00:00NVIDIA forecast quarterly revenue above Wall Street estimates on Wednesday,
00:04but its outlook did little to ease investors' concerns about the company's long-term dominance in the AI chip market.
00:11Shares of the world's most valuable company fell 1.2% in extended trading.
00:16As of Tuesdays, close NVIDIA has gained just 14.2% so far this year, while AMD and Intel have
00:23more than double.
00:26The company expects third-quarter revenue of $108 billion, plus or minus 2%,
00:31compared with Analyst's average estimate of $104.19 billion, according to data compiled by LSEG.
00:39NVIDIA said it did not assume any data-centered chip sales from China in its outlook.
00:45Results from NVIDIA, one of the world's most valuable firms, are considered a bellwether for the AI market,
00:50as its chips power most of the major data centers and advanced AI models globally.
00:56The report comes weeks after companies including Microsoft and Meta,
01:00two of NVIDIA's biggest customers, reinforced expectations that big tech would spend more than $730 billion on AI infrastructure this
01:08year,
01:09an unprecedented sum that marks a big step up from last year's $400 billion outlay.
01:14An increasing share of tech companies slated spending is now,
01:17however, going towards in-house cheap efforts that aim to reduce their reliance on NVIDIA's costly and supply-constrained processes.
01:25Scrutiny has also mounted on NVIDIA's role in the AI boom's complex financing ecosystem,
01:31after it agreed to guarantee some deals under a new tie-up with six major financial institutions
01:36that aims to raise more than $500 billion for AI infrastructure.
01:42As AI is increasingly used to automate tasks and answer queries,
01:46NVIDIA's graphics processes face growing competition from central processes and custom chips
01:52that are better suited to handle that process, known as inference.
01:56Rivals Intel and AMD are also targeting the inference market,
02:00and several Chinese firms, including Baidu, already produce their own chips for such tasks,
02:05and NVIDIA has taken notice.
02:07The company's dominance as the AI market leader was reinforced earlier this month,
02:12when SpaceAX CEO Elon Musk said the rocket firm would exclusively use NVIDIA's hardware.
02:18NVIDIA has said the revenue opportunity for its AI chips could exceed $1 trillion through 2027,
02:25doubling from the $500 billion opportunity through 2026 that NVIDIA cited for its Blackwell and Rubin chips.
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