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Bubble? What bubble? Nvidia CEO Jensen Huang dismissed fretful talk about massive AI investment on Wednesday, extolling the benefits of AI for a wide variety of companies—from startups to big firms like Meta Platforms. Of course, the biggest beneficiary of the AI transformation is Nvidia itself, whose stranglehold on the AI chip market is turning it into a tech version of the U.S. Mint. On Wednesday, Nvidia reported 62% higher revenue of $57 billion for the October quarter, a few billion dollars higher than it had projected. What’s notable is that Nvidia produced that growth even as its business selling advanced AI chips to China evaporated thanks to U.S. export controls.
In fact, if you leave China out of the equation, Nvidia’s revenues everywhere else in the world doubled in the quarter, which is extraordinary growth given how much Nvidia’s business had already mushroomed in the past couple of years. Revenue in the latest quarter, for instance, was nearly 10 times what Nvidia reported for the same quarter three years ago. And every signal suggests Nvidia’s growth will continue. Several big tech companies—such as Meta, Microsoft, Google and Amazon—have said they are continuing to increase their spending on AI-related capital expenditures, much of which goes to Nvidia’s chips. Nvidia Chief Financial Officer Colette Kress told analysts Wednesday that Nvidia may do more than the $500 billion in sales it recently projected for the two years ending in December 2026. That number compares with just $130 billion it reported in revenue in the year to January 2025.
Investors seem happy. Nvidia stock, which fell 12% in the past couple of weeks amid rising jitters about AI, rose 5% in after-hours trading. No one can blame Huang and Kress for their ebullience about the growth, but plenty of questions remain. A host of competitors is trying to eat into Nvidia’s market share, most obviously Google, whose TPU AI chips appear to be gaining ground with customers, and Nvidia’s distant No. 2 rival, AMD (see our in-depth look at AMD today). Huang did his best to put to rest any questions about Nvidia’s competition, repeatedly emphasizing in unashamedly self-congratulatory terms Nvidia’s superiority and wide array of customers.
Another question is why Nvidia keeps striking what appear to be circular deals, investing in companies that agree to buy its chips—including one with Anthropic announced on Tuesday. Huang unabashedly told analysts Nvidia was “using cash to fund our growth.” The deal with Anthropic meant the AI firm would start to train its models on Nvidia chips for the first time, having previously used chips from Amazon and Google. Huang makes a reasonable point, but there’s no getting around the reality that helping your buyers fund their purchases isn’t the most sustainable way to expand your market. If Huang is right about AI, though, these are minor worries in the long run. Investors have to hope he is.
Behind Adobe’s Semrush Purchase
Small software firms are on sale—and Adobe is taking advantage of it to expand its business portfolio. Adobe’s $1.9 billion purchase of Semrush, announced on Wednesday, looks like a well-timed deal—if you’re confident in Semrush’s future.
Semrush helps companies market themselves online. It’s particularly well known for advising companies in the arcane world of search engine optimization—figuring out how to elevate a company’s name in online searches. That business looks endangered as consumers spend more time looking for information on AI chatbots and less time on searches. As a result, companies are focusing more on ensuring their brands show up in AI chatbot results in a good light.
While Semrush is trying to expand its business into that new world, its revenue growth has slowed this year, to 15% in the just-reported third quarter, from 22% in the first quarter. And its stock price has fallen at the same time. The stock closed at $6.76 on Tuesday, down from a high of $18.37 in February.
Adobe is offering $12 a share for Semrush, which isn’t a bad deal for its shareholders. Despite that February blip, the stock has traded below $12 for most of the past few years. For Adobe, the true cost is lower than the $1.9 billion headline price, as Semrush had $276 million in cash as of Sept. 30. For all concerned, things could have been worse.
In Other News
• OpenAI and Target announced plans to make the retail giant’s app available through ChatGPT’s new app feature on Wednesday, marking the latest tie-up between the AI startup and a large retailer as OpenAI looks to help users with more shopping-related tasks.
• Former Harvard University President Larry Summers has resigned from OpenAI’s board of directors following a congressional committee’s release of emails showing personal correspondence between him and convicted sex offender Jeffrey Epstein. That exchange continued until shortly before Epstein’s arrest in 2019, according to a statement from OpenAI’s board.
• Elon Musk’s xAI and the Saudi government–owned company Humain are jointly developing a data center in Saudi Arabia, the companies said on Wednesday.
• Brookfield, one of the largest infrastructure investors, said it would acquire up to $100 billion in energy, land, data center and computing assets used to power AI.
Today on The Information’s TITV
Check out our latest episode of TITV in which Akash speaks with General Catalyst about their Customer Value Fund.
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