Prime Highlight:
- Jensen Huang said heavy AI infrastructure spending is justified and will continue as companies expect higher future revenues.
- He called the AI boom the “largest infrastructure buildout in human history,” fueled by strong demand for computing power.
Key Facts:
- Analysts estimate Meta, Amazon, Google, and Microsoft may spend around $660 billionon AI infrastructure this year.
- Nvidia shares closed nearly 8% higherafter Huang’s comments, while reactions to AI spending varied among big tech stocks.
Background:
Nvidia Chief Executive Officer Jensen Huang said the tech industry’s massive spending on artificial intelligence infrastructure is reasonable and likely to continue, as companies prepare for higher future revenues. Speaking on CNBC’s Halftime Report, Huang said strong demand for computing power is pushing companies to invest heavily in AI systems.
Huang explained that major technology firms are increasing capital expenditure because their cash flows are expected to rise. Nvidia shares reacted positively to his remarks and closed nearly 8% higher on Friday.
His comments followed recent earnings reports from Nvidia’s largest customers, including Meta, Amazon, Google, and Microsoft. Over the past two weeks, these companies told investors they plan to sharply raise spending on AI infrastructure. Analysts estimate that these hyperscalers could together spend around $660 billion this year, with a large share going toward Nvidia’s chips.
Market reaction to the spending plans was mixed. Meta and Alphabet shares rose, while Amazon and Microsoft stocks faced pressure due to concerns over higher costs.
Huang described the current phase as the “largest infrastructure buildout in human history,” driven by intense demand for computing power. He said companies are using AI to improve products and generate more revenue. Meta is shifting from CPU-based recommendation systems to generative AI models, while Amazon Web Services and Microsoft are using Nvidia-powered AI to enhance retail suggestions and enterprise software.
Huang also praised AI firms OpenAI and Anthropic, both major users of Nvidia chips. He noted that even older Nvidia processors, such as the A100, remain in full use.
“As long as AI continues to make money, companies will keep investing,” Huang said.
