Nations Building Their Own AI Models Add to Nvidia's Growing Chip Demand

FILE PHOTO: AI (Artificial Intelligence) letters and robot hand miniature in this illustration, taken June 23, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: AI (Artificial Intelligence) letters and robot hand miniature in this illustration, taken June 23, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
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Nations Building Their Own AI Models Add to Nvidia's Growing Chip Demand

FILE PHOTO: AI (Artificial Intelligence) letters and robot hand miniature in this illustration, taken June 23, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: AI (Artificial Intelligence) letters and robot hand miniature in this illustration, taken June 23, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

Nations building artificial intelligence models in their own languages are turning to Nvidia's chips, adding to already booming demand as generative AI takes center stage for businesses and governments, a senior executive said on Wednesday.
Nvidia's third-quarter forecast for rising sales of its chips that power AI technology such as OpenAI's ChatGPT failed to meet investors' towering expectations. But the company described new customers coming from around the world, including governments that are now seeking their own AI models and the hardware to support them, Reuters said.
Countries adopting their own AI applications and models will contribute about low double-digit billions to Nvidia's revenue in the financial year ending in January 2025, Chief Financial Officer Colette Kress said on a call with analysts after Nvidia's earnings report.
That's up from an earlier forecast of such sales contributing high single-digit billions to total revenue. Nvidia forecast about $32.5 billion in total revenue in the third quarter ending in October.
"Countries around the world (desire) to have their own generative AI that would be able to incorporate their own language, incorporate their own culture, incorporate their own data in that country," Kress said, describing AI expertise and infrastructure as "national imperatives."
She offered the example of Japan's National Institute of Advanced Industrial Science and Technology, which is building an AI supercomputer featuring thousands of Nvidia H200 graphics processors.
Governments are also turning to AI as a measure to strengthen national security.
"AI models are trained on data and for political entities -particularly nations - their data are secret and their models need to be customized to their unique political, economic, cultural, and scientific needs," said IDC computing semiconductors analyst Shane Rau.
"Therefore, they need to have their own AI models and a custom underlying arrangement of hardware and software."
Washington tightened its controls on exports of cutting-edge chips to China in 2023 as it sought to prevent breakthroughs in AI that would aid China's military, hampering Nvidia's sales in the region.
Businesses have been working to tap into government pushes to build AI platforms in regional languages.
IBM said in May that Saudi Arabia's Data and Artificial Intelligence Authority would train its "ALLaM" Arabic language model using the company's AI platform Watsonx.
Nations that want to create their own AI models can drive growth opportunities for Nvidia's GPUs, on top of the significant investments in the company's hardware from large cloud providers like Microsoft, said Bob O'Donnell, chief analyst at TECHnalysis Research.



EU Says Trump Arrival Will Not Impact Big Tech Cases

The logos of mobile apps, Google, Amazon, Facebook, Apple and Netflix, are displayed on a screen in this illustration picture taken December 3, 2019. REUTERS/Regis Duvignau/File Photo
The logos of mobile apps, Google, Amazon, Facebook, Apple and Netflix, are displayed on a screen in this illustration picture taken December 3, 2019. REUTERS/Regis Duvignau/File Photo
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EU Says Trump Arrival Will Not Impact Big Tech Cases

The logos of mobile apps, Google, Amazon, Facebook, Apple and Netflix, are displayed on a screen in this illustration picture taken December 3, 2019. REUTERS/Regis Duvignau/File Photo
The logos of mobile apps, Google, Amazon, Facebook, Apple and Netflix, are displayed on a screen in this illustration picture taken December 3, 2019. REUTERS/Regis Duvignau/File Photo

The European Commission said on Tuesday it was assessing its cases against Apple, Google and Meta and that President-elect Donald Trump's impending arrival in the White House did not affect its commitment to enforcing its laws on big tech.

The European Commission has carried out a series of investigations into US tech firms under its Digital Markets Act and Digital Services Act, which seek to make large platforms adhere to market rules and act against illegal content, according to Reuters.

Meta chief Mark Zuckerberg said Europe was "institutionalizing censorship".

"We have been very clear that no matter which administration is in place in third countries, this will not affect our enforcement work," a Commission spokesperson told the EU's executive's daily briefing.

The Financial Times reported that the European Commission was reassessing its investigations of Apple, Meta and Google in a review that could lead it to scale back or change its investigations that could lead to fines as US groups urge Trump to intervene.

The Commission denied it was carrying out a review.

"What we do have is upcoming meetings to assess maturity of cases, to assess the allocation of resources and the general readiness of the investigation," the spokesperson said.

The spokesperson said that the cases were still being handled at a technical level and so not reached a point at which decisions could be taken.

"Obviously there may be a political reality which puts pressure on the technical work, but we need to distinguish the two stages because we need to have a court-proof investigation," another spokesperson said.