Jensen Huang: The Future of AI Lies in 'Reasoning'—Key to Significant Chip Cost Reduction!

NVIDIA CEO Jensen Huang has recently stated that the future of artificial intelligence (AI) lies in services capable of "reasoning." However, achieving this vision requires significantly reducing computation costs. On October 9, Arm published an audio conversation between its CEO, Rene Haas, and Huang, covering topics such as Huang's entrepreneurial journey, the future of AI, and NVIDIA's unique corporate culture.

Before joining Arm in 2013, Haas worked at NVIDIA for seven years, eventually becoming vice president and general manager of computing products, marking him as a long-time colleague of Huang's. Notably, NVIDIA has previously attempted to acquire Arm.

In the podcast, Huang shared with Haas that the next generation of tools will be able to respond to human inquiries by processing hundreds or thousands of steps and reflecting on their conclusions. He emphasized that this capability will transform future software, setting it apart from the current uses of AI, such as OpenAI's ChatGPT. Huang stated that NVIDIA aims to enhance chip performance by two to three times each year without increasing costs or energy consumption, laying the groundwork for these advancements. This evolution is poised to change how AI systems process reasoning, allowing them to identify patterns and draw reasonable conclusions from data.

"We have the potential to drastically reduce the cost of intelligence, and we all recognize the value of this," Huang remarked. "If we can significantly lower costs, we can enable reasoning capabilities in our analyses."

Current data shows that NVIDIA holds over 90% of the AI chip market share. Last week, Huang reported that demand for the company's next-generation AI chip, Blackwell, is “insane.” In March, he mentioned that the price range for Blackwell is between $30,000 and $40,000. However, NVIDIA prefers to bundle these chips with networking equipment and software services, rather than selling GPUs separately.

As a result of these factors, NVIDIA’s stock has increased over 10% this month, reaching $133 and nearing its previous record of $140. The company’s market capitalization has surpassed Microsoft, making it the second most valuable publicly traded company in the world after Apple. Since the beginning of the year, NVIDIA's stock has surged by 170%, propelling Huang closer to the top ten on the billionaire list.

However, NVIDIA is also facing threats from a "diminished market control," as some major clients are developing in-house alternatives. Moreover, key rival AMD plans to unveil its latest AI products at an upcoming event, further intensifying the competitive landscape.