On Wednesday, Nvidia Corp (NASDAQ:NVDA) CEO Jensen Huang pushed back on growing concerns that the world is heading toward an AI bubble, arguing that today's massive investments are rooted in a historic shift in how computing itself works.
Huang Breaks Down Why AI Demand Isn't Hype
Speaking at the U.S.-Saudi Investment Forum in Washington, D.C., alongside Tesla Inc. (NASDAQ:TSLA) and SpaceX CEO Elon Musk, Huang was asked the question everyone has been whispering: Are we in an AI bubble?
Huang didn't hesitate. Before answering directly, he urged the audience to "go back to first principles" of computer science to understand what's really happening.
The first thing, he said, is that Moore's Law — the decades-long trend of CPUs doubling in performance — has effectively run out of steam.
The demand for computing is skyrocketing, but general-purpose CPUs can't keep up, Huang said. This has pushed the world toward accelerated computing, powered by GPUs, a shift Nvidia has championed for more than 20 years.
He pointed to a striking data point: Just six years ago, CPUs powered 90% of the world's top 500 supercomputers. Today, that has fallen to less than 15%. The rest now run on GPUs.
Data Processing And Recommender Systems Are Driving the Shift
Huang then said that the world's largest computing workloads have quietly moved to GPUs — and none of it has anything to do with ChatGPT-style AI.
Banks, credit networks, e-commerce platforms and advertisers spend hundreds of billions of dollars annually on data processing alone, he said. Every name, address, age and transaction lives in a data frame — and computing those data frames fuels the economy," he stated.
Then there are recommender systems, which Huang called "the engine of the internet today." From social feeds to shopping suggestions, nearly every digital experience relies on algorithms that already run on GPUs.
Agentic AI Is Just the Layer On Top
Only after this foundational shift comes the explosion of agentic AI, including models from OpenAI, xAI, Anthropic and Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google.
"If you take that into consideration, you’ll come to the conclusion that, in fact, what is left over to fuel that revolutionary agentic AI is not only substantially less than you thought and all of it justified," he stated.
Peter Thiel's Nvidia Exit Adds Fuel To Growing Concerns
Earlier this month, billionaire Peter Thiel drew attention after unloading his entire stake in Nvidia, the company widely seen as the backbone of the generative AI boom.
He also slashed his position in Tesla, reflecting rising unease that machine intelligence may be advancing faster than expected.
His move follows a string of other notable sell-offs, adding to the growing sense of investor anxiety.
Michael Burry, the famed "Big Short" investor, also sounded the alarm, arguing that today's "Cloud then AI buildout" has triggered a capital spending surge on par with the Dot-Com and housing-market extremes.
Meanwhile, AI spending is accelerating rapidly, with U.S. tech giants on track to pour nearly $400 billion into capital expenditures this year and total AI investment projected to reach $5.2 trillion by 2030, according to McKinsey.
Nvidia places in the 98th percentile for Growth and the 92nd percentile for Quality in Benzinga's Edge Stock Rankings, highlighting its standout performance against industry peers.
Photo Courtesy: jamesonwu1972 from Shutterstock
Read Next:
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
