Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Live from San Francisco to our TV and radio audiences
Speaker 2: around the world. Welcome to a special edition of Bloomberg
Speaker 2: Technology imed Lovelo. In just a few moments in video,
Speaker 2: CEO Jensen Wang will join us for a live interview
Speaker 2: following the company's latest earnings report in video, posting revenue
Speaker 2: of forty four billion dollars for the fiscal first quarter,
Speaker 2: even as a slowdown in China weighed on results in
Speaker 2: video gave a positive outlook. I want to bring in
Speaker 2: Bloomberg's Ian King, who leads our coverage of semiconductors here
Speaker 2: at Bloomberg. And there is some math to be done,
Speaker 2: because the outlook for sales in the fiscal second quarter
Speaker 2: was forty five billion dollars plus or minus two percent.
Speaker 2: But the big disclosure was that there was eight billion
Speaker 2: dollars in revenue lost because of the restrictions on Age twenty,
Speaker 2: the China specific chip. What else do we need to
Speaker 2: know apart from that?
Speaker 3: Yeah, I mean the high level is here is. In
Speaker 3: some respects it was worse than people had feared, but
Speaker 3: in others it was much better than they had hoped.
Speaker 3: The China blow was arguably much worse than some analysts
Speaker 3: have projected. They were saying, you know, at the worst end,
Speaker 3: we're going to see seven billion dollars of revenue go away.
Speaker 3: Here in video said eight. But guess what still in
Speaker 3: line or that there or thereabouts with where consensus was,
Speaker 3: which means other parts of our business are doing well.
Speaker 3: There's black Well chip that they're able to ship to
Speaker 3: other places. Obviously they're getting supply, and that had, you know,
Speaker 3: kind of almost made up for some of the losses
Speaker 3: that we saw from China.
Speaker 2: There was a number fifty billion dollars of total addressable
Speaker 2: market in China loss. That's the way they've framed it.
Speaker 2: They've said that before. It was away from the numbers
Speaker 2: where the news was. I felt Jensen Wong opened the
Speaker 2: earnings call his portion addressing China head on that essentially
Speaker 2: that door is basically closed to them now in doing
Speaker 2: business there.
Speaker 3: What did he say, Yeah, I mean, this was in
Speaker 3: line with what he's been doing recently, where he's basically
Speaker 3: decided there's no point in messing around here, there's no
Speaker 3: point in working behind the scenes. I'm just going to
Speaker 3: go out there and lobby publicly. What he's telling the
Speaker 3: Trump administration in particular is, look, we if we lose China,
Speaker 3: if we're not allowed to play in China, we're going
Speaker 3: to be at risk competitively worldwide. It's not just a revenue,
Speaker 3: it's that because we're not in China, the Chinese companies
Speaker 3: are going to start to do it themselves. Thinking that
Speaker 3: China cannot do AI is wrong. You need to let
Speaker 3: us play there. That was his main message.
Speaker 2: He said that China will carry on with AI with
Speaker 2: or without Nvidia. In US newbergzine King, thank you very much.
Speaker 2: Let's get the investors reaction. Aoko Yoshioka, portfolio consulting director
Speaker 2: at Wealth Enhancement Group, joins us here on Bloomberg Technology.
Speaker 4: You listen to the call. Your main takeaways please.
Speaker 5: Sure, And you know, I think what Jensen said in
Speaker 5: terms of the AI era is here. I think that's
Speaker 5: the long term takeaway. You know, we didn't get answers
Speaker 5: on China. However, we know that demand is very strong
Speaker 5: and it's going to be strong for many years. There's
Speaker 5: still a lot of catalysts at Nvidia that's going to
Speaker 5: propel the stock for quite some time.
Speaker 2: I asked you on the show this morning. Well, the
Speaker 2: biggest question was we agreed it was China. Were all
Speaker 2: of your answers given and what you were looking for
Speaker 2: to understand the future of Nvidia's business in that market.
Speaker 5: No, I wish we had you know more details, but
Speaker 5: I think you know, Jensen and Collect gave as much
Speaker 5: as they could in regards to what is currently the
Speaker 5: situation with China, So there's not a whole lot we
Speaker 5: can do about it. I think we're all just going
Speaker 5: to have to wait and see whether or not they
Speaker 5: can come up with a cheaper Blackwell. Perhaps there's other
Speaker 5: ways that they can sell into the China market, but
Speaker 5: for now they're effectively closed to China, as they said
Speaker 5: during the call, So you know that's going to have
Speaker 5: to wait for more engineering and perhaps more news out
Speaker 5: of the administration.
Speaker 2: I want to bring Bloombergs in King back into the conversation.
Speaker 2: Ioko help us understand what Jensen Huang explained on the call.
Speaker 2: That they have a product or a category of products
Speaker 2: called Hopper, and as far as I understand the explanation,
Speaker 2: taking into account current US technology export controls, they have
Speaker 2: engineered that product, that chip to its lowest possible level
Speaker 2: of performance. What happened after that, Jensen essentially said it
Speaker 2: cannot get any less performant than that.
Speaker 3: Yeah, I mean the way to under standard is to
Speaker 3: go back. Hopper is a fundamental design that was the
Speaker 3: most important chip inarguably in this AI revolution. Rules came in,
Speaker 3: and these rules aren't like, you can't send this chip there.
Speaker 3: What they what they do is they set parameters, whether
Speaker 3: it's speed or memory or interface, all of these technical
Speaker 3: parameters get set in place and say you cannot have
Speaker 3: a chip that goes beyond these capabilities and send that
Speaker 3: to China. Page twenty was then a reaction to that, Hey,
Speaker 3: we'll make a chip that doesn't trigger these concerns, doesn't
Speaker 3: trigger these rules, and we'll send that. And then what's
Speaker 3: happened is basically the goalposts have been shifted again on
Speaker 3: in Vidia. So now they're at a point where we
Speaker 3: can't make this any worse and still have anything worth
Speaker 3: selling AOKO.
Speaker 2: The outlook for the fiscal second quarter is sales of
Speaker 2: forty five billion US dollars plus or minus two percent.
Speaker 2: But at the same time, in Nvidia told us that
Speaker 2: there was eight billion dollars in lost revenue opportunity relating
Speaker 2: to China, and to me, that seems like somewhere in
Speaker 2: their business in some geography, they found more demand and
Speaker 2: they sold more of something than they had initially anticipated.
Speaker 4: Have you been able to work that out?
Speaker 5: Absolutely? I mean, I think consensus numbers were closer to
Speaker 5: forty seven forty eight billion for two Q prior to
Speaker 5: the export van and so that the if you add
Speaker 5: back that eight billion that they said they lost for
Speaker 5: two Q, they'd be closer to fifty three billion. And
Speaker 5: so you know, the demand was very, very strong, and
Speaker 5: I think that continues, and I think we also got
Speaker 5: great information about margins in the second half. So really
Speaker 5: strong numbers and solid guidance out of Nvidia.
Speaker 2: Very shortly, Okay, we're going to speak to Jensen Wong
Speaker 2: live on this program.
Speaker 4: What's your question for Nvidia's CEO?
Speaker 5: Now, I think in terms of AI, just how things
Speaker 5: play out, especially on the enterprise. I think one of
Speaker 5: the things that he talked about is that enterprise AI,
Speaker 5: you know, is going to have to be back on prem.
Speaker 5: It's a little full circle for me when everything used
Speaker 5: to be on prem and we moved everything to the cloud,
Speaker 5: and now we're bringing back parts of it onto the
Speaker 5: premises as we need to protect those enterprise specific data.
Speaker 5: So I would love to understand how he views all
Speaker 5: of that playing out going forward.
Speaker 2: Okay, okay, a showcase, stay with us for just a moment.
Speaker 2: I'm looking at some of the after hours performance and
Speaker 2: video shares up more than four percent after ours highs.
Speaker 2: But then there are the other names, the other chip makers,
Speaker 2: those server assembly firms, super Micro, Dell. In the memory space, Micron,
Speaker 2: Qualcom is not as high as some of the others, Marvel,
Speaker 2: which got to shout out on the call from Nvidia,
Speaker 2: Blue Magazine King those after ours moves are interesting because
Speaker 2: basically the market is projecting a bit of confidence that
Speaker 2: all the picture stuff that Jensen's been talking about for
Speaker 2: some time appears intact, in other words, a commitment to
Speaker 2: continue investing in the infrastructure that supports AI.
Speaker 3: Yeah, I mean they want Uncle Jensen to tell everybody
Speaker 3: that everything's okay, and that's essentially what he tried to
Speaker 3: do today. But what is important to pick up on
Speaker 3: what our guest just said, Nvidia again said, guess what,
Speaker 3: these four or five big customers that are buying all
Speaker 3: of our gear, they're still fifty percent. So for the
Speaker 3: scenario that Jensen outlined to come true, which is that
Speaker 3: the enterprise is really using AI, that number has to
Speaker 3: go down. We have to see a large percentage go down.
Speaker 2: A Yoko Yoshoka, who's portfolio consulting director at Wealth Enhancement Group,
Speaker 2: we don't talk as often about Collect Cress, the CFO
Speaker 2: of Nvidia, but she spoke for the first twenty five
Speaker 2: minutes of that earning school, and throughout it she was
Speaker 2: going into great detail about all of Nvidia's customers away
Speaker 2: from the hyperscalers, all kinds of healthcare and industrial and
Speaker 2: robotics and consulting firms. But I don't quite understand that
Speaker 2: side of Nvidia's business, the software side, where they're not
Speaker 2: just selling GPUs to those that are building data centers.
Speaker 6: Do you.
Speaker 5: I think it's more the AI factories that they were
Speaker 5: talking about in conjunction with the software, you know. I
Speaker 5: think everybody needs to sort of pipe in and make
Speaker 5: sure they are getting AI in the manner in which
Speaker 5: they want to get it, whether it's through you know,
Speaker 5: the public cloud, which I think most enterprises are accessing
Speaker 5: some of that through that channel or other ways. And
Speaker 5: I think everybody's trying to explore how best to get
Speaker 5: the most out of AI from Nvidia.
Speaker 2: There was some discussion in King about recent announcements from
Speaker 2: the Middle East. Actually there wasn't a great lot of detail,
Speaker 2: particularly in how that relates to top line growth going forward.
Speaker 2: There was something that Jensen Wong said about what he's
Speaker 2: doing next week.
Speaker 4: He said, next.
Speaker 2: Week I will go to Europe, and in the context
Speaker 2: of further announcements, there's this expectation that Europe will start
Speaker 2: doing what others are doing, which is building out AI infrastructure.
Speaker 4: What did you make of.
Speaker 2: That and what was this sort of between the hints
Speaker 2: message I think that Jensen Wong was trying to share.
Speaker 3: Yeah, I mean the underlying message here is and this
Speaker 3: is a theme that he's been sort of forcing on
Speaker 3: us for a while, has been sovereign AI that a
Speaker 3: lot of companies, sorry, a lot of countries around the
Speaker 3: world want to keep their data within their borders and
Speaker 3: that to do the only way to do that is
Speaker 3: to build systems locally. We obviously saw the announcements in
Speaker 3: Saudi Arabia, in the United Arab Emirates, and so he
Speaker 3: got asked, Hey, when's this going to help You wouldn't
Speaker 3: answer that, but then he said, so will there be
Speaker 3: more announcements Jensen, and he was like smiling although we
Speaker 3: couldn't see him, and saying, I'm on my way to Europe.
Speaker 3: You can expect more announcements.
Speaker 2: Part of the question that the analysts pose to gen
Speaker 2: Some Wong was that analyst saying, historically, and remember, this
Speaker 2: company's been around a fair amount of time, there were
Speaker 2: moments on prior earnings calls where either Jensen Huang or
Speaker 2: collect Cress would give the streets something that was evidence
Speaker 2: that the big picture investment cycle was intact over a
Speaker 2: multi year horizon. Is how the analysts put it, that
Speaker 2: they could see what was happening would continue. What was
Speaker 2: your reaction to the response to that question?
Speaker 5: Sure, I mean, I think it was pretty positive in
Speaker 5: that their vision for how AI is going to impact
Speaker 5: every industry, every country is pretty spot on. It's been
Speaker 5: spot on. I think we're all trying to figure out
Speaker 5: how best to utilize it and what the parameters are.
Speaker 5: But it's impacting us in a true fundamental way, and
Speaker 5: I think that's something that NBDA has been talking about
Speaker 5: for quite some time.
Speaker 2: Jensen Wong talked about his relationship with President Trump, He
Speaker 2: said that he trusts the president, that the president has
Speaker 2: a plan and a vision. Whether you are on the
Speaker 2: cell side or the by side. When you listen to
Speaker 2: something like that, can you model for it the CEO
Speaker 2: of a technology company's relationship with the President of the
Speaker 2: United States and what that might mean for this company
Speaker 2: going forward.
Speaker 5: That's a really difficult thing to model for, especially when
Speaker 5: you know headlines can make changes pretty quickly. I think
Speaker 5: the one thing that you can rely on is at
Speaker 5: least you know, Jensen was talking about how manufacturing is
Speaker 5: going to be more high tech, more automated. We're not
Speaker 5: talking about, you know, low tech coming back, low manufacturing
Speaker 5: coming back to the United States. And I think that's
Speaker 5: the vision that we want to see going forward, especially
Speaker 5: in the United States.
Speaker 2: Just again the after hours trade and VideA higher four
Speaker 2: point three percent in late trading. Looking at other movers,
Speaker 2: super micro, Dell, some of the server assemblers also higher,
Speaker 2: in part because of that broader confidence of what this
Speaker 2: means for AI infrastructuring and King and video off.
Speaker 4: It's after ours highs though.
Speaker 2: You know, there was a moment in the earning school
Speaker 2: where people started to say, have we answered the China question.
Speaker 2: I think it's worth recapping the basics the outlook for
Speaker 2: the fiscal second quarter forty five billion dollars of revenue
Speaker 2: puss or minus two percent, but also this eight billion
Speaker 2: dollar figure of lost revenues because of the restrictions on
Speaker 2: h Chenney and China. What were the other numbers that
Speaker 2: we needed to look at.
Speaker 3: Yeah, I mean, as our guest mentioned, you know, sorry
Speaker 3: margins have been a concern, right, I mean, it's all
Speaker 3: a high class problem. But what the company was able
Speaker 3: to do today, which I'm sure help, was to say, look,
Speaker 3: despite all of the noise, despite all of the China,
Speaker 3: despite of everything else, we are still on course to
Speaker 3: get back to that five percent range later this year.
Speaker 3: And again, that is an astronomically high level for a
Speaker 3: company that is in this particular industry. And you know
Speaker 3: the fact that there were even concerns about it heading
Speaker 3: towards seventy percent is kind of arguably a joke anyway,
Speaker 3: But again, you know coll that Crest CFO was yet, Yeah,
Speaker 3: don't worry, We'll we'll get back there, and adding reassurance,
Speaker 3: adding back, you know, I think to that list of
Speaker 3: ticked off concerns that at Wall Street had about in Video.
Speaker 2: There is a longer term story about in Vidia's supply
Speaker 2: chain IOKO, and that's that it is like many others
Speaker 2: on shoring, they are working to assemble more of the
Speaker 2: server design, the complete package that goes into the data
Speaker 2: center here in America, insofar as in Video can control it.
Speaker 2: Jensen Wong spoke really positively about that. It's one of
Speaker 2: the good pieces of news. But the cost of doing
Speaker 2: business in this country is higher than other places in
Speaker 2: the world. How do you prepare for that as an investor?
Speaker 2: And when you think about videos quarterly earnings going forward?
Speaker 5: Sure, so, you know, I think he's especially called out
Speaker 5: a lot of partnerships too with TSMC, especially in Arizona
Speaker 5: and the build out that they're you know, doing out
Speaker 5: in Arizona. So I think you know that they're all
Speaker 5: talking about this and planning for this in a in
Speaker 5: a very methodical way, and you know, the costs are
Speaker 5: going to be the cost But I do think that again,
Speaker 5: we're bringing back higher tech, it's not going to be
Speaker 5: too low tech, and that is going to cost quite
Speaker 5: a bit and it's going to be difficult to do.
Speaker 5: But they're also generating just so much cash I mean
Speaker 5: to Ian's point. You know margins A's seventy five percent
Speaker 5: on You know, a company that's generating one hundred and
Speaker 5: twenty billion plus in revenues. You know, we're talking free
Speaker 5: cash flow, which is just astronomical for a company that
Speaker 5: was only generating twenty seven billion dollars in annual revenue
Speaker 5: just two years ago.
Speaker 2: Heyoka, Yoshioka, portfolio consulting director at Wealth Enhancement Group Bloomberg
Speaker 2: Z and King, who leads semiconductor coverage. That is the
Speaker 2: numbers you need to know and the reaction to Invideo's
Speaker 2: earnings report. Coming up, We'll continue our coverage of Video's
Speaker 2: earnings results and tune in for our conversation with CEO
Speaker 2: Jensen one that's coming up after a short break. This
Speaker 2: is Bloomberg Technology. Let's bring in in Video CEO Jensen one.
Speaker 2: Following the company's earnings and analysts call Jensen, thank you
Speaker 2: for your time here on Bloomberg Technology. You went into
Speaker 2: great detail about what's happening, particularly in China. I just
Speaker 2: wanted to go over something that I felt wasn't asked,
Speaker 2: which is fiscal second quarter sales forty five billion dollars
Speaker 2: plus or minus two percent eight billion dollars of lost
Speaker 2: revenue opportunity relating to China in age twenty. It seems
Speaker 2: as if you made up somewhere some demand for a
Speaker 2: different product, or from a different geography, or from a
Speaker 2: different corner of the market.
Speaker 4: What was that.
Speaker 6: Well, we got a.
Speaker 7: Whole bunch of engines firing right now. The biggest one,
Speaker 7: of course, is the reasoning AI inference. The demand is
Speaker 7: just off the charts. You see the popularity of all
Speaker 7: these AI services now, Chad, GBT, Gemini, you know, so
Speaker 7: on and so forth, GROC. I mean, they're just doing
Speaker 7: incredibly well across the board, and all of the APIs
Speaker 7: that they serve out and all the agentic AI services
Speaker 7: that are built on top of them, they're all doing
Speaker 7: incredibly well. I think that there's just a giant breakthrough
Speaker 7: in AI's capability, and inferencing has just become a giant workload. Second,
Speaker 7: people realize that Blackwell is just a home run Envy
Speaker 7: Link seventy two is a home run architecture. We designed
Speaker 7: it to be a thinking machine, a reasoning AIS system,
Speaker 7: and I think people now the confluence of the breakthrough
Speaker 7: and reasoning AI and the availability you know, now the
Speaker 7: emergence of Grace Blackwell and Velink seventy two perfect timing.
Speaker 6: I think that that's at the core a big part
Speaker 6: of it.
Speaker 7: And the second part of it is that our supply
Speaker 7: chain is growing and we're really ramping it up, and
Speaker 7: they're doing fantastically for us, and so all of these
Speaker 7: things are all coming together.
Speaker 2: And so it is fair to say that some of
Speaker 2: that additional supply on Blackwell and the demand for black
Speaker 2: Bell kind of made up for the opportunity lost in China,
Speaker 2: at least in the outlook for this current period.
Speaker 6: Yeah, I guess so.
Speaker 7: But you know, you just can't you can't underestimate the
Speaker 7: importance of the China market. This is the second largest
Speaker 7: AI market, This is the home of the world's largest
Speaker 7: population of AI researchers. And we want all of the
Speaker 7: world's AI researchers and all of the world's developers to
Speaker 7: be building on American stacks. And so, you know, irrespective
Speaker 7: of the nearer term revenue success that we have, we
Speaker 7: can't ignore the fact that the Chinese market is very important.
Speaker 2: You explained again in some detail that at least in
Speaker 2: the Hopper architecture, you have engineered down to the lowest
Speaker 2: spec possible. It's not possible to do anything different with
Speaker 2: Hopper for the Chinese market. But in your consideration for
Speaker 2: a different architecture or a chip for the Chinese market,
Speaker 2: is that what we're talking about, a new design or
Speaker 2: new class? And have you made that proposal to the
Speaker 2: administration just designing from the ground up a new chip.
Speaker 6: We're still thinking through that.
Speaker 7: They're just the limitations are quite quite stringent, quite limited,
Speaker 7: if you will.
Speaker 6: H twenty is.
Speaker 7: You know, as far down as we could take a Hopper,
Speaker 7: we don't know how to make it even less. And
Speaker 7: so that's really the limit. But so there aren't there aren't.
Speaker 7: You know, the limitations are quite stringent, so we have
Speaker 7: we have to really think through it. Whatever we make
Speaker 7: ultimately has to add value to the market. And so
Speaker 7: it's it's a really tight rope because because the Chinese
Speaker 7: competitors have evolved and advanced greatly over the last year,
Speaker 7: like everybody else, they're you know, doubling, quadrupling their capabilities
Speaker 7: every year, and the volume is increasing substantially. And remember
Speaker 7: these are data center chips. They don't have to be small.
Speaker 7: They could be quite large and and and you know,
Speaker 7: they without American technology, the availability of Chinese technology will
Speaker 7: fill the market. And so you know, we whatever we
Speaker 7: offer has to at least at least be competitive and
Speaker 7: has to add value to the market.
Speaker 4: Tensen.
Speaker 2: Does Huawei have an AI accelerator or a GPU that
Speaker 2: is performance is hah twenty or is performance of other
Speaker 2: classes of GPU that you.
Speaker 7: Make Huawei's technology based on based on our best understanding
Speaker 7: at the moment, uh, and we have a lot of
Speaker 7: ground truth there is probably comparable to an age two
Speaker 7: hundred and so they're they're they've been moving quite fast
Speaker 7: and and they've also offered uh this news system called
Speaker 7: cloud Matrix. UH that is that is scales up to
Speaker 7: even a larger system than our latest generation Grace Blackwell.
Speaker 7: And so so they're Huawei, as you know, is a
Speaker 7: formidable technology company, and they're not sitting still and they
Speaker 7: look for ways to look for ways to compete, and
Speaker 7: they're quite formidable.
Speaker 2: With that in mind, you've kind of explained the landscape
Speaker 2: now and Videa's ability to operate in China. I mean,
Speaker 2: you and I this year alone have already discussed the
Speaker 2: idea that they're they're fifty percent of the world's AI
Speaker 2: research is in or from China. But are you having
Speaker 2: a sense of the vacuum created that those big names
Speaker 2: I think about Tencent or Ali Baba or bayd that
Speaker 2: were buyers of age twenty that they've already pivoted and
Speaker 2: turned to the offering from Huawei because of the the
Speaker 2: policy that is in place.
Speaker 7: Yeah, they have no choice, but to you know, one
Speaker 7: of our one of the one of the challenges of
Speaker 7: the changing regulations is the ability for markets to trust
Speaker 7: the Nvidia and and ultimately American platforms. And so so
Speaker 7: it's prudent, I think for the Chinese customers UH to
Speaker 7: make sure that they they developed their stack on Huawei
Speaker 7: and because it's hard to rely on American technology at
Speaker 7: this point. And so that's one of the that's one
Speaker 7: of the the unfortunate, unfortunate parts of changing policies. But anyhow,
Speaker 7: you know, I have every confidence that that if able
Speaker 7: to compete, American companies will compete.
Speaker 6: This is in to HUH.
Speaker 7: To write off American technology companies is not smart.
Speaker 6: This is this is the home of of of.
Speaker 7: Some of the brightest computer scientists in the world. American
Speaker 7: companies are incredibly competitive. We just have to have the
Speaker 7: confidence to go compete, and if we have the confidence
Speaker 7: to compete, we will win.
Speaker 2: You said during the earning school that you trust President
Speaker 2: Trump and that the president has a vision.
Speaker 4: And a plan.
Speaker 2: Could I ask if you've talked to him about that
Speaker 2: plan and if it includes coordinating with Nvidia on policy
Speaker 2: adjustment that relates to changes in technology export controls.
Speaker 7: Well, obviously I don't know all of his ideas, but
Speaker 7: let me tell you about two that are incredible. The
Speaker 7: first one is utterly visionary, the idea of tariffs being
Speaker 7: a pillar of a bold vision to reindustrialize to onshore
Speaker 7: manufacturing and motivate the world to invest in the United States.
Speaker 7: And it's just an incredible vision. I think this is
Speaker 7: going to be a transformative idea for the next century
Speaker 7: for us. We're all in on the idea where we're
Speaker 7: setting up plants and encouraging our partners from around the
Speaker 7: world to invest the United States, and we have a
Speaker 7: lot of stuff going on, and so I'm very.
Speaker 6: Excited about that.
Speaker 7: The second major idea is to re send the AI
Speaker 7: diffusion Rule, recognizing that this isn't about limiting American technology,
Speaker 7: but this is about accelerating American stacks around the world
Speaker 7: to make sure that before it's too late, that the
Speaker 7: world builds on American stacks during this extraordinary time the
Speaker 7: AI era, and so these two initiatives are completely visionary
Speaker 7: and it's going to be transformative for America.
Speaker 4: Jensen.
Speaker 2: In the time that you and I have been on
Speaker 2: having this conversation, some news is broken from US Secretary
Speaker 2: of State Rubio who has said that the US will
Speaker 2: begin revoking some Chinese student visa. What I wanted to
Speaker 2: ask you is that with US government limits on foreign
Speaker 2: student visas, how does that impact a company like Nvidia.
Speaker 2: I think about the size but also composition of your
Speaker 2: engineering talent here in California and elsewhere in the United States.
Speaker 7: I believe the administration still feels very strongly about about
Speaker 7: the incredible importance of immigration. Look, I'm an immigrant. I
Speaker 7: know many immigrants that came came to United States to
Speaker 7: to build a great life, and many of us, many
Speaker 7: of us have contributed greatly to the technology industry and
Speaker 7: and uh in the United States. I believe that that's
Speaker 7: going to have to continue.
Speaker 6: Uh.
Speaker 7: Remember, remember, you know, people from all of the world
Speaker 7: want to come to United States. This is just such
Speaker 7: an extraordinary country with such incredible opportunities.
Speaker 6: We want the brightest to come here.
Speaker 7: We don't want we don't want others to you know,
Speaker 7: we we don't want everybody to be able to come here,
Speaker 7: and there should be there should be rules, but nonetheless
Speaker 7: for the ones that really can make a contribution, want
Speaker 7: to make a difference, and we want to make it
Speaker 7: possible for them to come here and bring their great ideas,
Speaker 7: bring their great intellect and help us build in a
Speaker 7: great America. And so I think I think the administration
Speaker 7: is all in on that, and I don't think anything
Speaker 7: that they've said changes that.
Speaker 4: Jensen.
Speaker 2: I surveyed our Bloomberg Technology audience around the world for
Speaker 2: questions for you, and I think the most common question
Speaker 2: is understanding who Nvidia's customers are away from the hyperscalers,
Speaker 2: but actually many questions about Elon Inc. And whether Tesla
Speaker 2: and Xai and Aggregate might actually be one of the
Speaker 2: biggest customers you have. You think about not just the
Speaker 2: data center chips, but this chip specific for optimists or
Speaker 2: in the cars, the omniverse component.
Speaker 4: Could you speak a little about that.
Speaker 6: We do.
Speaker 7: We do a lot of business with Tesla and Xai,
Speaker 7: of Elons. As you know, it's just an extraordinary engineer.
Speaker 7: And I love working with him. We've built some amazing
Speaker 7: computers together. We're going to build many more computers together.
Speaker 7: And and uh, the work that he's doing in Grock,
Speaker 7: his self driving car, his optimists, these are these are
Speaker 7: all every single one of them world class, every single
Speaker 7: one of them revolutionary, every single one of them are
Speaker 7: going to be gigantic opportunities.
Speaker 6: And and we're delighted.
Speaker 7: I'm delighted to be working with him on that. And
Speaker 7: and so I I think the uh, the the optimist
Speaker 7: opportunities just right around the corner. It's very likely that
Speaker 7: human robots are are going to be robots that we
Speaker 7: can deploy into the world relatively easily. And uh, this
Speaker 7: is the first robot that really has a chance to
Speaker 7: achieve the high volume and technology scale necessary to advance technology.
Speaker 7: And and so I think this is likely to be
Speaker 7: the next multi trillion dollar industry.
Speaker 6: I'm very excited for him.
Speaker 4: Densen.
Speaker 2: Let's end by talking about Europe. You alluded to a
Speaker 2: trip you're taking next week. It sounds as if the
Speaker 2: infrastructure build out in Europe is coming. Where will you
Speaker 2: be visiting and who we be speaking with.
Speaker 7: Well, I'm going to leave the WHO as a surprise
Speaker 7: for all of you, but but I'll be seeing lots
Speaker 7: of heads of states, and I'll be in France and
Speaker 7: UK and Germany and Belgium, and and I think that
Speaker 7: that the the it's very clear now that every under
Speaker 7: every country recognizes that artificial intelligence, like electricity, like internet,
Speaker 7: like communications, is part of a national infrastructure. No, no
Speaker 7: society could do without intelligence, as you know, and and
Speaker 7: there's an awakening that every country has to has to
Speaker 7: take some initiative to ensure that that their country and
Speaker 7: their society has access to artificial intelligence. And so we're
Speaker 7: really delighted to be able to work with you know,
Speaker 7: work with the European countries to bring AI infrastructure to
Speaker 7: them and work with them to build AI factories. There's
Speaker 7: an untem number of AI factory projects in discussion and
Speaker 7: development and and so so I'm really excited to make
Speaker 7: this trip.
Speaker 6: We're going to be all over Europe.
Speaker 4: Nvidia, Ce Jensen Wang, thank you, thank you.
Speaker 6: Good to see you.
Speaker 4: Okay, let's get reaction from the analyst.
Speaker 2: S Gilderia Da Davidson, Managing director joins us A gil
Speaker 2: Whether it's to what you just heard Jensen Wog say,
Speaker 2: or is it the numbers that you saw? What is
Speaker 2: your big takeaway of the last couple of hours.
Speaker 8: That add this result to a long list of accomplishments
Speaker 8: from Nvidia. The fact that they can exceed expectations for
Speaker 8: the quarter and guy for sequential revenue growth while one
Speaker 8: of their biggest markets, their second biggest market is really
Speaker 8: frozen is very impressive and that's why the stocks up
Speaker 8: after hours. This isn't as bad as it could have been,
Speaker 8: considering the fact they had to stop selling H twenties
Speaker 8: on April ninth into China and had to write off
Speaker 8: a substantial amount of inventory, So that's a significant accomplishment.
Speaker 8: The other takeaway, though, is the company's been very careful
Speaker 8: in how it's communicated this message. But let me make
Speaker 8: it a little bit more clear. We are currently frozen
Speaker 8: out of China, and if we remain frozen out of China,
Speaker 8: that's going to have a material negative impact on the
Speaker 8: results of the company, which is to say, they probably
Speaker 8: will not be able to accomplish the goals that the
Speaker 8: consensus estimates have for them for next year. If they
Speaker 8: can get back into China, so they are actively lobbying
Speaker 8: the administration, the US administration, to find a way to
Speaker 8: be able to return to the Chinese market, and that
Speaker 8: seems to still be a negotiation. That's why the company
Speaker 8: is so effusive in talking about the administration. That's why
Speaker 8: the company is so clear about their reasoning for why
Speaker 8: they should be able to sell in the China and
Speaker 8: how negative it would be if they are not able
Speaker 8: to sell in the China.
Speaker 4: Go stay with us.
Speaker 2: I want to bring in Bloomberg Intelligence Senior analyst Colenjen
Speaker 2: Sabani to the conversation. You've published your REACT document, you
Speaker 2: have your model and your numbers, but you and I
Speaker 2: both agreed a big question was where did the makeup
Speaker 2: come from?
Speaker 4: On the demand side?
Speaker 2: Where did they sell to Noting the eight billion dollar
Speaker 2: lost revenue opportunity out of China.
Speaker 9: Yeah, if you unpack the numbers and put the age
Speaker 9: twenty impact aside, this would have been a blown out quarter.
Speaker 4: But there would have.
Speaker 9: Been the result and the outlook by seven percent and
Speaker 9: ten percent, which they have not done in the last
Speaker 9: five quarters. What this means is based on over Matt
Speaker 9: that black Well did three billion above expectations. And remember
Speaker 9: Blackwell expectations were not brought down both in one Q
Speaker 9: two Q. That's significantly important. Having said that China loss
Speaker 9: is a real revenue loss, but relatively so is it
Speaker 9: closed for most of its competitors.
Speaker 4: I asked Jensen Wang.
Speaker 2: Did Blackwell make up the shortfall? He said, I guess.
Speaker 2: So what's next? What happens for Nvidia in that key
Speaker 2: market of China.
Speaker 9: I mean, the one thing we were expecting them is
Speaker 9: to announce the new chip or any clarity around that.
Speaker 9: So I think that was the only negative out of
Speaker 9: today's call that we didn't get that, so might create
Speaker 9: some room for uncertainty and you know, rumors or speculation
Speaker 9: when it comes to numbers going forward. But the other
Speaker 9: key important thing we saw today was that gross margin
Speaker 9: again taking the H twenty van out came in better,
Speaker 9: which means the Blackwell yields and cost improvements are running
Speaker 9: better than we anticipated.
Speaker 2: Kill Larry a final word to you, what happens next
Speaker 2: for Nvidia?
Speaker 8: We need to get clarity on what are the restrictions
Speaker 8: of selling chips into China, and given those restrictions, what
Speaker 8: is the product that Nvidia can sell into that market
Speaker 8: and how does it stack up against the Wahwei product.
Speaker 8: I think you got mister Wang to acknowledge that the
Speaker 8: Whawei product is now caught up to the Age two hundred.
Speaker 8: So if all in Nvidia can introduce into that market
Speaker 8: is a product that's not as good as the Age
Speaker 8: two hundred, they probably have lost a significant part of
Speaker 8: that market. We need to get clarity on that. I
Speaker 8: would expect us to get that clarity in the next
Speaker 8: few weeks.
Speaker 2: And Gloria Da Davidson, Managing Director, along with Bloomberg Intelligence
Speaker 2: Senior Analyst Congen Sabani, thanks to you both. That does
Speaker 2: it for this special edition of Bloomberg Technology. Don't forget
Speaker 2: to check out our podcasts. You can find it on
Speaker 2: the terminal as well as online on Apple, Spotify, and
Speaker 2: Ihea From San Francisco, this is Bloomberg Technology.