(Bloomberg) — Shares of Nvidia Corp. slipped. on Tuesday after CEO Jensen Huang's wide-ranging product introduction failed to propel the artificial intelligence chipmaker to new heights.
Read More from Bloomberg
The stock fell 6.2% to $140.14 in New York, marking the biggest one-day decline in four months. Although Nvidia's latest announcements provide a positive view of the company's long-term prospects, there was not as much near-term upside as some investors had sought. “Today's Nvidia announcements are significant, but long tail,” Stifel Financial Corp. said. in a report.
Subscribe to the Bloomberg Daybreak podcast on Apple, Spotify or wherever you listen
Huang took the stage in a packed arena in Las Vegas to kick off the CES trade show on Monday and introduce the new line, offering a vision for how AI will spread throughout the economy. The company wants its products to be at the heart of the future technology world with a billion humanoid robots, 10 million automated factories, and 1.5 billion self-driving cars and trucks.
Interest in Nvidia's products — and Huang's prospects — has exploded as companies rush to deploy new AI computing tools. The CEO outlined Nvidia's products and strategy to his audience of hundreds for more than 90 minutes, including ties to Toyota Motor Corp. and MediaTek Inc. which sent their shares more than 3% higher.
Before Tuesday's retreat, Nvidia stock had more than tripled in the past 12 months. Asian suppliers, including Taiwan Semiconductor Manufacturing Co. and Hon Hai Precision Industry Co., also grew on optimism about Nvidia's prospects.
Chief Financial Officer Colette Kress said during a separate event that the AI transformation will continue to drive growth for the next 10 years. “It's going to be with us for the next decade and beyond,” he said Tuesday during a JPMorgan Chase & Co. talk that coincided with CES. “We still have a lot of future growth opportunities for us.”
During Huang's presentation on Monday, he also delivered news to his traditional audience: gamers. Nvidia is launching an update to its GeForce GPUs — short for graphics processing units — created with the same Blackwell design the company uses in its AI accelerators, Huang said.
The new GeForce 50 series cards will take advantage of Blackwell's ability to create even more realistic experiences for PC gamers, the company said. While traditional graphics chips build an image by calculating the shade of each pixel in the picture, the new technology will lean more heavily on AI to predict what the next frame should look like.
“GeForce allowed AI to reach the masses, and now AI is coming home to GeForce,” Huang said during the presentation.
The flagship RTX 5090 model will be available later this month for $1,999, with less powerful cards to follow later. The RTX 5070, which costs $549, will debut in February with better performance than the top model of the previous range, the RTX 4090, Nvidia said.
As recently as 2022, gaming was Nvidia's largest source of sales. Now the chipmaker's data center operation is much larger. It is on track to bring in more than $100 billion this year, as the company's accelerator chips are valued by the world's biggest tech companies. The next step is to roll out hardware and software to a wider range of business and government agencies, helping to diversify Nvidia's revenue.
Huang announced that Toyota, the world's largest vehicle manufacturer, is now a customer for Nvidia's autonomous driving AI products and will use its Drive chips and software. Toyota shares in Tokyo extended gains after the announcement.
Extending AI into more of the physical world will transform $50 trillion industries, Nvidia says. But the move will also bring challenges. Robots and cars will need software that can handle real-life complexities in a safe way. The company created Nvidia Cosmos to help make robots smarter and produce fully autonomous vehicles, Huang said.
Cosmos technology can create video from inputs such as text. That video then becomes the basis for virtual training, helping to reduce reliance on expensive and time-consuming real-world experimentation. The video produced can be searched and refined so that important but infrequent events – such as a car coming into contact with an emergency vehicle – can be experienced again and again.
Nvidia is also working with Uber Technologies Inc. to develop self-driving technology. The millions of trips that Uber handles every day will provide a database for training AI models.
Mass-market automakers are going to move toward using a single computer and operating system for their entire model line, rather than segmenting systems by vehicle class, Nvidia said. That transition will set the table for broader use of the chip designer's comprehensive offerings, the company believes. To speed that up, Nvidia products have been certified by government transport safety organizations.
Nvidia now also offers a desktop computer called Project Digits. The company is equipping the small $3,000 device with one Grace Blackwell Superchip – a combination of a central processor and a graphics semiconductor – working with a large chunk of memory and high-speed connectivity. The idea is to provide developers with hardware that can run very large AI models, ones that existing laptops will struggle to handle.
The new machines, developed in partnership with Taiwan's MediaTek, will run a version of the Linux operating system and are not designed for everyday use. Instead, they're meant to help AI developers work locally when either connecting to the cloud or using conventional computers isn't practical or possible.
Nvidia chose MediaTek to help them create the main chip for Digit because of that company's skills in making low-power semiconductors. The Taiwanese company will also offer products containing the technology to other customers, Huang said.
When asked if Project Digits indicates Nvidia wants to enter the PC market more broadly, Huang said the machine is intended for AI developers and students. But he also suggested that Nvidia is more interested in the sector.
“Obviously, we have plans,” he said during a briefing with financial analysts. “I'll have to wait to tell you about that.”
