The boss of Nvidia, the near-$5 trillion chipmaker behind the artificial intelligence boom, sought to allay fears over the soaring valuations among big technology companies amid fresh warnings that “bubbles” are building up in global equity markets.
Jensen Huang, founder and chief executive of Nvidia, told The Times: “We are all in a bubble, the question is where are you in that phase? I believe we’re in the beginning of the build-out. It just happens to be with very large numbers.”
Huang, who was in London to receive the Queen Elizabeth Prize for Engineering from the King, dismissed concerns that stock markets are on the verge of a correction, arguing that the impact of AI on the eco…
The boss of Nvidia, the near-$5 trillion chipmaker behind the artificial intelligence boom, sought to allay fears over the soaring valuations among big technology companies amid fresh warnings that “bubbles” are building up in global equity markets.
Jensen Huang, founder and chief executive of Nvidia, told The Times: “We are all in a bubble, the question is where are you in that phase? I believe we’re in the beginning of the build-out. It just happens to be with very large numbers.”
Huang, who was in London to receive the Queen Elizabeth Prize for Engineering from the King, dismissed concerns that stock markets are on the verge of a correction, arguing that the impact of AI on the economy would be so large “that these numbers in percentage pale in comparison”.
He said that vast investment was needed to modernise computer infrastructure, asserting that AI is “effective and profitable, which is the reason why everybody is accelerating their build-out of artificial intelligence.
“When something is profitable, people want to make more of it. This is applying to every single technology company and every single computer company so that we can build into the AI era. This is just the beginning.”
Nvidia became the first company to pass the $5 trillion milestone last week, its valuation lifted as a wave of multibillion-dollar deals among semiconductor manufacturers, data centre providers and the AI companies they power.
Its shares began the week with a sharp fall and, after a brief mid-week bounce, continued to decline ending Wednesday down $3.48, or 1.8 per cent, at $195.21, valuing the business at $4.75 trillion.
Huang, who was also presented with the Professor Stephen Hawking Fellowship by Lucy Hawking, daughter of Stephen Hawking, during his visit to The Cambridge Union, said that Nvidia’s valuation “reflects the work that we do and the impact on the number of industries”.
“Ultimately, AI is the first technology in history that has the opportunity to directly benefit a hundred trillion dollars of the world’s economy,” he added.
Huang also told the Financial Times that China would “win the AI race” due to lower energy costs and looser regulation.
The International Monetary Fund and the Bank of England have both warned about the broader economic impact if there is a stock market correction, defined as a 10 per cent fall from the most recent peak.
Borge Brende, the head of the World Economic Forum, joined those urging caution on Wednesday. “We could possibly see bubbles moving forward. One is a crypto bubble, second an AI bubble, and the third would be a debt bubble,” he said.
Brende added that AI offered the possibility of big productivity gains but could also threaten many white-collar jobs.
“What you could see, worst case, is that there is a ‘Rust Belt’ in those big cities that have a lot of back offices with white-collar workers that can more easily be replaced by this AI and increased productivity,” Brende said, citing recent job cut announcements from companies such as Amazon and Nestlé.
“We also know from history that technological changes over time lead to increased productivity, and productivity is the only way over time to increase prosperity,” he added. “Then you can pay people better salaries, and you have more prosperity in society.”