Jensen Huang claims to have found a ‘brand new’ $200B market cap for Nvidia

Nvidia founder and CEO Jensen Huang is, perhaps, one of the greatest corporate men of all time when it comes to his company. He might even surpass Salesforce’s Marc Benioff when it comes to being relentlessly optimistic about his company’s future and revenue.

Still, he delivers the hype, quarter after quarter.

Instead of warning you to view the announcement that you’ve got Nvidia’s “new $200 billion TAM” with skepticism, I’d argue that you’ve gained a little trust.

Huang laid this huge new market at the feet of Nvidia’s new CPU product, Vera, which was launched in March. Speaking on a call Wednesday — after Nvidia posted another record-breaking quarter with $81.6 billion in revenue and forecast $91 billion in revenue next year — Huang positioned Vera as a transformative product. And one that already has promising sales figures.

But no matter how well Nvidia delivers, Wall Street has concerns about what will dislodge Nvidia.

Recently, such fears have focused on the CPU. Nvidia is the GPU king, while historically the CPU markets were dominated by companies like Intel and AMD. (Nvidia has made CPUs before, of course, but that’s not its core business.)

For example, last month Amazon Web Services complained about the huge contract it signed with Meta for millions of Amazon’s home AI CPUs. Amazon CEO Andy Jassy was clear that he thinks AWS can make AI chips, both GPUs and CPUs, at least as well, and maybe better than Nvidia.

But now, with the Vera CPU, which is sold alone and combined with its Rubin GPU, Huang believes he has opened a “big new growth driver” for his company because Vera, he believes, is “the first CPU in the world, purpose-built for agent AI,” Huang said on the phone.

“Vera opens a new TAM of $ 200 billion for Nvidia, a market we have never addressed before, and all the big hyperscalers and system makers are cooperating with us to send us. The world is renewing the computing of agent AI and robotic physical AI. Nvidia is sitting at the center of these changes,” said the hype man Huang.

He explained that while the “thinking” part of the AI ​​model uses GPUs, the agents run mostly on CPUs. They use CPUs to perform assigned tasks and, predictably, use their own brand of CPU-driven PCs.

Vera is for users because it is specifically designed to process tokens very quickly. This is in contrast to the CPUs of older cloud architectures that are designed with “cores,” or the ability to run multiple instances of applications very quickly.

That sounds reasonable, but with major cloud providers and startups pursuing AI chip development, what makes him think Nvidia will be the go-to source for agent CPUs?

Because, Huang says, Nvidia has already sold $20 billion worth of standalone Vera CPUs this year and we’re only just getting started.

“The world has billions of users, human users. My idea is that the world will have billions of agents, not today. I mean we will grow into it, but we will have billions of agents, and those billions of agents will use tools. And those tools will be like PCs, like we humans use PCs today,” he said.

“We’re going to need more CPUs,” he explained.