A year and change ago, as Nvidia ascended to become the world’s most valuable company. In the just-completed second quarter of 2023, it delivered a record revenue of $46.7 billion. That’s a 56% jump from the same time last year. Underpinning the company’s stellar financials is its surging data center business. This segment earned $41.1 billion in revenue, an outstanding 56% jump from last year.
Nvidia did record revenue records this quarter. They announced a record net income of $26.4 billion, a staggering 59% jump over last year’s totals. Nvidia’s triple as its profit center underlines the company’s undeniable dominance within technology. More fundamentally, it is the backbone of the current AI hype cycle.
Nvidia’s success comes amid complex international dynamics. The company has received permission to sell semiconductor chips to China, though this transaction incurs a 15% export tax payable to the U.S. Treasury. Notably the Chinese government has, on paper at least, made it illegal for local enterprises to use Nvidia chips, further muddying potential sales with the nation.
On the China front, earlier this month, Nvidia stopped production of its new production H20 chip, which had been targeted for the Chinese market. The company sold no H20 chips to Chinese customers during the last quarter. It nonetheless completed a much more significant and successful sale of $650 million of H20 chips to an undisclosed customer outside of China.
Looking forward, Nvidia expects its guidance for the third quarter to move by plus or minus 2%. Note that this projection excludes any hypothetical H2O shipments to China. The combination of today’s geopolitical landscape and regulatory hurdles crack down on this exclusion.
Despite the negative headlines, Jensen Huang, Nvidia’s CEO, reaffirmed his company’s stance on environmental awareness, innovation, and leadership in rapidly expanding AI technology.
“Blackwell is the AI platform the world has been waiting for,” – Jensen Huang
As Huang continued about the cutthroat world of artificial intelligence,
“The AI race is on, and Blackwell is the platform at its center.”
Nvidia wants to explore the new realities of selling abroad and the speed of innovation. If so, their decisions will determine the future of not just artificial intelligence, but semiconductor industries as well.
