Jensen Huang says he’s found a “completely new” $200 billion market for Nvidia

Nvidia founder and CEO Jensen Huang is perhaps one of the greatest corporate hype men of all time when it comes to his company. He may also beat Salesforce’s Marc Benioff when it comes to continued optimism about his company’s future and revenues.

However, it lives up to the hype quarter after quarter.

Instead of warning you not to be skeptical by announcing that he found “a new $200 billion TAM for Nvidia,” I think he gained a little confidence.

Huang placed this huge new market at the feet of Nvidia’s new CPU product, Vera, which was introduced In March. Speaking on an earnings call on Wednesday — after Nvidia reported another record quarter with revenue of $81.6 billion and forecast $91 billion for the next quarter — Huang pitched Vera as a potentially transformative product. Which already has promising sales numbers.

But no matter how well Nvidia does, Wall Street is worried about what will knock Nvidia off the ground.

Recently, these concerns have focused on the CPU. Nvidia is the king of the GPU, while the CPU markets have historically been owned by companies like Intel and AMD. (Nvidia has made CPUs previously, of course, but that’s not its core business.)

For example, last month, Amazon Web Services boasted a massive multi-million dollar contract with Meta Amazon’s homegrown AI CPUs. Amazon CEO Andy Jassy has been clear in his belief that AWS can create AI chips, both GPUs and CPUs, at least as well. Maybe better than Nvidia.

But now, with the Vera CPU, sold on its own and bundled with the Rubin GPU, Huang believes he has opened up a “major new growth driver” for his company because Vera, he believes, is “the world’s first CPU, specifically designed for agentic AI,” Huang said on the call.

“Vera has opened a brand new $200 billion TAM project for Nvidia, a market we’ve never tackled before, and every major system maker and system maker is collaborating with us to deploy it. The world is rebuilding computing for agentic AI and automated physical AI. Nvidia is at the center of these transformations,” said hype man Huang.

He explained that while the “thinking” part of the AI ​​model uses GPUs, the agents mostly run on CPUs. They use CPUs to do the tasks assigned to them, and the expectation is that they will run their own form of CPU-based computers.

Vera is for proxies because it is specifically designed to process tokens as quickly as possible. This is in contrast to classic cloud architecture CPUs that are designed with “cores,” or the ability to run multiple instances of applications as quickly as possible.

This seems logical, but with major cloud providers as well as startups looking to develop AI chips, what makes him think Nvidia would be the go-to source for proxy CPUs?

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

“The world has a billion users, human users,” he said. “My sense is that the world will have billions of agents, not today. I mean we’ll grow in it, but we’ll have billions of agents, and those billions of agents will be using tools. And those tools will be like computers, just like we humans use computers today.”

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