Q1 2022 NVIDIA Corp Earnings Call
Projects to enhance vehicle performance and safety.
It's a true datacenter around meals.
Outlet, which targets automakers 2025 of models will follow the Nvidia drive Oren associated which delivers 254 talks that has been selected by leading vehicle makers for production timelines starting next year.
The Nvidia drive platform has achieved global adoption across the transportation industry are automotive design win pipeline now exceeds 8 billion for fiscal 2027.
Most recently Volvo cars announced that it will use Nvidia drive Orange building on our next great momentum with some of the largest automakers, including Mercedes Benz SAIC and Hyundai Motor Group.
And Barbara Taxis, we added GM cruise for the growing number of companies adopting the Nvidia drive platform, which includes <unk>.
Shawn Jukes and D D.
<unk> also had a great traction with new energy vehicle makers. Our latest wins include fair day future our auto I Am Motors, and then fast which joined previously announced wins with SAIC Neo ex Tang and they audit.
In trucking Navistar is partnered with 2 simple and selecting Nvidia drive for autonomous driving joining.
Joining previously announced for the autonomous solutions and class.
Nvidia is helping to revolutionize the transportation industry are full stack software defined Avi of AI cockpit platform spans silicon systems software and AI datacenter infrastructure, enabling over the air upgrades to enhance safety of majority of driving.
Throughout the vehicles lifetime.
Starting with our lead partner of Mercedes Benz Nvidia drive can transform the automotive industry with amazing technology delivered through a new software and services business models.
Moving to datacenter.
Revenue topped 2 billion for the first time growing 8% sequentially and up 79% from the year ago quarter, which did not include melon ox hyperscale customers, but our growth this quarter as they built infrastructure to commercialize AI in their services.
In addition, cloud providers have adopted the E 100 to support growing demand for AI from enterprises startups and research organizations.
Customers are deployed and videos, a 100 and <unk> platforms to train deep neural networks with rising computational intensity led by 2 of the fastest growing areas of AI natural language understanding and day to day.
Deep recommendation.
In March <unk>.
From a cloud platform announced general availability of the E 100, with early customers, including square for cash application and alphabet to keep mind. The E..100 is deployed across all major Hyperscale and cloud service providers globally, and we see strengthening demand in the coming.
Quarters.
Every industry is becoming a technology industry and accelerating investments in AI infrastructure, both through the cloud and on premise or vertical industries grew both sequentially and year on year led by consumer Internet companies. For example may there is leading internet.
All of the company in Korea, and Japan is training giant AI language models at scale on Gtx Super proud to pioneer new services across E Commerce search entertainment and payment applications.
We continue to gain traction in France, with Hyperscale and vertical industry customers across a broadening portfolio of GPS we had record shipments of Gpus for inference inference growth is driving not just the T for which was up strongly in the quarter, but also.
The Universal a 100 tensor core GPU as well as for new Ampere architecture based a 10 and 830 G. P is all excellent training as well as Jen from too.
Customers are increasingly migrating from Cpus to Gpus for AI inference for 2 chief reasons first Gpus can better keep up with the exponential growth in the size and the complexity of deep narrow networks and respond with the required low latency.
April's ml, Perth, AI inference benchmark Nvidia achieved the top results across every category spending Kim Peter vision medical imaging of the data systems speech recognition and natural language processing.
Second and videos full stack inference platform, including Triton's of inference server software simplifies the complexity of deploying AI applications by supporting models for all major frameworks and optimizing for different crude types, including batch real time streaming.
If I kind of supported by several partners in their cloud services, including Amazon, Google, Microsoft and Tencent.
Examples of how customers use Nvidia inference platform include Microsoft for grammar checking in office, the United States Postal service for all type of package analytics T mobile for customer service and trust for image search and <unk> health care for heart disease detect.
Chip.
We also had strong.
Results with non auction networking products like our compute business strong growth was driven by hyperscale customers across both Ethernet and Infiniband Mitch.
<unk> key design wins and proof of concept trials for the Nvidia Bluefield to GPU with cloud service providers and consumer Internet companies. We also unveiled bluefield 3 the first D. P of built for AI and accelerated computing with support from Vmware net out.
Splunk cloud flow and others Bluefield 3 is the industry's first 400 gig GPU and delivers the equivalent of data center services of up to 300 should be of course, it transforms traditional server infrastructure into zero trust environment in which every use.
Or is authenticated by Offloading and isolating datacenter services for business applications.
Brookfield 3 of our GPU roadmap will deliver an unrivaled 100 ex performance increase over a 3 year period.
As we look back at the first full year since closing the <unk> acquisition, we are extremely pleased with how the business performs.
It has not only exceeded our financial projections, but it has just been instrumental in key new platforms like the <unk> Super pod and of the field GPU, enabling our datacenter scale computing strategy.
In April we held our largest ever GPU technology conference with more than 200000 registrants from 195 countries jumped since came out had over 14 million views at GTC, We announced our first datacenter C. P.
Nvidia Grace targeted at Prost.
Processing massive next generation AI models with trillions of parameters.
<unk> based processors will enable 10 extra performance and energy efficiency of todays fastest servers with Grace Nvidia has a 3 chip strategy for GPU deep you and now she P O S.
The Swiss National Supercomputing Center in the U S Department of Energy's Lasalle, Los Alamos National Laboratory are the first to announce plans to build great power supercomputers Grace who will be available in early 2023.
G. T C is first and availability on the Nvidia GPU cloud registered developers can choose a pre trade model and adapt it to fit their specific needs using Nvidia Tao our transfer learning software calif itunes for model with customers.
1 small dataset to get models of accustomed for us without the cost time and massive datasets required to train a neural net.
A neural network from scratch.
<unk> model is optimized and ready for day point.
Users can integrate it with of Nvidia application framework for exposures for.
For example, the Nvidia Jarvis framework for interactive conversational AI is now generally available and used by customers such as T mobile and stout and Nvidia Marlin framework for deep breath of India is in open beta with customers.
For such a smell and time for them.
With the chosen application framework users can launch Nvidia sleek can out of software to deploy and manage the AI application of across a variety of Nvidia GPU powered devices.
For enterprise customers, we unveiled a new enterprise grade software offering available as a perpetual license or subscription.
Nvidia AI enterprise is a comprehensive suite of AI software that speeds development and deployment of AI workloads, and simplify management of enterprise AI infrastructure through our partnership with Vmware hundreds of thousands of blue sphere of customers will be able to purchase Nvidia AI enterprise with.
The same familiar of pricing model that I T managers used to procure of Vmware infrastructure software.
We also made several announcement of GCC about accelerating the delivery of both Nvidia AI and accelerated computing to enterprises and edge users among the world's largest industries.
Leading server Oems launched Nvidia certified systems, which are industry standard servers based on the Nvidia <unk> platform.
Brian Nvidia AI enterprise software and are supported by the Nvidia 830, and H N. G. P is initial customers, including Lockheed Martin and mass General Brigham.
In addition, we announced the Nvidia AI on <unk> platform supported on Nvidia eject servers to enable high performance <unk> and AI applications. The AI on Baidu platform Leverages, the Nvidia aerial software and the Nvidia Bluefield.
2 a 100 converged card, which combined RG peers and do peers.
We are teaming with Fujitsu.
Google cloud that of year, Radiuses and wind river in developing solutions based on our AI on <unk> platform to support the creation of smart cities and factories advanced hospitals and intelligence stores.
Another highlight at G. T C with the announcement of a broad range of initiatives to strengthen the arm ecosystem across cloud Datacenters, HBC enterprise and edge and Pcs in the cloud we are bringing together AWS scrub of <unk> processors and Nvidia Gpus.
To provide a range of benefits, including lower cost.
<unk> for mature of game streaming experiences and greater performance for arm based workloads.
In H P. C. We are bringing together an amp here.
Altra.
CPU with Nvidia Gpus, Gpus, and Nvidia H P. C software developer kit initial supercomputing centers deploying that include Oak Ridge bound for Somos National Labs, and the Sun in the enterprise and edge weird for bringing together Marvell arm base.
<unk> processors, and the Nvidia Gpus to accelerate video analytics, and cyber security solutions and in Pcs, We are bringing together media attacks arm based processors within videos RPX Gpus April realistic ray traced graphics and cutting edge AI.
And of new class of earn based laptops.
On our arm acquisition, we are making steady progress in working with the regulators across key regions. We remain on track to close the transaction within our original timeframe of early 2022.
Arms of IP is widely used but the company needs of partner that can help it achieve new heights.
And <unk> is uniquely positioned to enhance orange capabilities, and we are committed to invest in developing the arm ecosystem enhancing R&D, adding IP and turbocharging its development to grow into new markets in the datacenter Iot and embedded devices.
Areas, where it only has a light footprint for in some cases, none at all.
Moving to the rest of the P&L.
GAAP gross margin for the first quarter was down 100 basis points from a year earlier and up 100 basis points sequentially.
Non-GAAP gross margin was up 40 basis points from a year earlier and up 70 basis points sequentially.
These sequential non-GAAP increase was largely driven by a more favorable mix within datacenter and the addition of CMP products Q1, GAAP EPS was 3.03 up 106% from a year earlier non-GAAP EPS was $3.6 6.
103% from a year ago Q.
Q1 cash flow from operations was $1.9 billion.
Let me turn to the outlook for the second quarter of fiscal 2022, we expect broad based sequential year on year revenue growth in all of our market platforms. Our outlook includes 400 million in CMP.
Aside from CMP, the sequential revenue increase in our cure and gaming.
In datacenter, we expect sequential growth in both compute and networking.
In gaming.
With the move to low harsh rate G for Cpus and increasing the amount of CMP products, we are making a significant effort to serve miners for CMP <unk>.
And provide more G first college to gamers.
There's additional CMP demand, we have supply flexibility to support it.
We believe these actions combined with strong gaming demand will drive an increase in our core gaming business for Q2.
Now to look at our outlook for Q2.
Revenue is expected to be 638 billion, plus or -2% GAAP.
GAAP and non-GAAP gross margins are expected to be 64, 6% and 66, 5%, respectively, plus or -50 basis points.
GAAP and non-GAAP operating expenses are expected to be approximately $1.76 billion and 1.26 billion respectively.
GAAP and non-GAAP other income and expenses are both expected to be an expense of approximately 50 million of them.
The non-GAAP tax spaces are both expected to be 10% plus or -1%, excluding discrete items capital 300 million to $325 million.
Further financial details are included in the CFO commentary and other information available on our IR website.
In closing, let me highlight that Jeff Fisher and none of their dogs will keynote conquer tax on the evening of May 31st U S time, as well as several upcoming events for the financial community will be virtually attending the Evercore TMT conference on June 7th.
The Bofa 2021 Global Technology Conference on June 9 and the NASDAQ Virtual Investor Conference on June 16th.
Our earnings call to discuss our second quarter results is scheduled for Wednesday August 18th.
With now we will open the call for questions. Operator would you please poll for questions.
At this time I would like to remind everyone in order to ask a question Press Star then the number 1 on your telephone keypad for.
For just the minutes of compile all the time of day loss.
And your first question comes from Timothy Arcuri with UBS.
Yeah.
Thanks, a lot of thumb Colette I was wondering if you can double click a little more on the guidance I know of the 66.50 and growth. If you said $2.50 is coming from CMP in both gaming and datacenter will be but I can we assume that they are up about equally so youre getting about 200 roughly from each of those and I guess second part of that is within the day.
The center I'm wondering can you speak of the networking piece of it sounds like maybe it was up a bit more modestly than it's been at the past few quarters I'm just wondering what the outlook of Netflix.
Thanks, so much for the question.
Our guidance.
So I first wanted to start off with received demand really across all of our markets all of our different market platforms, we do plan to grow sequentially.
You are correct that we are expecting.
The increase in our CMP.
And outside of our CMP growth, we expect from Lion share of our growth to come from our datacenter and gaming.
In our datacenter business right.
Right now our product lineup couldnt be better we have a strong overall portfolio both for training and for <unk> and we're seeing strong demand across our hyperscale vertical industries.
We've made a deliberate effort on the gaming perspective to supply to our gamers all day.
Cards that they would like given the strong demand that we see so that will also support for sequential growth, but when we say that so you are correct that we do see it.
Growth sequentially coming from data center and gaming, both contributing quite well to our growth.
Thanks, a lot Corp.
For him.
I didn't answer your second question my apologies on the online 1 offs. Additionally, melon ox is an important part of our datacenter. It is quite integrated with our overall products. We did continue.
Continue to see growth this last quarter and we are also expecting them to sequentially grow as we move into Q2. They are a smaller part of our overall datacenter business, but again, we do expect them to grow.
And your next question comes from the C T Miss with Evercore ISI.
Yeah. Good afternoon, and thank you for taking the question can.
In your prepared remarks, I think I heard you talk about our vision for acceleration in data center as we go through the year.
And as you think about.
The purchase obligations they reported up 45% year on year, how much of that is related to for that in terms of what kind of ramp we could see in the second half.
Think about perhaps adding more growth from enterprise on top of it.
Growth.
Okay.
For the quarter. Thank you.
So let me take the first part of your question regarding <unk>.
For our purchasing our purchasing of inventory.
And what we're seeing and just both our purchase commitments in our inventory the market has definitely changed to where long lead times are required to build out our datacenter products. So we're on a steady stream.
To both commit.
Longer term so that we can make sure that we can sort of our customers with the great lineup of products that we have so yeah. It's a good part of those purchase commitments is really about those long lead times of the components to create the full systems I will turn the second part of the question over to Jim for them.
What was the second part of your question Colette.
[laughter] second part of the question was what do we see in the second half of it.
Relates to the lineup of enterprise.
And we articulated in our pre remarks regarding that we're seeing an acceleration. Thank you.
1 of them.
We're seeing we're seeing.
Our strength across the board of data centers.
We are seeing strengthening demand.
CJR argued of centers knows.
It's always of interest.
A range of applications.
From scientific computing, both physical and life Sciences data analytics from classical machine learning.
Cloud computing and cloud graphics, which is becoming more important because of remote work.
And very importantly, NII.
Both for training as well as increasing for.
For classical machine learning models like extra boost all the way to deep learning.
Based models by conversational AI natural language understanding.
Recommended systems and so on.
And so we have a.
We haven't.
A large suite of applications and our Nvidia AI Nvidia <unk> Big summary DS.
These applications in data centers.
They run on systems.
They range from each of <unk> for the Hyperscale, There's 2 R D gx for for on Prem.
2 of each of the export and price edge.
All the way out of 2.
Ags autonomous systems.
And and.
This quarter.
We announced.
1 of our largest initiatives and has taken of several years, you've seen you've seen working on it.
And open on the open over the course of the last several years and it's called <unk> because of our enterprise.
AI platform.
We're democratizing AI, we're bringing out of cloud, we're bringing it to enterprises and we'll bring it out of the edge and the reason for that is because because the vast majority of of the worlds of automation that has to be done.
As David has data sovereignty issues or data rate issues that can move to the cloud easily.
And.
So we don't have to move the computing to the premise and.
And oftentimes are moving out to the edge.
That form the platform has to be secure has to be confidential it has to be remotely.
Manageable.
And.
And of course that has to be high performance and it has to be cloud native.
We don't like the crowds of modern way of doing from datacenter and so these restarts has to be monitoring on the 1 hand, it has to be integrated into classical enterprise systems on the other half of which is the reason why we've worked so closely with Vmware and.
An accelerated Vmware is operating system business, and our operating system and software defined data center.
Tax on Bluefield.
Meanwhile, we reported AI and B H P C.
Onto Vmware, so that they could they could.
Run distributed.
Non scale accelerated computing from for your first time.
And on partnership that partnership was announced.
The real World It was announced at GTC and 1 of the process of going to market with all of our.
Enterprise partners.
Other Oems other value added resellers are there.
Our service their solution integrators.
All of the World.
And so this is this is a really large.
In Denver, and the early indications of them are.
I'm really excited and the reason for that is because of.
As you know of.
Our datacenter business is.
More than 50% vertical industry enterprise already.
It's more than 50% vertical industry enterprise ready and thereby creating was easy to adapt and easy to integrate stack is.
Is going to allow them to move a lot faster.
So this is this is the next major wave of AI. This is a very exciting part of of our initiatives.
And it's something that I've been working on for for and we've been working on for quite a long time, and so I'm delighted with the launch.
Launched this quarter in TTC.
The rest of the rest of the data centers do agree too.
As Claude mentioned Hyperscale demand is strengthening we are seeing that for computing and networking.
You know you know that.
The world's cloud data centers are moving to deep learning because every small percentage of they get out of predictive inference drive billions and billions of dollars of economics for them.
And.
So of the movement towards deep learning.
Shifts.
Davidson of workload away from Cpus, because accelerators are so important.
And and so hard for scale, we're seeing great great traction great demand.
And then lastly, supercomputing supercomputers and as all of the world of building out and.
And we're really in a great position there to fuse for the room for his time.
Simulation based approaches as well as data driven based approaches.
Artificial intelligence and.
And so across the board our datacenter is gaining momentum.
We see we just see great strength from now and it's growing strength and would really set up for.
For years of growth in data Center. This is the largest segment of computing as you know.
And.
This segment of computing is going to continue the growth for some time to come.
And your next question comes from Aaron Drinkers with Wells Fargo.
Yes, Thanks for taking my question and congratulation on the results I'm going to try to slip in 2 of them here first of all of Colette I think in the past you talked about how much of your gaming installed base is kind of on the pre race Ray tracing platform for a really kind.
Kind of in context behind the upgrade cycle that that's still in front of us.
Got a question of 1 of them.
On the heels of the last question I was just curious things like via whereas project Monterey as we think about the bluefield crude product in Brazil, 3 how should we think about those starting to become or when should they become really material incremental revenue growth contributors for the company. Thank you.
So gal, we have definitely discussed in terms of the great opportunity that we have in front of us of folks moving into our ray traced.
J P is and we're in the early stages of that we've had a strong.
Cycle already.
But still we probably have approximately 15% moving up a little bit from that at this time. So it's a great opportunity for us to continue to upgrade a good part of that installed base not only just with our desktop Gpus on a buck the RT ex lockouts or also.
A great driver of growth and upgrading of folks to RPX.
Yeah.
Colin you want me to take the second 1.
Claims.
There are no good great question on on Bluefield.
First of all.
For modern data center has to be re architected for several reasons for several fundamental reasons.
Very very clear that the architecture has to change.
The first the first of those common units, which means the.
The datacenter of insured for everybody. It's multi tenant you don't know who's coming and going in and zone.
It's exposed to everybody on the Internet number 2.
You have to you have to assume that it's a zero trust environment.
Because because you don't know who's using it used to be that we have perimeter of perimeter.
Security, but those days of gone because of its Colin.
Remote access is multi tenant.
Your public cloud infrastructures used for internal and external applications.
So some of them to have to be it has to be zero Trust. The third reason is something that started a long time ago, which is software defined.
In every way because you want you don't want a whole bunch of bespoke custom.
Gear inside of datacenter you want to operate the datacenter with software you wanted to be software deployment of software defined.
Datacenter movement.
Enabled this 1 piece of glass.
A few managers orchestrating.
Millions of millions of news of compute.
Computers and at 1 point.
And the software.
The software runs what used to be storage networking security virtualization.
All of that all of those things have become a lot larger.
And a lot more intensive and.
And then it's consuming a lot of of the data some of in fact, you estimate depending on how you want to think about it how much security 1 of you want to put on it.
Assume that its a zero trust datacenter, probably half of the CPU cores inside of data center is running non applications.
And that's kind of strange because you created the datacenter to run services and applications, which is the only thing that makes money.
The other half of the computing is completely soaked up running the software defined datacenter just to provide for those applications.
And that then you could imagine even accepting if you like of the cost of doing business. However.
Co mingles, the infrastructure of the security point and the application plant and it exposes the datacenter too.
Attackers.
And answer you.
Fundamentally we want to change the architecture of as a result of that to offload the software defined virtualization and the infrastructure operating system. If you will in the security services to accelerated because most loans ended and moving moving software that was running on <unk> of the Cpus, which is.
Is really really doing already to another set of Cpus and we're going to make it more effective.
Separating it doesn't make it more effective business do you want to offload that and take the take.
Take that application and software and accelerated using accelerators.
A form of accelerated computing.
And so that's some of these things are fundamentally when Brookfield is all about.
And we created the processor that allows us to Brookfield to replaces approximately 30 CPU cores.
<unk> III replaces approximately.
300, CPU cores for Justin.
Give you a sense of it and a good feel for where in the process of doing already.
So we've done a really aggressive pipeline students know how big of this market.
A way to think about that as every single networking chip in the world.
Every single networking chip will be a smart network construct.
Okay.
It will be of programmable accelerated infrastructure processor, and Thats, where most of the GPU is a data center on a chip and <unk>.
I believe every single server know Mohammed he will replace today's mix.
With something like Brookfield, and it will offload.
Half of the software processing, that's consumer data centers today.
Most importantly, it will enable that future world, where every single packet every single application is being monitored.
In real time, all the time.
For for.
Intrusion.
So how big of an application of how big of a market.
25 million servers a year.
What's the size of the market.
And we known of servers of growing in some of those give you a feeling for that and in the future.
<unk> is going to move out to the edge and all of those edge devices.
Something like Brookfield, and then how.
How are we doing where.
We're doing a POC is now with just about every Internet company.
We're doing really exciting work there.
<unk>.
Included in high performance computing, so that it's possible for supercomputers in the future to be cloud native to be zero trust to be secure and there'll be a supercomputer.
And.
We expect next year to have.
Meaningful.
He is not significant revenue contribution from Brookfield and this is going to be a really large growth market for US you can tell I'm excited about this.
Zone I put a lot of my energy and towards the company is working really hard on.
And this is Rob.
Our form of accelerated computing is going to really make a difference.
And your next question comes from Mr. Vivek Arya with Bank of America Securities.
Thanks for taking my question Jensen is Nvidia able to ring fence.
Crypto of impact in your CMP product, so even if let's say of crypto goes away for whatever reason the decline is a lot more predictable and manageable than what we saw in the 2018.19 cycle and then kind of part B of that is how do you think about your core PC gamer demand because when we see these kind of 100.
6% year on year growth rate it brings questions of.
For our sustainability, so give us your perspective on these 2 topics just how does 1 of the ring fence kind of of the crypto effect and what do you think about the sustainability of your core PC Gamer day back. Thank you.
Sure. Thanks, a lot of them.
First of all of it is hard to estimate exactly how how much.
And where could you remind me of being done.
However, we can only we can 1 assume that the vast majority of it is contributed by professional monitors, especially 1 of the amount of money increases tremendously might be like in house.
And so we created CMP and anti G force for mining, but you can't use CMP for gaming.
On CMP as yields better.
And.
Producing goes.
Yes.
So.
It protects our of G for supply for the gamers.
Hum.
And the question that you had is is what happens when there are several several things.
Though we hope.
Yeah.
Dynamic.
Right.
Ts.
Hi.
For the miners will stay in mines and the professional months and we're trying to produce.
Fair amount of them.
A lot of a lot of demand for <unk> and we'll fulfill it.
And.
It's fine.
Is that correct.
From our RPX cycle, whereas.
Pascal Award for last.
And not only that there was a bit.
<unk> of the Gtx cycle.
It was the last Gtx and there was a.
The tail end of Q2 next cycle.
We're at the very beginning of the <unk> cycle.
And because we've reinvented computer graphics.
Reset the computer industry and after 3 years the entire.
Graphics industry has followed.
Every day developers moving to Ray tracing every content developer in every content tool has moved from increasing.
And so did you did you lose retracing. These applications are so much.
It's better.
They simply growth to slow on Gtx is and so we're seeing that.
The reset of the installed base if you will.
And at a time when the gaming market is the largest ever.
We've got this incredible installed base of <unk> users.
Reinventing computer graphics and reset there.
Lisa.
Store base and create an upgrade opportunity that's really exciting at a time when the market is the gaming market beginning of industries really large.
What's really.
Sports esports, it's infused into <unk>.
Orange is infused into social.
And.
So gaming is.
Such a large cultural impact it's the largest 1 of the entertainment.
And I think of the experience we're going through.
Is it.
Is it going to last for 1.
So 1 I hope.
Net crypto the CMP will steer.
Fundamentals for quite some time.
Because of the dynamics.
Then I have described.
And hopefully the combination of those 2.
Yeah.
And we will see strong growth in you know through the through.
Through strong growth in our core gaming business for the year.
And our next question comes from John Pitzer with Credit Suisse.
Yeah. Good afternoon, guys. Thanks for let me ask the question since May of 2 hopefully quick questions first I harken back to demand for you guys put out a couple of analyst days of go.
The more you spend the more you save and you've always been very successful as you brought down the cost of giving something to really drive penetration growth and so I'm curious with the Nvidia enterprise AI software stack is there a sense that you can give us how much of that brings down the cost of deployment and AI inside the enterprise and do you think.
Other COVID-19 lockdown related or costs related there is pent up demand of this unlocks and then my second question was just around government subsidy is a lot of talks out of Washington about subsidizing the chip industry a lot of that goes towards building fabs domestically, but when I look at any other AI I can't think of anything more important to maintain.
Sort of leadership in relative to National security.
How do we think about Nvidia and kind of the impact of these government subsidies might have on either you or your customers or your business trends.
The more you buy the more you shelf soon theres no.
<unk> about that and the reason for that is because we're in the business of accelerated computing, we don't accelerated every application. However for the applications, we do accelerate the acceleration of some dramatic.
And because we sell a component.
Tier system, the Tcl the statistic the CTO of the entire system and all of the services of all of the people and the infrastructure and the energy product.
It has been reduced by X factors, sometimes 10 times, sometimes 15 times, sometimes 5 times.
So the.
So.
When we set our mind on exploring the quantum of industry quantum computing industry.
All of them either simulators, so that they can discover new round with them from some of.
Ben future computers, even those of you won't happen until 2030 for the next 20 years of work.
Going on for 2 years, where we're gonna have to do using Nvidia Gpus to do quantum simulations.
And we recently did a lot of them.
And computational biology, so that we could decode biology and understand how biology.
To infer too to understand.
Vigorously.
Improve upon it in the non new proteins those those weren't.
And.
Manuel.
Our enterprise software and I really appreciate the question our enterprise software.
Used to be just about the BGP of which as Bruce.
Inside of the Vmware environmental and so on 1 hand environment makes it possible for multiple users.
Which is the nature of enterprise virtualization, but now with Nvidia AI.
And video omnivores.
Whether you're.
Doing collaboration.
For virtual simulations for robotics.
Digital twins design of new factory.
Or youre doing.
Learning what the predicted features.
Sorry that could create an AI model predictive model that you can deploy out but at the edge using fleet command and we now have an index suite of software.
That is consistent with today's enterprise.
And it's consistent with today's enterprise business models.
<unk>.
And allows us to support customers directly and provide them with the necessary.
Service promises that they expect because they are delivering very strong growth.
And and more of them.
Importantly.
By creating this.
Tons of our software.
We provide the ability for our.
Our large network of partners OEM partners.
Are you out of resellers system integrators solution providers for.
This large network of hundreds of thousands of sales professionals that are connected to our network, we give them a product that they can take the market.
And so the distribution channels of sales channel of Vmware.
The sales channel of caldera sales channel of.
All of our partners in EBITDA and design.
Autodesk, so on a day or so so on and so forth all of these all of these sales channels and all of these partners are now partners in taking our snacks to market and.
And we have a fully integrated system.
But.
That are open to the OEM, so that they can create systems of run the stock and its all certified all tested all benchmark.
And of course, very importantly, all supported.
And so this this new way of thinking.
Our price to margin.
Whereas whereas our cloud business is going to continue to grow in that part of AI is going to continue to grow of that business is direct we sell components directly to them, we support them directly for their 10 of those.
Customers in the World for enterprises third thousands industries for anyone.
And so.
Okay.
We now have a great stock and of Great software stack that allows us to take it to the worlds market sort of everybody.
Coupon 1 Sigma.
Thank you.
It comes from Stacy for Maxim.
Hi, guys. Thanks for taking my questions.
For Q1.
Last quarter you were.
Good.
Kind of suggested that Q1 would be the trough for.
For the <unk> for gaming as well as the rest of the company beginning in particular and it would grow sequentially through the year.
I guess given the strength, we're seeing in the first half do you still believe that that is the case and I kind of heard you guys I think kind of dance around that with a little bit in response to 1 of the other questions, but could you clarify that is that still your belief that that cash.
Sequentially.
For the rest of the year and at the same quarter of the question as well for datacenter, especially since it sounds like Hyperscale is now coming back like after a few quarters of digestion and then all of the other tailwind you've talked about I mean is there any reason to think the datacenter itself Shouldnt also growth sequentially through the rest of the year.
Yes, Stacy thanks for the question Chuck first of all I'll start with when.
When we talked about our Q1 results and when we're looking at Q1, we were really.
Discussing a lot about but we expected between Q4 and Q1.
Given what we knew was still high demand.
For gaming.
Later, we will continue to grow between Q4, and Q1, which often we don't and we absolutely have the strength of our volume demand.
Rob what does that then lead was again continued growth from Q1 to Q2.
We are working hard to provide more supply for the <unk>.
Demand that we see.
We have talked about that we have additional supply coming.
We expect to continue to grow as we move into the second half of the year as well as for gaming now we only guide 1 quarter at a time, but.
But our plan is to take.
Take the supply certainty overall gamers work on building up the channel as we know what the channel is quite lean and so yes, we do still expect growth from the second half of the year, particularly when we see from buying up of games of the hall.
For a day of all coming into back to school all of the very important cycle for us and there's a great opportunity.
<unk> upgrade for us on checks installed base now in terms of data center of our work in terms of our guidance here, we have our growth from Q1 to Q2 planned in our of our guidance and we do see as things continue to open up.
Time to accelerate in the second half of the year for data Center, we have again, a great lineup of products here.
Be about our lineup now that we've also added the end consumer products from a host of overall applications that are using our software that we have.
So this could be an opportunity as well to see that continued growth will.
We'll work in terms of.
Surfing.
For the supply that we need for both of these markets, but yes, we can see definitely going from the second half of the year.
There are no further questions at this time of fee.
Okay from Huang ill turn the call back over to you.
Well. Thank you. Thank you for joining us today Nvidia.
Computing platform is accelerating.
Launched at GTC, we are now ramping new platforms and initiatives there.
Several of them I'll mentioned first.
Enabled by the fusion of Nvidia Rts.
<unk> rebuilt.
The groups of platform for virtual collaboration and virtual worlds.
To enable tens of millions of artists and designers to create together and their own meta vs.
Second.
We laid the foundation to be of 3 Chuck.
Datacenter scale computing company.
With Gpus Gpus.
<unk> to us.
And Cpus.
Third.
AI is the most powerful technology force of our time.
We partner with cloud and consumer Internet companies to scale and commercialize AI powered services.
And we're democratizing AI for.
For every enterprise and every industry.
With Nvidia EGF certified systems.
Nvidia Enterprise AI suite.
Pre trained models for conversational AI.
Language understanding recommended systems.
And our broad partnerships across the industry, we are removing the barriers for every day.
Yes.
And biology.
He is deeply impactful for the healthcare industry and I look forward to tens of a lot more bunkers from future.
Self driving.
Software defined car is coming with.
With Nvidia drive we are partnering with the global transportation industry.
Street to reinvent the car architecture.
<unk> mobility.
Driving and reinvent the business model of the industry.
Transportation is going to be 1 of the worlds largest technology industries.
From gaming men of versus cloud computing, AI robotics self driving cars genomics com.
Institutional biology.
Nvidia is doing important work.
Innovating in the fastest growing markets today.
As you can see on top of our computing platforms that spanned PCH PC cloud enterprise to autonomous edge. We've also transformed our business model beyond chips.
And many of the GPU.
And the AI enterprise.
Nvidia for command.
And Nvidia omnivores.
Enterprise software license and subscription to our business model.
And Nvidia G Force now.
And Nvidia drive with Mercedes Benz of the lead partner our end to end services on top of that.
I want to thank all of the Nvidia employees and partners for the amazing work Youre doing well.
We look forward to updating you on our progress next quarter.
Thank you.
This concludes today's conference call you may now disconnect.
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