Nvidia CEO Jensen Hunag has an important message for the investors who are concerned about the ballooning capital expenditures of tech giants such as Google, Amazon, Microsoft and Meta.As reported by CNBC, Huang said that this spending is not reckless, in fact it is the fuel needed for a self-reinforcing AI revolution. Speaking at the Asia-Pacific Economic Cooperation (APEC) CEO Summit, Huang described the current phase of artificial intelligence development as a “virtuous cycle,” where improvements in AI models drive more usage, which in turn attracts more investment and accelerates innovation. “The virtuous cycle of AI has been designed, and this is the reason why you’re seeing the world’s capex going so fast,” Huang said
Capex surge, strategic bet
As reported by CNBC, the major tech firm have come together and committed hundred of billions of dollars to build out AI infrastructure which includes data centrism chips and software platforms.The development of AI infrastructure has sparked investor anxiety over returns and sustainability. But Huang believes that this spending is not only justified but is also essential.He compared the present scenario to the early days of internet or cloud computing, where upfront investment paved way for exponential growth. Nvidia, whose chips power much of the AI boom, has seen demand surge as companies race to deploy generative AI across industries.
The AI flywheel effect
The ‘virtuous cycle’ concept explained by Huang hinges on a feedback loop:Huang further added the loop is now in full motion and the infrastructure being created today will support the decade-long transformation for global computing.
Nvidia’s role and market confidence
Nvidia made history on October 29 as the first company ever to reach a $5 trillion market valuation. The company reached $5 trillion in market value just over three months after crossing $4 trillion, suggesting accelerating momentum in AI adoption across industries.According to CNBC, shares of the Santa Clara, California-based chipmaker rose more than 4%, pushing its market capitalisation past the threshold and cementing its position at the centre of the global AI boom.Reports say that there have been several factors that propelled Nvidia’s rise. CEO Jensen Huang recently announced that Nvidia expects $500 billion in AI chip orders, reflecting demand for the company’s processors.Nvidia also revealed plans to build seven new supercomputers for the US government.Under Huang’s leadership, the company’s H100 and Blackwell processors have become the engines powering large-language models behind tools like ChatGPT and Elon Musk’s xAI. Meanwhile, the company has also invested over $100 billion in strategic partnerships with firms including OpenAI, Intel and, most recently, Nokia.
