Nvidia's business is dominated by data-center revenue, which accounts for nearly 88% of sales and encompasses GPUs, networking gear, systems, platforms, software and services. Spectrum-XGS is a hardware and software package designed to let separate data centers operate as a single, moving data quickly and predictably between facilities. Mega AI facilities house tens of thousands of GPUs, consume vast energy, and support massive model training, with examples including Meta's planned Louisiana campus and OpenAI's Stargate Project. Concerns exist about the financial risk if investments in mega data centers fail. Other AI developments include OpenAI's planned ChatGPT changes after a lawsuit, librarian-led AI testing, and China's plan to triple AI chip output.
Not surprisingly, most of the focus was on the sophisticated, powerful GPU chips that made the company a $4 trillion symbol of the AI boom. But the company's huge bet on AI isn't just about chips; it's about the massive, billion-dollar data centers being built to house them. Data center revenue accounts for nearly 88% of Nvidia's total sales-meaning the GPU chips, networking gear, systems, platforms, software and services that run inside AI data centers.
On the call, Huang touted an Nvidia product called Spectrum-XGS -a hardware and software package that together let separate data centers function like one. Think of it as the pipes and traffic control that moves data between data centers quickly and predictably. Wait-I know your eyes are already glazing over, but hear me out. One of my nagging questions has long been: What if the billions being bet on these mega AI data centers winds up going bust?
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