Q1 2026 NVIDIA Corp Earnings Call

Operator: for you. Yeah.

First of all yes.

Yeah.

Operator: Perfect, and going live in five, four, three.

Perfect and going live in 543.

Okay.

Sarah: Good afternoon. My name is Sarah, and I will be your conference operator today. At this time, I would like to welcome everyone to NVIDIA's first quarter fiscal 2026 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, please press star 1 again. Thank you.

Good afternoon.

Sarah: My name is Sarah and I will be your conference operator today at this time I would like to welcome everyone to Nvidia is at first quarter fiscal 2026 financial results Conference call.

Sarah: All lines have been placed on mute to prevent any background noise.

After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press star one.

On your telephone keypad, if you would like to withdraw your question. Please press star one again thank you.

Toshiya Hari: Toshiya Hari, you may begin your conference. Thank you.

Shia Hari: So Shia Hari you may begin your conference.

Speaker Change: Thank you good afternoon, everyone and welcome to in video conference call for the first quarter of fiscal 2026.

Toshiya Hari: Good afternoon, everyone, and welcome to NVIDIA's conference call for the first quarter of fiscal 2026.

Toshiya Hari: With me today from NVIDIA are Jensen Huang, President and Chief Executive Officer, and Colette Kress, Executive Vice President and Chief Financial Officer. I'd like to remind you that our call is being webcast live on NVIDIA's Investor Relations website. The webcast will be available for replay until the conference call to discuss our financial results for the second quarter of fiscal 2026.

Colette Kress: With me today from Nvidia are Jensen, Huang President and Chief Executive Officer, and Colette, Kress Executive Vice President and Chief Financial Officer.

Colette Kress: I'd like to remind you that our call is being webcast live unambiguous Investor Relations web site.

Colette Kress: The webcast will be available for replay until the conference call to discuss our financial results for the second quarter of fiscal 2026.

Toshiya Hari: The content of today's call is NVIDIA's property. It can't be reproduced or transcribed without our prior written consent.

Speaker Change: The content of today's call is Nvidia is property.

Speaker Change: Can't be reproduced or transcribed without our prior written consent.

Toshiya Hari: During this call, we may make forward-looking statements based on current expectations. These are subject to a number of significant risks and uncertainties, and our actual results may differ materially. for a discussion of factors that could affect our future financial results in business. Please refer to the disclosure in today's earnings release, our most recent Forms 10-K and 10-Q, and the reports that we may file on Form 8-K with the Securities and Exchange Commission.

Speaker Change: During this call we may make forward looking statements based on current expectations.

Speaker Change: These are subject to a number of significant risks and uncertainties and our actual results may differ materially.

Speaker Change: For a discussion of factors that could affect our future financial results and business. Please refer to the disclosure in today's earnings release, our most recent forms 10-K and 10-Q.

Speaker Change: And the reports that we may file on form 8-K, with the Securities and Exchange Commission.

Toshiya Hari: All our statements are made as of today, May 28, 2025, based on information currently available to us. Except as required by law, we assume no obligation to update any such statement.

Speaker Change: All our statements are made as of today May 28, 2025 based on information currently available to us.

Speaker Change: Except as required by law, we assume no obligation to update any such statements.

Toshiya Hari: During this call, we will discuss non-GAAP financial measures. You can find a reconciliation of these non-GAAP financial measures to GAAP financial measures in our CFO commentary, which is posted on our website.

Colette Kress: During this call we will discuss non-GAAP financial measures you can find a reconciliation of these non-GAAP financial measures to GAAP financial measures in our CFO commentary, which is posted on our website with that let me turn the call over to Colette.

Colette Kress: With that, let me turn the call over to Colette. Thank you, Toshiya. We delivered another strong quarter with revenue of $44 billion, up 69% year over year, exceeding our outlook in what proved to be a challenging operating environment. Data center revenue of $39 billion grew 73% year on year. AI workloads have transitioned strongly to inference, and AI factory build-outs are driving significant revenue. Our customers' commitments are firm.

Colette Kress: Thank you Tasha.

Colette Kress: We delivered another strong quarter with revenue of 44 billion up 69% year over year exceeding our outlook in what proved to be a challenging operating environment.

Colette Kress: Data center revenue of 39 billion grew 73% year on year.

Colette Kress: Our workloads have transitioned strongly to infringe and AI factory build outs are driving significant revenue.

Colette Kress: Our customers commitments are firm.

Colette Kress: On April 9th, the U.S. government issued new export controls on H20, our data center GPU designed specifically for the China market. We sold H20 with the approval of the previous administration. Although our H20 has been in the market for over a year and does not have a market outside of China, the new export controls on H20 did not provide a grace period to allow us to sell through our inventory. In Q1, we recognized $4.6 billion in H20 revenue, which occurred prior to April 9th, but also recognized a $4.5 billion charge as we wrote down inventory and purchase obligations tied to orders we had received prior to April 9th.

Colette Kress: On April 9th U S government issued new export controls on H 'twenty, our data center GPU designed specifically for the China market.

Colette Kress: Sold H 'twenty with the approval of the previous administration, although our H 'twenty has been in the market for over year and does not have a market outside of China. The new export controls on H 'twenty did not provide a grace period to allow us to sell through our inventory in.

Colette Kress: In Q1, we recognized $4 6 billion in H 'twenty revenue, which occurred prior to April 9th but also recognized a $4 5 billion charge as we wrote down inventory and purchase obligations tied to orders. We had received prior to April 9th.

Colette Kress: We were unable to ship $2.5 billion in H20 revenue in the first quarter due to the new export controls. The $4.5 billion charge was less than what we initially anticipated as we were able to reuse certain materials. We are still evaluating our limited options to supply data center compute products compliant with the U.S. government's revised export control rules.

Colette Kress: We were unable to ship $2 5 billion and H 'twenty revenue in the first quarter due to the new export controls the.

Colette Kress: The $4 5 billion charge was less than what we initially anticipated as we were able to reuse certain materials.

Colette Kress: We are still evaluating our limited options to supply datacenter compute products compliant with the U S government's revised export control rules, losing access to the China, AI accelerator market, which we believe will grow to nearly $50 billion wood.

Colette Kress: Losing access to the China AI accelerator market, which we believe will grow to nearly $50 billion, would have a material adverse impact on our business going forward and benefit our foreign competitors in China and worldwide.

Colette Kress: Would have a material adverse impact on our business going forward and benefit our foreign competitors in China and worldwide.

Colette Kress: or BlockWallRamp. The fastest in our company's history, drove a 73% year-on-year increase in data center revenue. Blackwell contributed nearly 70% of data center compute revenue in the quarter, with a transition from Hopper nearly complete. The introduction of GB200 NBL was a fundamental architectural change to enable data center scale workloads and to achieve the lowest cost per inference token. While these systems are complex to build, we have seen a significant improvement in manufacturing yields and rack shipments are moving to strong rates to end customers. GB200 and VL racks are now generally available for modern builders, enterprises, and sovereign customers to develop and deploy AI.

Colette Kress: Our Blackwell ramp.

Colette Kress: <unk> in our company's history drove a 73% year on year increase in data center revenue Blackwell contributed nearly 70% of datacenter compute revenue in the quarter with a transition from hopper nearly complete.

Colette Kress: The introduction of GBP 200, NPL was a fundamental architectural change to enable data center scale workloads and to achieve the lowest cost per inference token while.

Colette Kress: While these systems are complex to build we have seen a significant improvement in manufacturing yields and rack shipments are moving two strong rates to end customers.

Colette Kress: GBP 200, NBL racks are now generally available from other builders enterprises, and sovereign customers to develop and deploy AI.

Colette Kress: On average, major hyperscalers are each deploying nearly 1,000 NBL72 racks or 72,000 Blackwell GPUs per week. and are on track to further ramp output this quarter. Microsoft, for example, has already deployed tens of thousands of Blackwell GPUs and is expected to ramp to hundreds of thousands of GB200s with OpenAI as one of its key customers. Key learnings from the GB200 ramp will allow for a smooth transition to the next phase of our product roadmap, Blackwell Ultra. Sampling of GB300 systems began earlier this month at the major CSPs, and we expect production shipments to commerce later this quarter.

Colette Kress: On average major Hyperscale errors are each deploying nearly 1000 N V. L 72 racks for 72000, Blackwell Gpus per week and.

Colette Kress: And are on track to further ramp output this quarter.

Speaker Change: Microsoft for example has already deployed tens of thousands of Blackwell Gpus and is expected to ramp to hundreds of thousands of GBP 200 with opening I as one of its key customers.

Colette Kress: Key learnings from the GBP 200 ramp will allow for a smooth transition to the next phase of our product roadmap Blackwell ultra.

Colette Kress: Sampling of GBP 300 systems began earlier this month at the major CSP and we expect production shipments to commercial Commerce. Later this quarter TB 300 will leverage the same architecture same physical footprint and the same electrical and the.

Colette Kress: GB300 will leverage the same architecture. same physical footprint and the same electrical and mechanical specifications as GB200. The GB300 drop-in design will allow CSPs to seamlessly transition their systems and manufacturing used for GB200 while maintaining high yield. B300 GPUs with 50% more HBM will deliver another 50% increase in dense FP4 inference compute performance compared to the B200. We remain committed to our annual product cadence, with our roadmap extending through 2028 tightly aligned with the multiple year planning cycles of our customers.

Colette Kress: Clinical specifications SGD 200.

Colette Kress: The GBP 300 drop in design will allow <unk> to seamlessly transition their systems and manufacturing used for GBP 200, while maintaining high yield b.

Colette Kress: <unk> 300, Gpus with 50% more H B M will deliver another 50% increase in dense SP for inference compute performance compared to the B 200.

Colette Kress: We remain committed to our annual product cadence with our roadmap extending through 2028 tightly aligned with the multiple year planning cycles of our customers.

Colette Kress: We are witnessing a sharp jump in inference demand. OpenAI, Microsoft, and Google are seeing a step function leap in token generation. Microsoft processed over 100 trillion tokens in Q1, a five-fold increase on a year-over-year basis. This exponential growth in Azure OpenAI is representative of strong demand for Azure AI Foundry, as well as other AI services across Microsoft's platform. Inference-serving startups are now serving models using B200, tripling their token generation rate and corresponding revenues for high-value reasoning models such as DeepSeek R1, as reported by Artificial Analysis.

Colette Kress: We are witnessing a sharp jump in inference demand open AI, Microsoft and Google are seen a step function leap and token generation Microsoft processed over 100 trillion tokens in Q1, a five fold increase on a year over year basis.

Colette Kress: This exponential growth in Azure opening I is representative of strong demand for Azure AI foundry as well as other AI services across Microsoft platform.

Colette Kress: And friends, serving startups are now serving models using b 200, tripling their token generation rate and corresponding revenues for high value reasoning models, such as deep CCAR, one as reported by artificial artificial analysis.

Colette Kress: NVIDIA Dynamo on Blackwell NVL72. Terberg charges AI inference throughput by 30x for the new reasoning models sweeping the industry. Developer engagements increased with adoption ranging from LLM providers, such as Perplexity, to financial services institutions, such as Capital One, who reduced agentic chatbot latency by 5x with Dynamo. In the latest MLPerf inference results, we submitted our first results using GB200 and BL72, delivering up to 30x higher inference throughput compared to our 8 GPU H200 submission on the challenging LLAMA 3.1 benchmark. This feat was achieved through a combination of tripling the performance per GPU, as well as 9x more GPU.

Colette Kress: Nvidia Dynamo on Blackwell NBL 72.

Colette Kress: Turbocharges AI inference throughput by 30 acts for the new reasoning models sweeping the industry developed.

Colette Kress: Developer engagement increased with adoption ranging from L O&M providers such as perplexity.

Colette Kress: Two financial service says institutions, such as capital, one who reduced a gentex chatbot latency by five X with Dynamo.

Colette Kress: In the latest <unk> perf and <unk> results, we submitted our first results using GBP 200, NBL 72, delivering up to 30 acts higher inference throughput compared to our eight GPU H 200 submission on the challenging Lama three one benchmark.

Colette Kress: This feat was achieved through a combination of tripling the performance per GPU as well as <unk> Gpus.

Colette Kress: all connected on a single NVLink domain. And while Blackwell is still early in its life cycle, software optimizations have already improved its performance by 1.5x in the last month alone. We expect to continue improving the performance of Blackwell through its operational life as we have done with Hopper and Amper. For example, we increased the inference performance of Hopper by four times over two years. This is the benefit of NVIDIA's programmable CUDA architecture and rich ecosystem. The pace and scale of AI factory deployments are accelerating with nearly 100 NVIDIA-powered AI factories in flight this quarter, a twofold increase year-over-year, with the average number of GPUs powering each factory also doubling in the same period.

Colette Kress: All connected on a single and be linked domain.

Colette Kress: And while Blackwell is still early in its lifecycle software optimizations have already improved its performance by 1.5 acts in the last month alone.

Colette Kress: We expect to continue improving the performance of Blackwell through its operational life as we have done with Hopper and <unk>.

Colette Kress: For example, we increased the inference performance of Hopper by four times over two years. This is the benefit of Nvidia is programmable cuda architecture and rich ecosystem.

Colette Kress: The pace and scale of AI factory book claimants are accelerating with nearly 100, Nvidia powered AI factories in flight this quarter, a two fold increase year over year with the average number of Gpus powering each factory also doubling in the same period.

Colette Kress: And more AI factory projects are starting across industries and geographies. NVIDIA's full stack architecture is underpinning AI factory deployments as industry leaders like AT&T, BYD, Capital One, Foxconn, MediaTek, and Telenor are strategically vital sovereign clouds like those recently announced in Saudi Arabia, Taiwan, and the UAE.

Colette Kress: And more AI factory projects are starting across industries, and geographies and videos full stack architecture is underpinning AI factory deployment as industry leaders like AT&T BYD capital, one Fox Con media attack and telling them are strategically vital sovereign clouds.

Colette Kress: Like those recently announced in Saudi Arabia, Taiwan, and the UAE.

Colette Kress: We have a line of sight to projects requiring tens of gigawatts of NVIDIA AI infrastructure in the not-too-distant future. The transition from generative to agentic AI, AI capable of perceiving, reasoning, planning, and acting, will transform every industry, every company and country. We envision AI agents as a new digital workforce capable of handling tasks ranging from customer service to complex decision making processes. We introduced the LLAMA-Nemotron family of open reasoning models designed to supercharge identic AI platforms for enterprises. Built on the LLAMA architecture, these models are available as NIMS or NVIDIA-inferenced microservices with multiple sizes to meet diverse deployment needs.

Colette Kress: We have a line of sight to projects requiring tens of Gigawatts of Nvidia AI infrastructure in the not too distant future.

Colette Kress: The transition from Jane generative to a gentex AI AI capable of perceiving reasoning planning and acting will transform every industry every company and country. We envision AI agents is a new digital workforce K.

Colette Kress: <unk> of handling Taos, ranging from customer service to complex decision, making processes.

Colette Kress: We introduced the Lama Nemo Tron family of opened reasoning models designed to supercharge Identic AI platforms for enterprises bolt on the Lama architecture. These models are available as nims or Nvidia infringe micro services with multiple sizes to meet diverse to.

Colette Kress: Claimant needs are.

Colette Kress: Our post-training enhancements have yielded a 20% accuracy boost and a 5x increase in inference speed. Leading platform companies including Accenture, Cadence, Deloitte, and Microsoft are transforming work with our reasoning models. NVIDIA, NeMo, microservices are generally available across industries or are being leveraged by leading enterprises to build, optimize, and scale AI applications. With NeMo, Cisco increased model accuracy by 40% and improved response time by 10x in its code assistant. NASDAQ realized a 30% improvement in accuracy and response time in its AI platform's search capabilities. And Shell's Custom LLM achieved a 30% increase in accuracy when trained with NVIDIA NeMo.

Colette Kress: Our post training enhancements have yield a 20% accuracy boost and a five X increase in entrance speed.

Colette Kress: Leading platform companies, including Accenture cadence, Deloitte and Microsoft are transforming work with our reasoning models.

Colette Kress: Nvidia Nemo micro services are generally available across industries are being leveraged by leading enterprises to build optimize and scale AI applications.

Colette Kress: With Nemo, Cisco increased model accuracy by 40% and improved response time by 10 X and its code assistant.

Colette Kress: <unk> realized a 30% improvement in accuracy and response time and its AI platforms search capabilities and shells custom LLM achieved a 30% increase in accuracy when trained with Nvidia Nemo Nemo's parallelism techniques accelerated model training time by <unk>.

Colette Kress: NeMo's parallelism techniques accelerated model training time by 20% when compared to other frameworks.

Colette Kress: 3% when compared to other frameworks.

Colette Kress: We also announced a partnership with Yum! Brands, the world's largest restaurant company to bring NVIDIA AI to 500 of its restaurants this year and expanding to 61,000 restaurants over time to streamline order taking, optimize operations, and enhance service across its restaurants.

Colette Kress: We also announced a partnership with Yum brands, the world's largest restaurant company to bring Nvidia AI to 500 of its restaurants, this year and expanding to 61000 restaurants over time to streamline order, taking optimize operations and enhance service.

Colette Kress: Across its restaurants.

Colette Kress: For AI-powered cybersecurity, leading companies like Check Point, CloudStrike, and Palo Alto Networks are using NVIDIA's AI security and software stack to build, optimize, and secure agentic workflows, with CloudStrike realizing 2x faster detection triage with 50% less compute Moving to networking. Sequential growth in networking resumed in Q1 with revenue up 64% quarter over quarter to $5 billion. Our customers continue to leverage our platform to efficiently scale up and scale out AI factory workloads. We created the world's fastest switch, NVLink. For scale up, our NVLink Compute Fabric in its fifth generation offers 14x the bandwidth of PCIe Gen5.

Colette Kress: For AI powered cyber security, leading companies like checkpoint cloud strike and Palo Alto networks are using Nvidia is AI security and software stack to build optimize and secure a genetic workflows with cloud strike, realizing two X faster detection triage with 50%.

Colette Kress: Less compute cost.

Colette Kress: Moving to networking sequential growth in networking resumed in Q1 with revenue up 64% quarter over quarter to 5 billion.

Colette Kress: Our customers continue to leverage our platform to efficiently scale up and scale out AI factory workloads.

Colette Kress: We created the worlds fastest switch and we link for scale up our NV link compute fabric in its fifth generation offers 14 X the bandwidth of Pcie Gen five.

Colette Kress: NVLink 72 carries 130TBps of bandwidth in a single rack, equivalent to the entirety of the world's peak internet traffic NVLink is a new growth vector and is off to a great start with Q1 shipments exceeding a billion dollars.

Colette Kress: And we link 72 carries 130 terabytes per second of bandwidth in a single rack equivalent to the entirety of the world peak Internet traffic.

Colette Kress: And the link is a new growth vector and is off to a great start with Q1 shipments exceeding $8 billion.

Colette Kress: At Computex, we announced NVLink Fusion. Hyperscale customers can now build semi-custom CCUs and accelerators that connect directly to the NVIDIA platform with NVLink. We are now enabling key partners, including ASIC providers, such as MediaTek, Marvell, Alchip Technologies, and Astera Labs, as well as CPU suppliers, such as Fujitsu and Qualcomm, to leverage NVLink Fusion to connect our respective ecosystems. For scale-out, our enhanced Ethernet offerings deliver the highest throughput, lowest latency networking for AI. SpectrumX posted strong sequential and year-on-year growth and is now annualizing over $8 billion in revenue. Adoption is widespread across major CSPs and consumer internet companies, including CoreWeave, Microsoft Azure, Oracle Cloud, and XAI.

Colette Kress: At <unk>, we announced and we link fusion Hyperscale customers can now build semi custom Cpus and accelerators that connect directly to the Nvidia platform with <unk>. We are now, enabling key partners, including asset providers, such as Mediatek Marvell.

Colette Kress: Our chip technologies, and Estero labs, as well as CPU suppliers, such as does it too and Qualcomm to leverage and be linked fusion to connect our respective ecosystems.

Colette Kress: For scale out our enhanced Ethernet offerings delivered the highest throughput lower latency networking for AI spectra.

Colette Kress: Spectrum ex posted strong sequential and year on year growth and is now annualizing over $8 billion in revenue.

Colette Kress: Adoption is widespread across major csp's and consumer Internet companies, including core week, Microsoft Azure Oracle cloud and Xa on this quarter, we added Google cloud and matter to the growing list of spectrum ex customers.

Colette Kress: This quarter, we added Google Cloud and Meta to the growing list of SpectrumX customers.

Colette Kress: We introduce SpectrumX and QuantumX, silicon photonics switches. featuring the world's most advanced co-packaged optics. These platforms will enable next-level AI factory scaling to millions of GPUs through the increasingly power efficiency by 3.5x and network resiliency by 10x while accelerating customer time to market by 1.3x.

Colette Kress: We introduced spectrum, <unk> and quantum acts silicon photonics switches.

Colette Kress: Featuring the worlds most advanced co package optics. These platforms will enable next level AI factory scaling to millions of Gpus through the increasingly power efficiency.

Colette Kress: Three five X and network resiliency by 10 X, while accelerating customer time to market by 1.3 acts.

Colette Kress: Transitioning to a quick summary of our revenue by geography. China as a percentage of our data center revenue was slightly below our expectations and down sequentially due to H-20 export licensing controls. For Q2, we expect a meaningful decrease in China data center revenue. As a reminder, while Singapore represented nearly 20% of our Q1 build revenue, as many of our large customers use Singapore for centralized invoicing, our products are almost always sold elsewhere. Note that over 99% of H-100, H-200, and Blackwell data center compute revenue billed to Singapore was for orders from U.S.-based customers.

Colette Kress: Transitioning to a quick summary of our revenue by geography.

Colette Kress: China as a percentage of our datacenter revenue was slightly below our expectations and down sequentially due to H 'twenty export licensing controls for Q2, we expect a meaningful decrease in China data Center revenue.

Colette Kress: As a reminder, while Singapore represented nearly 20% of our Q1 build revenue as many of our large customers use Singapore for centralized invoicing. Our products are almost always hoped elsewhere note that over 99% of <unk> 100 <unk>.

Colette Kress: <unk> hundred and Blackwell datacenter compute revenue build to Singapore was for orders from U S based customers.

Colette Kress: Moving to gaming and AI PCs. Gaming revenue was a record $3.8 billion, increasing 48% sequentially and 42% year-on-year. Strong adoption by gamers, creatives, and AI enthusiasts have made Blackwell our fastest ramp ever. Against a backdrop of robust demand, we greatly improved our supply and availability in Q1 and expect to continue these efforts in Q2.

Colette Kress: Moving to gaming and AI Pcs.

Colette Kress: Gaming revenue was a record $3 8 billion, increasing 48% sequentially and 42% year on year strong adoption by gamers creators and AI enthusiasts have made blackwell, our fastest ramp ever against the backdrop of robust demand, we greatly improved our supply and availability in Q.

Colette Kress: One and expect to continue these efforts in Q2.

Colette Kress: AI is transforming PC and creator and gamers. With a 100 million user installed base, GeForce represents the largest footprint for PC developers. This quarter, we added to our AI PC laptop offerings, including models capable of running Microsoft's CoPilot Plus. This past quarter, we brought Blackwell architecture to mainstream gaming with its launch of GeForce RTX 5060 and 5060 Ti, starting at just $299. The RTX 5060 also debuted in laptops starting at $1099, these systems that doubled the frame rate and slash latency. These GeForce RTX 5060 and 5060 Ti desktops, GPUs, and laptops are now available. In console gaming, the recently unveiled Nintendo Switch 2 leverages NVIDIA's neural rendering and AI technologies, including next-generation custom RTX GPUs with DLSS technology, to deliver a giant leap in gaming performance to millions of players worldwide.

Colette Kress: <unk> is transforming PC and creator and gamers with a 100 million user installed base G force represents largest footprint for PC developers. This quarter, we added to our AI PC laptop offerings, including models capable of running Microsoft.

Colette Kress: <unk> co pilot plus.

Colette Kress: This past quarter, we brought Blackwell architecture to mainstream gaming with its launch of G Force RPX 50, 60, and 50 60 times starting at just $299.

Colette Kress: Dr. T X 56. He also debuted in laptop starting at $1099. These systems that doubled the frame rate and slashed latency.

Colette Kress: These G force RPX $50 $60, 50, 60, Ti desktop Gpus and laptops are now available.

Colette Kress: And console gaming the recently unveiled and tenders switch two leverages and videos neuro rendering and AI technologies, including next generation custom <unk> Gpus with dialysis technology to liver a giant leap in gaming performance to millions of players worldwide.

Colette Kress: Nintendo has shipped over 150 million Switch consoles to date, making it one of the most successful gaming systems in history.

Colette Kress: Intend to his shipped over 150 million switch consoles to date, making it one of the most successful gaming systems and history.

Colette Kress: Moving to crow visualization. Revenue of $509 million was flat sequentially and up 19% year-on-year. Tariff-related uncertainty temporarily impacted Q1 systems. Demand for our AI workstations is strong and we expect sequential revenue growth to resume in Q2. NVIDIA DGX Spark and Station revolutionized personal computing by putting the power of an AI supercomputer in a desktop form factor DGX Spark delivers up to one petaflop of AI compute while DGX Station offers an incredible 20 petaflops and is powered by the GB300 supercharger. DGX Spark will be available in Calendar Q3 and DGX Station later this year. We have deepened Omniverse's integration and adoption into some of the world's leading software platforms, including Databricks, SAP, and Schneider Electric.

Colette Kress: Moving to Crow visualization revenue of $509 million was flat sequentially and up 19% year on year tariff related uncertainty temporarily impacted Q1 systems and demand for our <unk> workstations is strong and we expect sequential revenue growth to resume in Q2.

Colette Kress: Nvidia <unk> spark and station revolutionized personal computing by putting the power of an AI supercomputer in a desktop form factor.

Colette Kress: <unk> spark delivers up to one petaflops of AI compute or <unk> station offers an incredible 20 powerful petaflops and is powered by the GBP 300 Super Chip <unk>.

Colette Kress: <unk> will be available in calendar Q3, and <unk> station later this year.

Colette Kress: We have deepened omni versus integration and adoption into some of the world's leading software platforms, including data bricks.

Speaker Change: P and Snyder electric.

Colette Kress: New Omniverse blueprints such as Mega for at-scale robotic fleet management are being leveraged in Kion Group, Pegatron, Accenture, and other leading companies to enhance industrial operation. At COSMETEX, we showcased Omniverse's great traction with technology manufacturing leaders, including TSMC, Quanta, Foxconn, Pegatron. Using Omniverse, TSMC saves months in work by designing fabs virtually, Foxconn accelerates thermal simulations by 150x, and Pegatron reduced assembly line defects rates by 67%.

Speaker Change: New omni versus blueprint such as Mega four at scale Robotics fleet management are being leveraged and key on group <unk> Accenture and other leading companies to enhance industrial operations at <unk>, we showcased omni versus great traction with technology Matt.

Speaker Change: Factoring leaders, including TSMC Quanta, Fox Con <unk>, using omni versus TSMC saves months and work by designing Fabs virtually Fox Con accelerates thermal simulations by 150 acts and Peg <unk> reduced assembly line defect rates by.

Speaker Change: 67%.

Colette Kress: Lastly, with our automotive group, revenue was $567 million, down 1% sequentially, but up 72% year-on-year. Year-on-year growth was driven by the ramp of self-driving across a number of customers and robust end demand for NEVs. We are partnering with GM to build the next-gen vehicles, factories, and robots using NVIDIA AI, simulation, and accelerated computing. And we are now in the process of developing a new product solution for Mercedes-Benz, starting with the new CLA, hitting roads in the next few months.

Colette Kress: Lastly, with our automotive group revenue was $567 million down 1% sequentially, but up 72% year on year year on year growth was driven by the ramp of self driving across a number of customers and robust and demand for <unk>.

Colette Kress: We are partnering with GM to build the next gen vehicles factories and robots using Nvidia AI simulation and accelerated computing and we are now in production with our full stack solution for Mercedes Benz starting with the new CLA hitting rows in the next few months.

Colette Kress: We announced ISAAC Group N1, the world's first open, fully customizable foundation model for humanoid robots. enabling generalized reasoning and skill development. We also launched new open NVIDIA Cosmo World Foundation models. Leading companies include 1X, Agility Robot. Robotics, Figure AI, Uber, and Wabi. We've begun integrating Cosmos into their operations for synthetic data generation, while Agility Robotics, Bossa Dynamics, and XPEN Robotics are harnessing ISAAC simulation to advance their humanoid GE Healthcare is using the new NVIDIA ISAAC platform for healthcare simulation built on NVIDIA Omniverse and using NVIDIA Cosmos, the platform speeds development of robotic imaging and surgery systems. The era of robotics is here.

Colette Kress: We announced Isaac Groot and won the world's first opened fully customizable foundation model for whom humanoid robots.

Colette Kress: Enabling generalized reasoning and skill development. We also launched new open Nvidia Cosmo World Foundation models, leading companies include one ex agility robots.

Colette Kress: Robotics figure AI, Uber and Robbie we've begun integrating cosmos into their operations for synthetic data generation, while agility robotics also dynamics and ex pen robotics are harnessing Isaac simulation to advance their humanoid efforts.

Colette Kress: Health care is using the new Nvidia Isaac platform for health care simulation built on Nvidia omni versus and using Nvidia Cosmos, the platform's speed development of robotic imaging and surgery systems.

Colette Kress: The era of robotics is here billions of robots hundreds of millions of autonomous vehicles and hundreds of thousands of robotic factories and warehouses will be developed.

Colette Kress: Billions of robots, hundreds of millions of autonomous vehicles, and hundreds of thousands of robotic factories and warehouses will be developed.

Colette Kress: Alright, moving to the rest of the P&L. GAAP gross margins and non-GAAP gross margins were 60.5% and 61% respectively, excluding the $4.5 billion charge. Q1 non-GAAP gross margins would have been 71.3, slightly above our outlook at the beginning of the quarter. Sequentially, GAAP operating expenses were up 7% and non-GAAP operating expenses were up 6%, reflecting higher compensation and employee growth. Our investments include expanding our infrastructure capabilities and AI solutions, and we plan to grow these investments throughout the fiscal year.

Speaker Change: Alright, moving to the rest of the P&L GAAP gross margins and non-GAAP gross margins were 65% and 61% respectively. Excluding the $4 5 billion charge Q1, non-GAAP gross margins would have been 71, three slightly below above our outlook at the beginning of the quarter.

Colette Kress: <unk>.

Colette Kress: Sequentially GAAP operating expenses were up 7% and non-GAAP operating expenses were up 6%, reflecting higher compensation and employee growth. Our investments include expanding our infrastructure capabilities in AI solutions and we plan to grow these investments throughout the fiscal year.

Colette Kress: In Q1, we returned a record $14.3 billion to shareholders in the form of share repurchases and cash dividends. Our capital return program continues to be a key element of our capital allocation strategy.

Colette Kress: In Q1, we returned a record $14 3 billion to shareholders in the form of share repurchases and cash dividends or capital return program continues to be a key element of our capital allocation strategy.

Colette Kress: Let me turn to the outlook for the second quarter. Total revenue is expected to be $45 billion, plus or minus 2%. We expect modest sequential growth across all of our platforms. In data center, we anticipate the continued ramp of Blackwell to be partially offset by a decline in China revenue.

Colette Kress: Let me turn to the outlook for the second quarter total revenue is expected to be 45 billion plus or minus 2%. We expect modest sequential growth across all of our platforms and data center. We anticipate the continued ramp of Blackwell to be partially offset by a <unk>.

Colette Kress: Decline in China revenue.

Colette Kress: Note, our outlook reflects a loss in H20 revenue of approximately $8 billion for the second quarter. GAAP and non-GAAP gross margins are expected to be 71.8% and 72% respectively, plus or minus 50 basis points. We expect better Blackwell profitability to drive modest sequential improvement in gross margins. We are continuing to work towards achieving gross margins in the mid-70s range late this year.

Colette Kress: Note our outlook reflects a loss in H 'twenty revenue of approximately $8 billion for the second quarter.

Colette Kress: GAAP and non-GAAP gross margins are expected to be 71.8% and 72%, respectively, plus or minus 50 basis points, we expect better Blackwell profitability to drive modest sequential improvement in gross margins, we are continuing to work towards achieving gross margins.

Colette Kress: In the mid Seventy's range late this year.

Colette Kress: GAAP and non-GAAP operating expenses are expected to be approximately $5.7 billion and $4 billion, respectively, and we continue to expect full-year fiscal year 26 operating expense growth to be in the mid-30 percent range. GAAP and non-GAAP other income and expenses are expected to be an income of approximately $450 million, excluding gains and losses from non-marketable and publicly held equity security.

Colette Kress: GAAP and non-GAAP operating expenses are expected to be approximately $5 7 billion and 4 billion, respectively, and we continue to expect full year fiscal year 'twenty six operating expense growth to be in the mid 30% range.

Colette Kress: GAAP and non-GAAP other income and expenses are expected to be an income of approximately $450 million, excluding gains and losses from non marketable and publicly held equity securities.

Colette Kress: GAAP and non-GAAP tax rates are expected to be 16.5%, plus or minus 1%, excluding any discrete items. Further financial details are included in the CFO commentary and other information available on our IR website, including a new financially information AI agent.

Colette Kress: GAAP and non-GAAP tax rates are expected to be 16, 5% plus or minus 1%, excluding any discrete items.

Colette Kress: Further financial details are included in the CFO commentary and other information available on our IR website, including a new financially information AI agent let.

Colette Kress: Let me highlight upcoming events for the financial community. We will be at the B of A Global Technology Conference in San Francisco on June 4th, the Rosenblatt Virtual AI Summit and NASDAQ Investor Conference in London on June 10th, and GTC Paris at VivaTech on June 11th in Paris. We look forward to seeing you at these events.

Colette Kress: Let me highlight upcoming events for the financial community, we will be at the Bofa Global Technology Conference in San Francisco on June four at <unk>.

Colette Kress: Rosenblatt virtual AI summit, and NASDAQ Investor Conference in London on June 10th and GTC Paris at V of attack on June 11th and Paris, We look forward to seeing you at these events.

Colette Kress: Our earnings call to discuss the results of our second quarter of Fiscal 2026 is scheduled for August 27.

Colette Kress: Our earnings call to discuss the results of our second quarter of fiscal 2026 is scheduled for August 27.

Jensen Huang: Well, now let me turn it over to Jensen to make some remarks. Thanks, Colette. We've had a busy and productive year.

Colette Kress: I will now let me turn it over to Jensen to make some further remarks.

Jensen: Thanks Colette.

Colette Kress: We've had a busy and productive year.

Jensen Huang: Let me share my perspective on some topics we're frequently asked. on Export Control. China is one of the world's largest AI markets. and a springboard to global success. with half of the world's AI researchers based there. The platform that wins China is positioned to lead globally. Today?

Speaker Change: Let me share my perspective on some topics we're frequently asked.

Speaker Change: On export control.

Speaker Change: China is one of the worlds largest mortgage.

Speaker Change: And a springboard to global success with.

Speaker Change: With half of the world's AI researchers base there.

Speaker Change: The platform that <unk>, China is positioned to lead globally.

Speaker Change: Today.

Jensen Huang: However, the $50 billion China market is effectively closed to U.S. industry. The H20 export ban ended our Hopper data center business in China. We cannot reduce Hopper further to compli As a result, we are taking a multi-billion dollar write-off on inventory that cannot be sold or repurposed. We are exploring limited ways to compete, but Hopper is no longer an option. China's AI moves on with or without U.S. chips. It has to compute to train and deploy advanced models. The question is not whether China will have... It already does. The question is whether one of the world's largest AI markets will run on American platforms. Shielding Chinese chipmakers from U.S.

Speaker Change: However, the $50 billion, China market is effectively closed to U S industry.

Speaker Change: The H 'twenty export ban and at our Hopper of data center business in China.

Speaker Change: We cannot reduce hopper further to comply.

Colette Kress: As a result, we are taking a multibillion dollars write off on inventory that cannot be sold or repurposed.

Colette Kress: We are exploring limited ways to compete.

Colette Kress: But hopper is no longer an option.

Colette Kress: China's AI moves on with or without U S chips.

Colette Kress: It has the compute to train and deploy advanced models.

Colette Kress: Question is not whether China will have.

Colette Kress: It already does.

Colette Kress: Question is whether one of the worlds largest markets will run on American platforms.

Colette Kress: Shielding Chinese chipmakers from U S competition, only strengthened them abroad and weakened Americas position.

Jensen Huang: competition only strengthens them abroad and weakens America's position. Export restrictions have spurred China's innovation and scale. The AI race is not just about chips. It's about which stack the world runs on. as that stack grows to include 6G and quantum. U.S. Global Infrastructure Leadership is at stake. The U.S. has based its policy on the assumption that China cannot make AI chips. That assumption was always questionable, and now it's clearly wrong. China has enormous manufacturing capability. In the end, the platform that wins the AI developers, win AI, wins AI. Export controls should strengthen U.S. platforms, not drive half of the world's A.I.

Colette Kress: Export restrictions have spurred China's innovation and scale.

Speaker Change: <unk> is not just about chips.

Speaker Change: Which stack the world runs off.

Speaker Change: As that stag grows to include six GM quantum.

Colette Kress: U S global infrastructure leadership is at stake.

Colette Kress: The U S. S based its policy on the assumption that China cannot make AI chips.

Colette Kress: That assumption was always questionable and now it's clearly wrong.

Colette Kress: China has enormous manufacturing capability.

Speaker Change: Indian the platform the Wednesday, AI developers when AI Wednesday on.

Colette Kress: Export controls should strengthen U S platforms, not drive half of the world's AI talent to rivals.

Jensen Huang: talent to rival. on DeepSea. DeepSeek and QN from China are among the most among the best open source AI models. released freely, they've gained traction across the US, Europe and beyond. DeepSeek R1, like ChatGPT, introduced reasoning AI that produces better answers the longer it thinks. Reasoning AI enables step-by-step problem solving, planning, and tool use. Turning Models into Intelligent Agents. Reasoning is compute-intensive, requires hundreds to thousands more thousands of times more tokens per task than previous one-shot implementations. Reasoning models are driving a step function surge in inference demand. AI scaling laws remain firmly intact, not only for training, but now inference, too, requires massive scale compute.

Colette Kress: On deep seek.

Colette Kress: Deep sea in Q1.

Colette Kress: From China are among the most.

Colette Kress: Among the best open source in our models.

Colette Kress: Released freely they've gained traction across the U S Europe and beyond.

Colette Kress: Deep CCAR, one like chat GPT introduced reasoning AI that produces better answers the longer and things.

Colette Kress: Reasoning AI enables step by step problem solving planning and tool use.

Colette Kress: Tony models into intelligent agents.

Colette Kress: Reasoning as compute intensive.

Colette Kress: Requires hundreds to thousands more.

Colette Kress: Thousands of times more tokens.

Colette Kress: Protest.

Colette Kress: When previous one shot in fluids.

Colette Kress: Reasonably models are driving a step function surge and influence demand.

Colette Kress: AI scaling laws remains firmly intact not only for training, but now <unk> II requires massive scale compute.

Jensen Huang: DeepSeek also underscores the strategic value of open source AI. When popular models are trained and optimized on U.S. platforms, it drives usage, feedback, and continuous improvement. reinforcing American leadership across the stack. U.S. platforms must remain the preferred platform for open-source AI. That means supporting collaboration with top developers globally, including in China. America wins when models like DeepSeek and QN runs best on American infrastructure.

Colette Kress: Deep seek also underscores the strategic value of open source AI.

Colette Kress: When popular models are trained and optimized on U S platforms, it drives usage feedback and continuous improvement.

Colette Kress: Reinforcing American leadership across the stock.

Colette Kress: U S platforms much must remain the preferred platform for open source AI.

Colette Kress: That means supporting collaboration with top developers globally, including in China.

Colette Kress: America wins when models like deep seek in Q1 runs best on American infrastructure.

Jensen Huang: Regarding onshore manufacturing President Trump has outlined a bold vision to reshore advanced manufacturing. Create Jobs and Strengthen National Security. Future plants will be highly computerized and robotic. We share this vision. TSMC is building six fabs and two advanced packaging plants in Arizona to make chips for NVIDIA. Process qualification is underway with volume production expected by year-end. Spill and Amcor are also investing in Arizona, constructing packaging, assembly, and test facilities. In Houston, we're partnering with Foxconn to construct a million square foot factory to build AI supercomputers. Wistron is building a similar plant in Fort Worth, Texas.

Speaker Change: Regarding onshore manufacturing.

Speaker Change: President Trump has outlined a bold vision to reassure advanced manufacturing.

Speaker Change: Create jobs and strengthen national security.

Speaker Change: Future plants will be highly computerized robotics.

Speaker Change: We share this vision.

Speaker Change: TSMC is building six fabs and to advanced packaging plants in Arizona to make chips for Nvidia.

Speaker Change: Process qualification is underway with volume production expected by year end.

Speaker Change: Spill and Amcor are also investing in Arizona constructing packaging assembly and test facilities.

Speaker Change: In Houston, we're partnering with Foxconn to construct a million square foot factory to build AI supercomputers.

Speaker Change: With strong is building a similar plant in Fort worth Texas.

Jensen Huang: To encourage and support these investments, we've made substantial long-term purchase commitments, a deep investment in America's AI manufacturing future. Our goal, from chip to supercomputer. Built in America. Within a year. each GB200 and Beelink 72 rack. contains 1.2 million components. and weighs nearly two tons. No one has produced supercomputers on this scale. Our partners are doing an extraordinary job.

Speaker Change: To encourage and support these investments we've made substantial long term purchase commitments.

Speaker Change: Deep investment in Americas, AI manufacturing future.

Speaker Change: Our goal.

Speaker Change: From chip.

Speaker Change: <unk> supercomputer.

Speaker Change: In America within a year.

Speaker Change: Each GBP 200 MB linked 72 racks.

Speaker Change: Contains $1 2 million components.

Speaker Change: And weighs nearly two times.

Speaker Change: No. One has produced supercomputers on this scale our partners are doing an extraordinary job.

Jensen Huang: on AI Diffusion Rules. President Trump rescinded the AI diffusion rule, calling it counterproductive, and proposed a new policy to promote U.S. AI tech with trusted partners. On his Middle East tour, he announced historic investment. I was honored to join him in announcing a 500 megawatt AI infrastructure project in Saudi Arabia. and a 5 gigawatt AI campus in the UAE. President Trump wants U.S. tech to lead. The deals he announced are wins for America. Creating Jobs, Advancing Infrastructure, Generating Tax Revenue, and Reducing the U.S. Trade Deficit. The U.S. will always be NVIDIA's largest market and home to the largest installed base of our infrastructure.

Speaker Change: On AI diffusion rule.

Speaker Change: President Trump rescinded the AI diffusion rule, calling it counterproductive and proposed a new policy to promote use AI tech with trusted partners.

Speaker Change: On his middle East tour, he announced historic investments.

Speaker Change: I was honored to join him and announcing a 500 megawatt AI infrastructure project in Saudi Arabia.

Speaker Change: A five gigawatt AI campus.

Speaker Change: In the UAE.

Speaker Change: President Trump once U S tech to lead.

Speaker Change: The deals he announced our wins for America, creating jobs advancing infrastructure generating tax revenues and reducing the U S trade deficit.

Speaker Change: The U S will always be NVIDIA's largest market and home to the largest installed base of our infrastructure.

Jensen Huang: Every nation now sees AI. as core to the next industrial revolution. a new industry that produces intelligence and essential infrastructure for every economy. Countries are racing to build national AI platforms to elevate their digital capabilities.

Speaker Change: Every nation Lcs AI.

Speaker Change: As core to the next industrial Revolution.

Speaker Change: A new industry that produces intelligence and essential infrastructure for every economy.

Speaker Change: Countries are racing to build national AI platforms to elevate their digital capabilities.

Jensen Huang: at Computex. We announced Taiwan's first AI factory in partnership with Foxconn and the Taiwan government. Last week, I was in Sweden to launch its first national AI infrastructure. Japan, Korea, India, Canada, France, the UK, Germany, Italy, Spain, and more are now building national AI factories to empower startups, industries, and societies. Sovereign AI is a new growth engine for NVIDIA.

Speaker Change: At <unk>.

Speaker Change: We announced Taiwan's first AI factory in partnership with Fox Con in the Taiwan government.

Speaker Change: Last week I was in Sweden to launch its first national AI infrastructure.

Speaker Change: Japan, Korea, India, Canada, France, the UK, Germany, Italy, Spain.

Speaker Change: And more are now building national factories to empower startups industries and societies solved.

Speaker Change: Sovereign AI is a new growth engine for Nvidia.

Toshiya Hari: Toshiya, back to you, thank you.

Speaker Change: <unk> back to you. Thank you.

Operator: Operator, we will now open the call for questions. Would you please pull for questions? Thank you. At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.

Speaker Change: Operator, we will now open the call for questions would you please poll for questions.

Speaker Change: Thank you at this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad well pause for just a moment to compile the Q&A roster.

Joe Moore: Your first question comes from the line of Joe Moore with Morgan Stanley. Your line is open. Great, thank you. You guys have talked about this scaling up of inference around reasoning models for, you know, at least a year now. And we've really seen that come to fruition, as you talked about, we've heard it from your customers. Can you give us a sense for how much of that demand, you know, you're able to serve? And give us a sense for maybe how big the inference business is for you guys?

Speaker Change: Your first question comes from the line of Joe Moore with Morgan Stanley. Your line is open.

Joe Moore: Great. Thank you.

Speaker Change: You guys have talked about the scaling up of influence around reasoning models for at least a year now and we've really seen that come to fruition as you talked about we've heard it from your customers can you give us a sense for how much of that demand you're able to serve and give us a sense for maybe how big the <unk> business is for you guys and do we need full.

Jensen Huang: And, you know, do we need full on NBL 72 rack scale solutions for reasoning inference going forward? Well, we would like to serve all of it. and I think we're on track to serve most of it.

Speaker Change: On NPL 72 rack scale solutions for reasoning in France going forward.

Speaker Change: While we would like to serve all of it.

Speaker Change: And.

Speaker Change: And I think we're on track to serve most of it.

Speaker Change: But.

Jensen Huang: Grace Blackwell. NVLink 72 is the ideal engine today. The ideal computer, thinking machine, if you will, for reasoning AI. There's a couple of reasons for that. The first reason is that the token generation amount, the number of tokens reasoning goes through is a hundred, a thousand times more. then a one-shot chatbot. You know, it's essentially thinking to itself, breaking down a problem step by step. It might be planning multiple paths to an answer. It could be using tools. reading PDFs, reading webpages, watching videos. and then producing a result, an answer. The longer it thinks, the better the answer, the smarter the answer is.

Blackwell: <unk> Blackwell.

Speaker Change: And be linked 72 is the ideal engine today.

Speaker Change: The ideal computer thinking machine, if you will for reasoning AI.

Speaker Change: There's a couple of reasons for that.

Speaker Change: The first reason is that the.

Speaker Change: The token generation.

Speaker Change: Amount the number of tokens reasoning goes through.

Speaker Change: 101000 times more.

Speaker Change: Then a one shot chatbot.

Speaker Change: And it's essentially thinking to itself breaking down a problem step by step.

Speaker Change: It might be planning multiple.

Speaker Change: <unk> to an answer.

Speaker Change: It could be using tools.

Speaker Change: Leading pdfs reading web pages.

Speaker Change: Watching videos.

Speaker Change: And and then producing a result, an answer.

Speaker Change: The the longer it thinks the better be answered the smartest of the answer is.

Jensen Huang: And so. What we would like to do, and the reason why Grace Blackwell was designed to give such a giant step up in inference performance, is so that you could do all this and still get a response as quickly as possible. Compared to Hopper. Grace Blackwell is some 40 times. higher speed and throughput. Compare. And so this is going to be a huge, huge benefit in driving down the cost while improving the quality of response with excellent quality of service at the same time. So that's the fundamental reason, that was the core driving reason for Grace Blackwell and VLink72.

Speaker Change: And so.

Speaker Change: While we would like to do.

Speaker Change: And the reason why gross Blackwell was designed to give such a giant step up in inference performance.

Speaker Change: So that you can do all this and still get a response as quickly as possible.

Speaker Change: Compared to Hopper.

Grace Blackwell: Grace Blackwell Awesome 40 times.

Grace Blackwell: Higher speed and throughput.

Grace Blackwell: Compare and so on.

Speaker Change: This is going to be a huge huge benefit and driving down the cost while.

Speaker Change: Improving the quality of response.

Speaker Change: With excellent quality of service at the same time.

Speaker Change: So that's that's really fundamental reason those are core driving reason for Grace Blackwell and billing 72 of course of course in order to do that we had to reinvent literally redesigned the entire.

Jensen Huang: Of course, in order to do that, we had to reinvent, literally redesign the entire way that these supercomputers are built. and and but now we're in full production it is it's a it's going to be exciting it's going to be incredibly exciting.

Speaker Change: The way that these supercomputers are built.

Speaker Change: And and.

Speaker Change: But now we're in full production.

Speaker Change: It is it's a it's going to be exciting is going to be incredibly excited.

Vivek Arya: The next question comes from Vivek Arya with Bank of America Securities. Your line is open. Thanks for the question. Just a clarification for Colette first. So on the China impact, I think previously it was mentioned at about $15 billion. So you had the $8 billion in Q2. So is there still some left as a headwind for the remaining quarters? Just Colette, how to model that?

Speaker Change: The next question comes from Vivek Arya with Bank of America Securities. Your line is open.

Vivek Arya: Thanks for the question just a clarification for Colette first so on the China impact I think previously it was mentioned that at about $15 billion. So you had the $8 billion. In Q2. So is there still some left as a headwind for the remaining quarters describe how to model.

Colette Kress: And then question, Jensen, for you. Back at GTC, you had outlined a path towards almost a trillion dollars of AI spending over the next few years. Where are we in that build-out? And do you think it's going to be uniform that you will see every spender, whether it's ESP, sovereign enterprises, or build-out, should we expect some periods of digestion in between? What are your customer discussions telling you about how to model growth for next? Yes, Vivek, thanks so much for the question regarding H20. Yes, we recognized 4.6 H20 in Q1. We were unable to ship two and a half billion.

Speaker Change: And then question Jensen for you back at GTC, you had outlined a path towards almost a trillion dollars of AI spending over the next few years, where are we in that Buildout and do you think it's going to be uniform that you will see every.

Vivek Arya: Spender, whether TSB sovereigns enterprises are albeit out should we expect some periods of digestion in between.

Vivek Arya: What are your customer discussions telling you about how to model growth for next year.

Spender: Yes, vivek. Thanks, so much for the question regarding H 'twenty, Yes, we recognized $4 six H 'twenty in Q1, we were unable to ship two and a half million. So the total for Q1 should have been $7 billion.

Colette Kress: So the total for Q1 should have been seven billion. When we look at our Q2, our Q2 is going to be meaningfully down in terms of China data center revenue. And we had highlighted in terms of the amount of orders that we had planned for H20 and Q2. And that was $8 billion. Now going forward, we did have other orders going forward that we will not be able to fulfill. That is what was incorporated, therefore, in the amount that we wrote down of the $4.5 billion. That write-down was about inventory and purchase commitments. And our purchase commitments were about what we expected regarding the orders that we had received.

Spender: When we look at our Q2 or Q2 is going to be meaningfully down in terms of China data Center revenue and we had highlighted in terms of the amount of orders that we had planned.

Spender: Planned for H 'twenty in Q2, and that was $8 billion now going forward. We did have other orders going forward.

Spender: On.

Spender: That we will not be able to fulfill that is what was incorporated therefore and the amount that we wrote down of the $4 six.

Spender: $4 $5 billion that write down was.

Spender: About inventory and purchase commitments in our purchase commitments were about what we expected regarding the orders that we had received going forward, though it's.

Colette Kress: Going forward, though, it's a bigger issue regarding the amount of the market that we will not be able to serve. We assess that TAM to be close to about $50 billion in the future as we don't have a product to enable for the China. In fact, the probably the best way to think through it is that AI is several things, you know, of course, we know that AI is this incredible technology that's going to transform. every industry, you know, from of course the way we do software to to healthcare and financial services to, you know.

Spender: The bigger issue regarding the amount of the market that we will not be able to serve.

Spender: We assess that Tam to be close to about $50 billion.

Spender: In the future as.

Spender: As we don't have a product to enable for the China.

Spender: Yeah.

Spender: But in fact the.

Spender: Probably the best way to think through it is that AI is several things.

Spender: We know that AI is.

Spender: This incredible technology, that's going to transform.

Spender: Every industry.

Spender: From.

Spender: Of course, the way, we do software too.

Spender: To our health care and financial services too.

Colette Kress: Retail to I guess every industry, transportation, manufacturing. and we're at the beginning of that. But maybe another way to think about that is where do we need intelligence? Where do we need digital intelligence? And every country is in every industry. And we know because of that, we recognize that AI is also an infrastructure. It's a way of developing a technology, delivering a technology that requires factory. and these factories produce tokens. and they, as I mentioned, are important to every single industry in every single country. And so on that basis, we're really at the very beginning of it, because the adoption of this technology is really kind of in its early, early stages.

Spender: <unk>.

Spender: Retail.

Spender: Two two.

Spender: I guess every industry transportation manufacturing.

Spender: And and we're at the beginning of that.

Spender: But maybe maybe another way to think about that is is where do we need intelligence, where do we need digital intelligence and.

Spender: Every countries in every industry.

Spender: And we know we know.

Spender: Because of that we recognize that AI is also an infrastructure.

Spender: It's a it's a way of developing a technology delivering a technology that requires factories.

Spender: And these factories produce tokens.

Spender: And as I mentioned our <unk>.

Spender: Important to every single industry in every single country.

Spender: And so on that basis, we're really at the very beginning of it because the adoption of this technology is really kind of in this early early stages.

Colette Kress: Now we've reached an extraordinary milestone with AIs that are reasoning, are thinking, what people call inference time scaling. You know, of course, it created a whole new. We've entered an era where inference is going to be a significant part of the compute workload. But anyhow, it's going to be a new infrastructure. And we're building it out in the clouds. The United States is really the early starter and available in U.S. clouds. And this is our largest market, our largest installed base. And we can continue to see that happening. But beyond that. We're going to have to, we're going to see AI go into enterprise, which is on-prem because so much of the data is still on-prem, access control is really important.

Spender: Now we've reached an extraordinary milestone.

Spender: With that Ah reasoning our thinking.

Spender: What people call inference time scaling.

Spender: And of course it.

Spender: Created a whole new.

Spender: We enter an era, where we're inference is going to be.

Spender: A significant part of the compute workload.

Spender: But anyhow, that's going to be a new infrastructure.

Spender: And we're building it out in the clouds.

Spender: Nine stages is really the the.

Spender: Early starter and available in U S clouds, and this is our largest market our largest installed base and we'll continue to see that happening.

Spender: But beyond that.

Spender: We're going to have to we're going to see AI go into enterprise, which is on prem because so much of the data still on Prem access control is really important.

Colette Kress: It's really hard to move all of every company's data into the cloud. And so we're going to move AI into the enterprise. And you saw that we announced a couple of really exciting new products. Our RTX Pro enterprise AI server that runs everything enterprise and AI. Our DGX Spark and DGX Station, which is designed for developers who want to work on-prem. And so enterprise AI is just taking off. Telcos. Today, a lot of the Telco infrastructure will be in the future software defined and built on AI. And so 6G is going to be built on AI.

Spender: It's really hard to to move all of every company's data into the cloud and so we're going to move AI into the enterprise and you saw that we announced a couple of really exciting new products.

Spender: Our <unk> pro.

Spender: Enterprise AI server that runs everything enterprise Nai.

Spender: Our our <unk> station, which is designed for.

Spender: Developers want to work on Prem and so enterprise AI is is just taking off.

Spender: Telcos.

Spender: Today, a lot of the telco infrastructure.

Spender: We'll be in the future software defined and built on AI and so <unk> is going to be bolt on AI.

Colette Kress: and that infrastructure needs to be built out and it's very, very early stages. And then, of course, every factory today that makes things will have an AI factory that sits with them. and the AI factory is going to be drive creating AI and and operating AI for the factory itself but also to power the products and the things that are made by the factory so it's very clear that every car company will have AI factories and very soon there'll be robotics companies, robot companies and those companies will be also building AIs to drive the robot.

Spender: And that infrastructure needs to be built out and we said, it's very very early stages.

Spender: And then of course every factory today that makes things.

Spender: We'll have an AI factory that sits with it.

Spender: And the AI factory is going to be.

Spender: Drive, creating AI in and operating AI for the factory itself, but also to powered the products and the things that are made by the factories. So it's very clear that every car company will have AI factories.

Spender: Very soon there'll be robotics companies will buy companies and those companies will be.

Spender: Also building AI to drive the robots.

Colette Kress: And so we're at the beginning of all of this buildup.

Spender: So we're at the beginning of all of this build out.

CJ Muse: The next question comes from CJ Muse with Cantor Fitzgerald. Your line is open. Yeah, good afternoon. Thank you for taking the question. There have been many large GPU cluster investment announcements in the last month, and you alluded to, you know, a few of them with Saudi Arabia, the UAE. And then also, you know, we've heard from Oracle and XAI, just to name a few. So my question, are there other that have yet to be announced of the same kind of scale and magnitude? And perhaps more importantly, how are these orders impacting your lead times for Blackwell and your current visibility sitting here today, you know, almost halfway through 2025?

Speaker Change: The next question comes from C. J Muse with Cantor Fitzgerald. Your line is open yes.

Speaker Change: Yes, good afternoon, and thank you for taking the question.

Speaker Change: There've been many large GPU cluster of investment in our announcements in the last month and you alluded to.

Spender: Few of them with Saudi Arabia UAE.

Spender: Then also you know we've heard from Oracle on X AI just to name a few so my question are there other.

Spender: I have yet to be announced of the same kind of scale and magnitude in and perhaps more importantly, how are these orders impacting your lead times for Blackwell and your current visibility is sitting here today almost halfway through 2025.

Jensen Huang: Well, we have more orders today than we did at the last time I spoke about orders at GTC. However, we're also increasing our supply chain. and building out our supply chain. They're doing a fantastic job. We're building it here on shore in the United States, but we're going to keep our supply chain quite busy for several, many more years coming. With respect to, with respect to, um, further announcements. I'm going to be on the road next week through Europe. And it's a Just about every country needs to build out AI infrastructure and their umpteen AI factories being planned.

Spender: While we have more orders today than we did at <unk>.

Spender: The last time I spoke about orders at GTC.

Spender: However, we're also increasing our supply chain.

Spender: And building out our supply chain, they're doing a fantastic job.

Spender: We're building it here onshore United States, but we're going to keep our supply chain quite busy for several many more years coming.

Spender: And.

Spender: With respect to with respect to them.

Spender:

Spender: Further announcements I'm going to be on the road next week through Europe and.

Spender: It's.

Spender: Just about every country needs to build out our infrastructure in there.

Spender: Sure.

Spender: <unk> AI factories.

Spender: <unk> been planned.

Jensen Huang: I think in the remarks Colette mentioned there's some a hundred AI factories being built there's a whole bunch that haven't been announced and I think the important concept here... which makes it makes it you know easier to understand is that like like other technologies that impact literally every single industry Of course, electricity was more, and it became infrastructure. Of course, the information infrastructure, which we now know as the internet, affects every single industry, every country, every society. Intelligence is surely one of those. I don't know any company, industry, country who who thinks that intelligence is optional.

Spender: I think I think.

Spender: In the remarks.

Joe Moore: Colette mentioned there is some 800 AI factories being built.

Spender: There's a whole bunch that haven't been announced.

Spender: And I think the important concept here.

Spender: And which makes it makes it.

Spender: Easier to understand.

Spender: Is that like.

Spender: Unlike other technologies that impact literally every single industry.

Spender: Of course electricity was warm and it became infrastructure.

Spender: Of course, the information infrastructure, which we now know as the Internet.

Spender: Every single.

Spender: Industry every country every society.

Spender: Intelligence is surely one of those things.

Spender: I don't know any company industry country, who who.

Spender: Two things that intelligence is optional.

Jensen Huang: It's essential infrastructure and so we've now Digitalized Intelligent and so I think we're clearly in the beginning of the build out of this infrastructure and Every country will have it. I'm certain of that. Every industry will use it. Dot, I'm certain. And what's unique about this infrastructure is that it needs back. you know it's a little bit like like the like the energy infrastructure electricity it needs factories we need factories to produce this intelligence and the intelligence is getting more sophisticated we were talking about earlier that we had a huge breakthrough in the last couple of years with reasoning AI and and now they're agents that reason and they're super agents that use a whole bunch of tools and then there's clusters of super agents where agents are working with agents solving problems and so you could just imagine compared to one-shot chat bots.

Spender: It's essential infrastructure and so we've now.

Spender: Digitalized intelligence.

Spender: And and so I think we're clearly in the beginning of our of the.

Spender: The build out of this infrastructure.

Spender: And.

Spender: Every every country will have it I'm certain of that every industry will use it that uncertainty.

Spender: What's unique about this infrastructure is that in each factories.

Spender: It's a little bit like like the like the energy infrastructure electricity and each factories, we need factories to produce this intelligence and the intelligence is getting more sophisticated we were talking about earlier.

Spender: We had a huge breakthrough in the last couple of years with reasoning AI and and now they're agents that reason in.

Spender: They're super agents that use a whole bunch of tools and then there's clusters of Super agents, where agents are working with agents solving problems and so you can just imagine.

Spender: Compared to one shot chat bots.

Jensen Huang: and the agents that are now using AI built on these large language models, how much more compute intensive they really need to be and are. And so I think we're in the beginning of the build out.

Spender: And the agents that are now using AI.

Spender: On these large language models, how much more compute intensive and they really need to be in our and so.

Spender: So I think we're in the beginning of the Buildout.

Jensen Huang: and there should be there should be many many more announcements.

Spender: There should be there should be many many more announcements in the future.

Speaker Change: Your next question. Your next question comes from Ben Reitzes with Melius. Your line is open.

Ben Reitzes: Your next question comes from Ben Reitzes with Melius. Your line is open. Yeah, hi, thanks for the question. I wanted to ask, you know, first to Colette, just a little clarification around the guidance and maybe putting it in a different way. You know, the $8 billion for H20 just seems like, you know, it's roughly $3 billion more than most people thought, with regard to what you'd be foregoing in the second quarter. So that would mean that, you know, with regard to your guidance, the rest of the business, you know, in order to hit $45 is doing $2 to $3 billion or so better.

Ben Reitzes: Yeah, Hi, thanks for the question.

Spender: I wanted to ask first to collect just little clarification around.

Spender: The guidance and maybe putting it in a different way.

Spender: The 8 billion for <unk> 'twenty, just seems like it's roughly $3 billion more than most people thought with regard to what you'd be foregoing.

Spender: In the second quarter, so that would mean that with regard to your guidance. The rest of the business in order to hit 45 is doing $2 billion to $3 billion or so better.

Colette Kress: So, you know, I was wondering if that math made sense to you. And then, you know, in terms of the guidance, that would that would imply the non-China business is doing a bit better than the street expected. So, you know, wondering, you know, what the primary driver was there, in your view, and then, you know, This second part of my question, you know, Jensen, I know you guide one quarter at a time. But with regard to the AI diffusion rule being lifted, and this momentum with sovereign, you know, there's been times in your history, where you've where you guys have said on calls like this, where, you know, you have more conviction and sequential growth throughout the year, etc.

Spender: So it.

Spender: Was wondering if that math made sense to you and then in terms of the guidance.

Spender: That would that would imply the non China business is doing a bit better than the street expected. So you know.

Spender: I'm wondering what the primary driver was there in your view and then.

Spender:

Spender: The second part of my question.

Speaker Change: Jensen I know you guide one quarter at a time, but.

Speaker Change: With regard to the AI diffusion rule being lifted.

Speaker Change: And this momentum was sovereign.

Speaker Change: There's been times in your history.

Speaker Change: Where you have where you guys have said on calls like this where.

Speaker Change: You have more conviction in sequential growth throughout the year et cetera.

Colette Kress: And given, given the unleashing of demand with AI diffusion, being, you know, revoked, and the supply chain increasing, you know, does the environment give you more conviction and sequential growth as we go throughout the year? So first one for Colette, and then next one for Jensen. Thanks. Thanks, Ben, for the question. When we look at our Q2 guidance and our commentary that we provided, that had the export controls not occurred, we would have had orders of about $8 billion for H20. That's correct. That was a possibility for what we would have had in our outlook for this quarter in Q2.

Speaker Change: Even given the unleashing of demand with AI diffusion being revoked and the supply chain increasing.

Speaker Change:

Speaker Change: It does it does the environment give you more conviction in sequential growth as we go throughout the year. So first one for Colette and then.

Speaker Change: Next one for Jensen, thanks, so much.

Speaker Change: Thanks, Ben for the question.

Speaker Change: When we look at our Q2 guidance and our commentary that we provided.

Speaker Change: That had the export controls not occurred we would have hard orders of about $8 billion for H 'twenty.

Speaker Change: That's correct that was.

Speaker Change: A possibility for what we would've had in.

Speaker Change: In our outlook for this quarter in Q2. So what we also have talked about here is the growth that we've seen and Blackwell.

Colette Kress: So what we also have talked about here is the growth that we've seen in Blackwell, Blackwell across many of our customers, as well as the growth that we continue to have in terms of supply that we need for our customers.

Speaker Change: Blackwell across many of our customers as well as the growth that we continue to have in terms of supply that we need for our customers. So putting those together, that's where we came through with the guidance that we provided.

Jensen Huang: So putting those together, that's where we came through with the guidance that we've I'm going to turn the rest over to Jensen to see how he wants to do it. Yeah, thanks. Thanks, Ben. I would say, compared to the beginning of the year, compared to GTC time, There are... for Positive surprises. The first positive surprise is the step function demand increase of Reasoning AI. I think it is fairly clear now that AI is going through an exponential growth. and Reasoning AI really bust it through. Concerns about about hallucination or its ability to really solve problems. I think a lot of people are crossing that barrier and realizing how incredibly effective agentic AI is.

Speaker Change: I'm going to turn the rest over to June 2015, <unk> yeah. Thanks.

Speaker Change: Thanks Brent.

Speaker Change: I would say compared to the beginning of the year compared to GTC timeframe.

Speaker Change: There are.

Speaker Change: Four.

Speaker Change: Positive surprises.

Speaker Change: The first positive surprise.

Speaker Change: It is.

Speaker Change: The step function demand increase of reasoning AI.

Speaker Change: I think it is fairly clear now.

Speaker Change: AI is going through an exponential growth.

Speaker Change: And reasoning AI really busted through.

Speaker Change: I.

Speaker Change: Concerns about.

Speaker Change: <unk>.

Speaker Change: Hallucination or it's.

Speaker Change: Its ability to to really solve problems.

Speaker Change: I think I think a lot of people are crossing that barrier and realizing how incredible incredibly effective a gentex <unk>.

Jensen Huang: and Reasoning AI. So number one is inference reasoning and the exponential growth there, demand growth. The second one, you mentioned AI diffusion. It's really terrific to see that the AI diffusion rule was rescinded. President Trump wants America to win, and he also realizes that we're not the only country in the race. And he wants the United States to win and recognizes that we have to get the American stack out to the world and have the world build on top of American stacks instead of alternatives. And so AI diffusion happened, the rescinding of it happened at almost precisely the time that countries around the world are awakening the importance of AI as an infrastructure, not just as a technology of great curiosity and great importance, but infrastructure for their industries and startups and society.

Speaker Change: And reasoning.

Speaker Change: So number one is inference reasoning.

Speaker Change: And.

Speaker Change: The exponential growth of their demand growth. The second one you mentioned AI diffusion.

Speaker Change: <unk>.

Speaker Change: It's really terrific to see.

Speaker Change: That <unk>.

Speaker Change: Diffusion rule was rescinded.

Speaker Change: President Trump wants America win.

Speaker Change: And he also realizes.

Speaker Change: That.

Speaker Change: That will.

Speaker Change: We're not the only.

Speaker Change: Our country and the race and.

Speaker Change: He wants he wants a United States to win and recognizes that we have to get the American stack out to the world and half the world build on top of American stacks.

Speaker Change: Stead of alternatives.

Speaker Change: And so.

Speaker Change: Diffusion.

Speaker Change:

Speaker Change: Happened.

Speaker Change: The resending of it happened at almost precisely the time that the countries around the world are awakening to the importance of AI as an infrastructure not just as the technology of great curiosity.

Speaker Change: And great importance, but infrastructure for their industries and startups in society.

Jensen Huang: Just as they had to build out infrastructure for electricity and internet, you got to build out an infrastructure for AI. I think that that's an awakening and that creates a lot of opportunity. The third is Enterprise AI, Agents Work. and agents are doing, these agents are really quite successful. Much more than generative AI, agentic AI is game-changing. You know, agents can understand ambiguous and rather implicit instructions and able to problem solve and use tools and have memory and so on. And so I think this is enterprise AI is ready to take off and it's taken us a few years to build a computing system that is able to integrate, run enterprise AI stacks, run enterprise IT stacks, but add AI to it.

Speaker Change: Just as they had to build out infrastructure for electricity and Internet you got to build out infrastructure for AI.

Speaker Change: Think that that's an awakening.

Speaker Change: And that creates a lot of opportunity.

Speaker Change: The third is enterprise AI agents work.

Speaker Change: And agents are doing these agents are really quite successful.

Speaker Change: Much more than generative AI a gen take AI is game changing.

Speaker Change: Hugh.

Speaker Change: Agents can understand ambiguous in.

Speaker Change: Rather rather.

Speaker Change: Implicit in.

Speaker Change: Instructions.

Speaker Change: Able to problem solve and use tools and have memory and and so on and so I think this is.

Speaker Change: Enterprise AI is ready ready to take often and it's taken us a few years to build a computer system that.

Speaker Change: That is able to integrate and run run enterprise AI stacks run enterprise it stacks, but add AI to it and this is the.

Jensen Huang: And this is the RTX Pro enterprise server that we announced at Computex just last week. And just about every major IT company has joined us and I'm super excited about that. And so computing is one part of it, but remember, enterprise IT is really three pillars. It's compute, storage, and networking. And we've now put all three of them together finally, and we're going to market with them. and then lastly, Industrial AI. Remember, one of the implications of the world reordering, if you will, is is Regence on-shoring manufacturing and building plants everywhere. In addition to AI factories, of course, there are new electronics manufacturing, chip manufacturing, being built around the world.

Speaker Change: RPX Pro Enterprise server that we announced at Computex.

Speaker Change: Just last week and just about every major.

Speaker Change: The company has joined US Super excited about that and so computing as one stat, one part of it but remember.

Speaker Change: Enterprise It is really three three pillars.

Speaker Change: Compute storage and networking and we've now put all three of them together for finally, and we're going to market with that.

Speaker Change: And then lastly, industrial AI.

Speaker Change: And remember.

Speaker Change: One of the implications of Av.

Speaker Change: The the World Reordering, if you will as.

Speaker Change: Is regions onshoring manufacturing and building plants everywhere in.

Speaker Change: In addition to AI factories of course.

Speaker Change: They're they're new electronics manufacturing chip manufacturing.

Speaker Change: Being built around the world.

Jensen Huang: And all of these new plants and these new factories are creating exactly the right time when Omniverse and AI and all the work that we're doing with is emerging. And so this fourth pillar is quite important. Every factory will have an AI factory associated with it. And in order to create these physical AI systems, you really have to train a vast amount of data. So back to more data, more training, more AIs to be created, more computers. And so these four drivers are really kicking into turbo.

Speaker Change: And all of these new plants and these new factories or.

Speaker Change: Creating exactly the right time, when when omnivorous in AI and all the work that we're doing it we're doing with robotics as is.

Speaker Change: Emerging and so so this this fourth pillars is a quite important every factory will have an AI factory associated with it.

Speaker Change: And in order to create these physical AI systems.

Speaker Change: You really have to train a vast amount of data. So so back to more data more training more AI has to be created more computers and so these four these four drivers are really kicking into turbocharge.

Timothy Arcuri: Your next question comes from Timothy Arcuri with UBS. Your line is open. Thanks a lot. Jensen, I want to ask about China. It sounds like the July guidance assumes there's no SKU replacement for the H20. But if the president wants the US to win, it seems like you're going to have to be allowed to ship something into China. So I guess I had two points on that.

Speaker Change: Your next question comes from Timothy Arcuri with UBS. Your line is open.

Timothy Arcuri: Thanks, a lot I am Jensen I wanted to ask about China. It sounds like the July guidance assumes there is no SKU replacement for the H 'twenty, but if the president wants to use to win it seems like youre going to have to be allowed to ship something into China. So I guess I had two.

Jensen Huang: First of all, have you been approved to ship a new modified version into China and you're currently building it, but you just can't ship it in fiscal Q2? And then you were sort of run rating $7 to $8 billion a quarter into China. Can we get back to those sorts of quarterly run rates once you get something that you're allowed to ship back into China? I think we're all trying to figure out how much to add back to our models and when. So whatever you can say there would be great. Thanks.

Speaker Change: Points on that first of all have you been approved to ship a new modified version into China and you are currently building it but you just can't ship. It in fiscal Q2, and then you were sort of run rating $7 billion to $8 billion a quarter into China can we get back to those sorts of quarterly run rates. Once you get something that you are allowed to ship back into China, I think we're all trying to figure out.

Speaker Change: How much to add back to our models and when so whatever you can say there would be great. Thanks.

Jensen Huang: The president has a plan. He has a vision, and I trust it. with respect to our export controls. It's a set of limits. and the new set of limits. Pretty much make it impossible for us to... Reduce hopper any further, you know, for any productive use.

Speaker Change: The President has a plan he has a vision and a trust them.

Speaker Change: With respect to with respect to <unk>.

Speaker Change: Our export controls.

Speaker Change: It's a it's a set of limits.

Speaker Change: And the new set of limits.

Speaker Change: A pretty pretty much make it impossible for us to two.

Speaker Change: Reduced hopper any further.

Speaker Change: If for any productive use.

Jensen Huang: and, and so The new limits, the new limits, you know, it's kind of the end of the road for We have some we have limited options and and and so we just the key is to to understand the limits The key is to understand the limits and see if we can come up with interesting products that could continue to serve the Chinese market. We don't have anything at the moment, but we're considering it, we're thinking about it. Obviously, the limits are quite stringent at the moment.

Speaker Change: And so.

Speaker Change: The new limits the new limits.

Speaker Change: It's kind of at the end of the road for Hopper.

Speaker Change: We have some we have limited options.

Speaker Change: So the key is to understand the limits.

Speaker Change: The key is to understand the limits and see if we can come up with with a with interesting products that could that could continue to serve the Chinese market.

Speaker Change: We don't have anything at the moment and but we're we're considering it we're thinking about it.

Speaker Change: Obviously, the limits are quite stringent at the moment.

Aaron Rakers: and we have nothing to announce today and when the time comes you know we'll engage the administration and discuss Your final question comes from the line of Aaron Rakers with Wells Fargo.

Speaker Change: And.

Speaker Change:

Speaker Change: We have nothing to announce today and when the time comes.

Speaker Change: Whoa Whoa.

Speaker Change: Engage the administration and discuss that.

Speaker Change: Your final question comes from the line of Aaron Rakers with Wells Fargo. Your line is open.

Unknown Attendee: Your line is open. Hi, this is Jake on for Aaron. Thanks for taking the question and congrats on the great quarter.

Speaker Change: Hi, This is Jake on for Aaron Thanks for taking the question and congrats on a great quarter.

Unknown Attendee: I was wondering if you could give some additional color around the strength you saw within the networking business, particularly around the adoption of your Ethernet solutions at CSPs, as well as any change you're seeing in network attach rates. Yeah, thank you for that. We now have three... Networking Platform. Maybe four. The first one, the first one is the scale up platform. to turn a computer into a much larger computer. Scaling up is incredibly hard to do. Scaling out is easier to do, but scaling up is hard to do. And that platform is called NVLink. and NVLink comes with chips and switches and, you know.

Speaker Change: Was wondering if you could give some additional color around the strength you saw within the networking business, particularly around the adoption of your Ethernet solutions at CSP as well as any change you're seeing in network attach rates.

Speaker Change: Yes, thank you for that.

Speaker Change: We now have three.

Speaker Change: Networking platforms.

Speaker Change: Maybe four.

Speaker Change: The first one the first one is the scale up.

Speaker Change: Platform to turn a computer into a much larger computer.

Speaker Change: Scaling up is incredibly hard to do scaling out is easier to do but scaling up is hard to do.

Speaker Change: And that platform is called <unk> link.

Speaker Change: And.

Speaker Change: N V link as is.

Speaker Change: It comes with it.

Speaker Change: <unk> and switches and.

Speaker Change: <unk>.

Jensen Huang: NVLink Spines, and it's really complicated. But anyways, that's our new platform. Scale-Up Plan. In addition to InfiniBand, we also have SpectrumX. We've been fairly consistent that Ethernet was designed for a lot of traffic that are independent. but in the case of AI, you have a lot of computers working together. and the traffic of AI is insanely bursty. Latency matters a lot because the AI is thinking and it wants to get work done as quickly as possible. And you got a whole bunch of nodes working together. And so we enhanced Ethernet, added capabilities like extremely low latency, congestion control, adaptive routing, the type of technologies that were available only in InfiniBand to Ethernet.

Speaker Change: And believes spines and it's really complicated but anyway, that's our new platform.

Speaker Change: Scale up platform.

Speaker Change: In addition to Infiniband, we also have spectrum X we've been.

Speaker Change: Fairly fairly consistent that Ethernet was designed for.

Speaker Change:

Speaker Change: A lot of traffic that are independent.

Speaker Change: But.

Speaker Change: In the case of AI, you have a lot of computers working together.

Speaker Change: And the traffic of AI is.

Speaker Change: Insanely bursty latency matters a lot.

Speaker Change: Because the AI is thinking and it wants to get work done as quickly as possible and you got a whole bunch of nodes working together.

Speaker Change: And so we enhanced <unk>.

Speaker Change: Enhanced Ethernet.

Speaker Change: Added capabilities like extremely low latency congestion control adaptive routing the type of technologies that were available only in infiniband.

Speaker Change: To Ethernet.

Jensen Huang: And as a result, we improved the utilization of Ethernet in these clusters. These clusters are gigantic from as low as 50% to as high as 85%, 90%. and so the difference is if you had a cluster that's 10 billion dollars and you improve its effectiveness by 40%, that's worth $4 billion. It's incredible.

Speaker Change: And as a result, we improved the utilization of Ethernet in these clusters. These clusters are gigantic.

Speaker Change: As low as 50% to as high as 85% 90%.

Speaker Change: And and so the difference is if you had a cluster thats $10 billion.

Speaker Change: And you improved its effectiveness by 40% that's worth $4 billion.

Speaker Change: It's incredible.

Jensen Huang: And so SpectrumX has been really, quite frankly, a homerun, and this last quarter, as we said in the prepared remarks, we added two very significant CSPs to the SpectrumX adoption. And then the last one, the last one is BlueField, which is our control plane. And so in those four, the control plane of the network, which is used for storage, is used for security and for many of these clusters that want to achieve Isolation among its users, multi-tenant clusters, and still be able to use and have extremely high performance, bare metal performance, BlueField is ideal for that and is used in a lot of these cases.

Speaker Change: And so spectrum X has been really quite frankly, a homerun and.

Speaker Change: This last quarter as.

Speaker Change: We said in the in the prepared remarks, we added.

Speaker Change: Two very significant csp's two the spectrum X.

Speaker Change: Adoption.

Speaker Change: And then the last one the last one is bluefield, which is our control plane and so and those for those the control plane a network, which is used for storage is used for.

Speaker Change: Security and.

Speaker Change: For many of these clusters that want to achieve.

Speaker Change: <unk>.

Speaker Change: Isolation, among its users multi tenant clusters and still be able to use.

Speaker Change:

Speaker Change: And have extremely extremely high performance bare metal performance.

Speaker Change: Bluefield is ideal for that and is used in a lot of detail a lot of these cases.

Jensen Huang: So we have these four networking platforms. They're all growing. And we're doing really well. I'm very proud of it. Thank you.

Speaker Change: And so we have these four for networking platforms. They are all growing and.

Speaker Change: And what we're.

Speaker Change: We're doing really well and very proud of the team.

Speaker Change: It's already started and all the time we have taken.

Speaker Change: Vince and I will turn the call back to you.

Jensen Huang: This is the start of a powerful new wave of growth. Grace Blackwell is in full production. We're off to the race. We now have multiple significant growth engines. Inference, once the lighter workload, is surging with revenue-generating AI services. AI is growing faster and will be larger than any platform shifts before, including the internet, mobile, and cloud. Blackwell is built to power the full AI lifecycle from training frontier models to running complex inference and reasoning agents at scale. Training demands continues to rise with breakthroughs in post-training and like reinforcement learning and synthetic data generation. But inference is exploding.

Speaker Change: Thank you. This is the start of a powerful new wave of growth Grace Blackwell is in full production we're off to the races. We now have multiple significant growth engines inference. Once the lighter workload is surging with revenue generating AI services.

Speaker Change: It is growing faster and will be larger than any platform shifts before including the internet mobile and cloud.

Speaker Change: Blackwell is built to power the full AI lifecycle from training frontier models to running complex in France and <unk>.

Speaker Change: Reasoning agents at scale.

Speaker Change: Training demand continues to rise with breakthroughs and post training like reinforcement learning and synthetic data generation, but influence is exploding.

Jensen Huang: Reasoning AI agents require orders of magnitude more compute. The foundations of our next growth platforms are in place and ready to scale. Sovereign AI nations are investing in AI infrastructure like they once did for electricity and Internet. Enterprise AI. AI must be deployable on-prem and integrated with existing IT. Our RTX Pro, DGX Spark, and DGX Station Enterprise AI systems are ready to modernize the $500 billion IT infrastructure on-prem or in the cloud. Every major IT provider is partnering with us. Industrial AI from training to digital twin simulation to deployment, NVIDIA Omniverse and Isaac Groot are powering next generation factories and humanoid robotic systems worldwide.

Speaker Change: <unk> AI agents require orders of magnitude more compute.

Speaker Change: The foundations of our next growth platforms are in place and ready to scale sovereign.

Speaker Change: Nations are investing in our infrastructure like.

Speaker Change: A one step for electricity and Internet and.

Speaker Change: Enterprise AI AI must be deployable on prem and integrated with existing <unk>.

Speaker Change: <unk> Pro <unk> spark and <unk> enterprise AI systems are ready to modernize the $500 billion infrastructure on prem or in the cloud.

Speaker Change: Every major providers partnering with us.

Speaker Change: Industrial AI from training.

Speaker Change: Two digital twin simulation to deployment and video <unk> in the eyes of Groot are powering next generation factories, and humanoid robotics systems worldwide.

Jensen Huang: The age of AI is here, from AI infrastructures Inference at Scale, Sovereign AI, Enterprise AI, and Industrial AI. NVIDIA is ready.

Speaker Change: The age of AI is here from.

Speaker Change: From AI infrastructures.

Speaker Change: Inference at scale sovereign AI.

Speaker Change: Enterprise AI and industrial AI.

Speaker Change: Nvidia is ready.

Jensen Huang: Join us at GTC Paris.

Speaker Change: Join us at GTC, Paris, our keynote at <unk> on June 11, talking about quantum GPU computing.

Jensen Huang: I'll keynote at Vivatech on June 11, talking about quantum GPU computing.

Jensen Huang: Robotic Factories and Robots, and celebrate our partnerships building AI factories across the region.

Speaker Change: Robotic factories, and robots and celebrate our partnerships building factories across the region.

Jensen Huang: The NVIDIA band will tour France, the UK, Germany, and Belgium. Thank you for joining us.

Speaker Change: Nvidia band will tour, France, the UK, Germany and Belgium.

Speaker Change: Thank you for joining us.

Operator: at the earnings call today.

Speaker Change: At the earnings call today, so you're in Paris.

Operator: See you in Paris.

Operator: This concludes today's conference call.

Speaker Change: This concludes today's conference call you may now disconnect.

Operator: You may now disconnect.