Jensen Huang says he's found a 'brand new' $200B market for Nvidia

Nvidia founder and CEO Jensen Huang is known for his unwavering optimism about his company's future, and he's done it again. On the company's recent earnings call, Huang revealed that he's found a "brand new $200 billion TAM" for Nvidia, thanks to its new CPU product, Vera. This bold claim may raise some eyebrows, but Huang has earned a degree of trust with investors by consistently delivering on his promises.

Huang introduced Vera in March, and it's been making waves in the tech industry. The CPU is designed specifically for agentic AI, which Huang believes is a major new growth driver for Nvidia. He explained that while GPUs handle the "thinking" part of AI models, agents rely on CPUs to perform their assigned tasks.

Vera is optimized for processing tokens quickly, making it an attractive solution for companies looking to deploy AI agents. The market for AI chips is heating up, with major cloud providers like Amazon Web Services (AWS) and startups pursuing their own chip development. AWS CEO Andy Jassy has expressed confidence that his company can develop AI chips that are at least as good as, if not better than, Nvidia's.

However, Huang remains confident that Nvidia will be the go-to source for agentic CPUs. He pointed to the company's already impressive sales figures, with $20 billion worth of standalone Vera CPUs sold this year alone. Huang's vision for the future of AI is one where billions of agents will need their own CPUs, much like humans use PCs today.

"The world has a billion users, human users," he said. "My sense is that the world is going to have billions of agents, not today. I mean, we're going to grow into it, but we'll have billions of agents, and those billions of agents will all use tools.

And those tools are going to be like PCs, just like us humans using PCs today." With Vera, Huang believes Nvidia is poised to sit at the center of this emerging market. Nvidia's stock has been on a tear, with the company posting a record-breaking quarter with $81.6 billion in revenue and forecasting $91 billion for the next quarter. While Wall Street may have some anxiety about what could knock Nvidia from its perch, Huang's enthusiasm for Vera and the emerging agentic AI sector is undeniable.

As the tech industry continues to evolve, one thing is clear: Nvidia is playing a significant role in shaping the future of AI. With Vera, Huang believes his company has unlocked a major new growth driver, and investors will be watching closely to see if he can deliver on his ambitious promises.