NVIDIA Results and Blackwell DeepSeek Success Showcase AI Concerns About NVIDIA Were Unfounded

NVIDIA just reported financials that showcase stunning growth in the AI space despite earlier concerns that DeepSeek’s emergence represented some kind of existential threat to the company. This position of weakness was never well founded given DeepSeek ran on older NVIDIA hardware because of U.S. rules denying the sale of more modern technologies to companies in China.

Historically, NVIDIA has been very good with backward compatibility, so it should have been a given that DeepSeek would run on Blackwell, NVIDIA’s premier AI processor, but for some reason, this conclusion wasn’t widely held. This was unfortunate for NVIDIA and in error because DeepSeek will now run on Blackwell. Again, the delay appears to have more to do with the shipping restrictions placed on Blackwell, not any technical shortcoming.

Let’s talk about the interesting things in NVIDIA’s earnings report this week.

Kicking Butt with AI

Despite the above concerns, NVIDIA had a solid quarter with 16% quarter-over-quarter growth and 93% growth year-over-year to a whopping $115.2B in the datacenter mostly focused on AI. NVIDIA reaffirmed its involvement in the massive U.S. Stargate project and that its sales ramp was in virtually every one of the cloud providers.

One of the more interesting areas of advancement is in genomics with the new capability of being able to map genomes from scratch. This is potentially a game changer for medical care. If you can rapidly map a person’s genome, you should be better able to prescribe drugs and remedies that uniquely match the individual being analyzed. Calculations on length of life, things to avoid, and either future or unseen problems that need to be addressed become far more viable. This one thing could massively improve healthcare for many. In small as well as huge ways, NVIDIA’s technology is improving the world around us.

Robotics and Autonomous Cars

NVIDIA’s robotic and automotive efforts, which have pivoted from just driver displays and interfaces to full AI control, appear to be increasing up to 103% year-over-year, and a whopping 27% in just the last quarter ($1.7B total). However, much of this segment is still in the “proof of concept stage,” which it appears to be passing, meaning that this segment should ramp near vertically sometime in the next two years as approvals are achieved for automotive and manufacturing ramps up for the robots. $1.7B in a segment that isn’t anywhere near mature is an amazing number, suggesting the potential for this market may be far larger than PCs, smartphones and datacenters combined.

One risk is that the sanctions against China are forcing that country to develop competing technology, and China appears to be ramping faster than the rest of the world. The major concern is that as China moves ahead of the rest of the world in terms of autonomous cars in particular, these sanction tactics could backfire badly on NVIDIA and U.S. technology leadership as they appear to be forcing China to move more aggressively than otherwise would have been the case.

Wrapping Up

NVIDIA is executing sharply in the face of head winds that are coming mostly from U.S. sanctions, suggesting those sanctions are strategically ill advised. NVIDIA’s latest performance numbers and DeepSeek advancements indicate that DeepSeek technology concerns were not well founded, at least with regard to NVIDIA’s technological leadership, and that the company remains at the top of the AI advancement stack as of this writing.

The speed of AI and robotic advancement is unprecedented, and NVIDIA is riding that wave like an expert. It needs to be said that the only reason NVIDIA is so successful here is that its CEO, Jensen Huang, bet the company on AI way back in the early 2000s and again bet the company on Blackwell, NVIDIA’s latest AI superchip. Most CEOs these days are tactical and would be unwilling to make the bets Huang did and likely wouldn’t have the tenure to execute even if they did. This is a serious problem with the entire western technology industry. If it isn’t fixed, it is doubtful the West will retain technology leadership with advanced AI technologies or emerging technologies like quantum computing.