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In a conference call with analysts, Huang Renxun said that AI was "the most powerful force of our time", with more than 4,000 AI start-ups working with Nvidia, double the number of 2000 AI start-ups in April 2017. However, in many areas, such as self driving cars, it takes a while to transform the application into great achievements, which is the future prospect of artificial intelligence growth.
Game and graphics card business
Nvidia, headquartered in Santa Clara, California, mainly develops graphics chips (graphics processing units or GPUs) and integrates AI technology into them.
Although AI is on the road to growth, games are still the biggest part of the business. Nvidia reported revenue of $2.58 billion and earnings per share of $1.24 in the second quarter ended July 31, with games accounting for 50.3% of total revenue.
Because of Nvidia's latest RTX graphics chip and real-time ray tracing technology in Turing architecture, the game business is growing again. Last fall, RTX chips started slowly because the game was not ready for the extreme lighting and shadows RTX brought. But as RTX slashed prices through its product line, it stimulated Gamers'desire to buy, helping generate $1.3 billion in game revenue this quarter.
During the quarter, Nvidia strengthened its GPU lineup including GeForce RTX 2060 Super, GeForce RTX 2070 Super and GeForce RTX 2080 Super. In addition, with the advent of new real-time ray tracing technologies, a number of major games, such as Call of Mission: Modern Warfare, Cyberpunk 2077, Watchdog: Legion and German Headquarters: New Blood, have also received new support.
Meanwhile, laptop manufacturers released 27 new RTX Studio laptops this quarter, especially for streaming media or content creators. More than 100 RTX laptops will be on the market during the holiday season.
Collette Kress, Nvidia's chief financial officer, said on a conference call that while consoles also contributed, production usually rose in the second and third quarters, but declined in the fourth quarter, due to seasonal demand for Nintendo Switch consoles (using Nvidia Tegra processors). Therefore, RTX graphics cards are still an important driving force for Nvidia games.
Collette Kress said: "Looking ahead, I expect that ray tracing will revitalize game graphics." He pointed out that laptop computer games are one of the fastest growing segments of the industry, so this holiday season will usher in a good upward trend in revenue.
Artificial intelligence has been extended to all industries
It's not clear when AI will exceed Nvidia's game revenue, but tens of thousands of AI start-ups are using AI platforms to develop applications in the cloud that they are providing to large vertical industry companies, such as retail, banking, network security, robots, and so on.
Huang Renxun predicted: "The application of artificial intelligence is expanding to every industry."
In the new AI wave, there are already specialized AI processors to handle different tasks, from training neural networks to identifying objects to reasoning, or using more intelligence to draw conclusions based on fewer data.
Amazon's Alexa and other devices can process conversations, recognize natural voices and provide answers close to consumer queries. Instead of running for long periods of time, these machines provide fast, less accurate but simplified answers. Placing more intelligence in everyday objects, at the edge of the network rather than at the center of the data, is also part of the new wave of AI.
We see more AI being loaded into the Internet of Things and into your everyday household items. In addition, AI and autopilot will change the transportation industry of $100 trillion. Nvidia is working with companies such as Volvo to develop development projects that could generate a lot of revenue.
In the CEO's words, AI will drive long-term demand because it is "the most powerful force of our time".