for consumers, general intelligence. His investments in Sam Altman's OpenAI and Elon Musk's XAI, and how the United States is stacking up to competition from China. Overall, I would say we're not far ahead. If you look at the entire stack, they're way ahead on energy. I am so happy that President Trump leaned into pro-growth, pro-energy growth, so that an entire industry above it could grow. We'll be right back.

14:38This is Squawk Pod from CNBC, today with Becky Quick and Mike Santoli. Up on Becky, Q. Global spending on AI is projected to reach nearly$1.5 trillion this year, and it could top$2 trillion in 2026. Joining us right now is one of, if not the key player that's been driving innovation in the field, Jensen Wang. He is the CEO of NVIDIA. He's got a market cap of$4.5 trillion, makes it the world's most valuable company. And Jensen, it is a pleasure to have you here on set. I'm so happy to be here. Nice to see you. Not as happy as we are. Thank you for coming in today. It's great to see you. Thank you.

15:16There are so many things that I'd like to talk to you about because it seems like every day there is this huge fire hydrant of news that's all about AI, and your company is at the center of most of that news. So if you don't mind, maybe we can just run through some of these headlines and you can explain what's happening from your perspective. I'd love to. Okay, let's start with the deal that you cut first with OpenAI that you've talked a lot about that was then followed up by this deal earlier this week with AMD and OpenAI. It's got a lot of people trying to figure out what the dynamics are of this industry.

15:48What do you think about it? Did you know about that deal before it was announced? Not really, but our deal is very different than theirs. We've been working with OpenAI through Azure, Microsoft, and OCI and CoreWeave, and so through third parties for quite a long time. In fact, in 2016, I delivered the world's very first AI supercomputer called DGX1 to a startup, a nonprofit startup in San Francisco, and that company turned out to have been OpenAI. And so we've been working with them for quite a long time. the OpenAI partnership is an addition to what we're already doing with them in the cloud.

16:27All of the cloud contracts, we're going to continue to execute on all that. But our partnership with them is quite unique in the sense that this is the first time we're going to sell directly to them. Until now, we've been largely selling, we've been only selling through the clouds. And so we're going to keep doing that. But the thing that's really exciting is that now, by selling directly to them, we could help prepare them for a day when they're self-hosted hyperscaler. And our agreement basically entails us selling entire systems and infrastructure to them. You know, we're the only company in the world today that really focuses on building the entire AI infrastructure from CPUs to GPUs to networking chips and switches of all kinds and all the software stacks that go along with that.

17:15And so we're quite a unique partner for them to be able to do this. I guess the question becomes, it's great for you to sell it directly to them, but they don't have the money to buy it at this point. Is that why the deal was structured the way it is, where you'll get a stake in OpenAI over time? They don't have the money yet. And the way that it's going to happen, for every gigawatt of AI factories, you're probably going to need about 50 to 60 billion dollars for the land-powered shell and all the computing and networking and and everything that goes along with that. And they're gonna have to raise that money through, first of all, the revenues, which is growing exponentially, equity or debt.

17:58And they gave us the opportunity to invest alongside other investors when the time comes. And so it's not something we have to do, but it's something that they're giving us the opportunity to do, and I would love to do. You know, one of the things that we did, we invested in OpenAI early on. My only regret is that we didn't invest more. I mean, this is the most profitable, well, the most valuable startup company ever. And so this is a great opportunity. You mentioned that your deal is very different from AMD's. AMD is in a situation where they're basically giving away a big chunk of their company to be able to be a partner with OpenAI and sell them some of their goods.

18:40Is that how you read it? Yeah, I saw the deal. It's imaginative. It's unique and surprising. Considering they were so excited about their next generation product, I'm surprised that they would give away 10 % of the company before they even built it. And so anyhow, it's clever, I guess. Yeah, I wondered the same thing. And Lisa Su, who, by the way, is a distant cousin of yours, right? Yeah, she's terrific. At EMT? Yeah, she's terrific. The way they've set this up, though, of giving it away, they're also making some big assumptions that their chips are going to be able to compete with your chips that are coming out down the road.

19:19Do you think that's the case? Well, you know, our chips are quite special and we're running really fast. We're the only company in the world today that builds all of the chips inside an AI infrastructure. And today, back when we first started, five years ago even, an Ampere chip or a Hopper chip is just one chip. Today, if you want to build one of these AI supercomputers, it takes a whole bunch of different types of chips that get the performance out of it because, you know, Moore's law, the transistor itself is really slowing down. And we want to create those X factors of performance increase every single year.

19:57And we're delivering these new systems every single year. And every year it's multiple times faster than the last generation. In order for us to do that, we have to optimize the entire AI infrastructure. That supercomputer is the most complex computer the world's ever made. And we optimize across all of that, design new chips every year. So one chip alone is not probably going to be able to deliver the type of results we do. But anyways, they're a really good company and we take them very seriously. And we just kind of have to keep running fast. Let's talk about vendor financing, because that has been something that has raised a lot of questions on Wall Street since you cut this deal with OpenAI.

20:33Yesterday, Bloomberg is reporting that you have a$2 billion in financing that you're going to be involved with with XAI to help them with these same stories. But this idea of circular financing, your customers can't afford to buy these chips yet, so you're going to help them out with money along the way. That leads some people to think back to what happened with companies during the big buildup like Ellucent or Nortel in the early days. Is this different, and if so, how? Well, first of all, XAI, I'm super excited about the financing opportunity that they're doing. You know, the only regret I have about XAI, we're an investor already.

21:09The only regret I have is I didn't give him more money. You know, almost everything that Elon's part of, you really want to be part of as well. And he gave us the opportunity to invest in XAI. I'm just delighted by that. And so that's an investment into a really great future company. And I'm really excited about that. That's not venture venture. That's not vendor financing per se. But what's going on? What's going on in the world versus what happened in 2000 is just dramatically different. You know, back then, as you recall, there were pets dot com, hospitals dot com and all of the Internet companies combined was what?

21:4530, 40 billion dollars in size. If you look at the hyperscalers now, that's where the first tranche of. AI infrastructure is building. If you look at the AI, the hyperscalers, about$2.5 trillion of business that's already operating today. That business, that$2.5 trillion business, and the CapEx that goes underneath that is about, call it$500 billion. That transition from a classical CPU-based computing to now generative AI computing powered by GPUs, that transition is just starting. So we've got to build into half a trillion dollars worth of capacity infrastructure that's already naturally growing by itself.

22:32And we're in the beginning phases of that. If you just look at NVIDIA's AI infrastructure business, call it a couple of hundred billion dollars so far, you're a couple of hundred billion dollars into a multi-trillion dollar build-out. So that's number one. The second part of it that's really unique is that we have a new generation of AI companies. The new AI companies like OpenAI and Anthropic and XAI and companies that are, well, you know, thinking machine labs from Mira and Ilya Susqueverse SSI and Misha's company Reflection. I mean, there's a whole bunch of amazing AI model builders now. This generation of AI model builders, what's happened in the last several months, a transition happened that is really, really important.

23:18For the last several years, they've been generating tokens, these AI tokens, basically at a loss. And the reason for that is because the early AI models weren't, they were super interesting, really captivated a lot of attention, but they weren't useful enough to pay for it. The last several months, it's been very clear that the new technology is now reasoning. It's doing research. before it answers a question. It goes on the web and studies other PDFs and websites. It can now use tools, generate information for you, and it creates responses that are really useful. I use it every day to the point where now the tokens are profitable.

24:00The question, though, is who is going to continue to pay for that build-out? Is it the big companies like Procter & Gamble? Is it consumers who are going to do this? I mean, my doctor showed me the AI that he's using, And it's incredibly helpful, but there's still a question about whether he's going to pay for it or the company he works for is going to pay for it. Well, hopefully both. I think there's the consumer part of it. You know, a lot of open AI customers are consumers, and they're paying for it. But the thing that's really cool is that the enterprise AI build-out that's happening now, my favorite enterprise AI service is Cursor.

24:35Cursor is an AI coder. And every one of our engineers, 100%, is now assisted by AI coders. And our productivity has gone up incredibly. And so you're now seeing enterprise AI companies like Cursor, Open Evidence, I love Lovable. All of these companies are some of the fastest growing companies in the world, and they address enterprise. And so enterprise AI is here. I wonder how you think about, Jensen, the ultimate destination where all this is actually building toward. I don't know. There was a post from David Conney, his Sequoia partner, this week saying, look, AGI is the only thing that can justify the volumes of capital spending right now, artificial general intelligence.