Data centers become Nvidia’s biggest business area

The Data centers are already the largest area of ​​business for Nvidia, thus surpassing the gaming sector, in which the company was focused when it was created almost 30 years ago. But this has not happened by chance, but is the result of a worked strategy, and Nvidia’s investment plans. All thanks to the new types of platforms that Nvidia has been spawning since the early Tesla GPU computing engines and the CUDA development environment.

These platforms, which have led to the establishment of Nvidia as an accelerator for the simulation and modeling of high-performance computing, and the evolution of Artificial Intelligence inference and training from image identification to the manipulation of various types of data, to the creation of new information impossible to achieve with conventional programming, it may just be the beginning. Nvidia has its sights set, like other technology companies, on creating immersive worlds of the metaverse that will go over physical reality.

In the short term, there may be frustrating reactions to the company’s expected second quarter fiscal 2023 results, as the company forecasts revenue of $8.1 billion. This probably won’t surprise many either because of the war in Ukraine and the new lockdowns in China, but it matters little if you look to the future of the company. Nvidia still has a very strong gaming business, but now also a very strong data center division, and is moving into the world of general purpose computing with its ARM Grace server chips.

Also, thanks to the Mellanox purchase, it has a range of DPUs and interfacing that can compare in importance to the GPU and CPU computing engines it had. And of course, it sells systems and clusters, as well as the components that OEMs and ODMs need to build their own.

In the quarter that ended on May 1, Nvidia’s total revenue rose 46.4% to $8.29 billion but its net income fell 15.4% to $1.62 billion. Especially for a charge of 1.35 billion dollars that Nvidia had to pay to ARM for its failed purchase attempt. Of course, it may only be a small price to pay for the focus that Nvidia will have from now on, much more focused. In addition, they have 20,340 million dollars in the bank, and a target market of about 450,000 million dollars.

In the first quarter of this fiscal year for the company, Nvidia’s data center division had sales of $3.75 billion dollars, 83.1% more. Meanwhile, gaming only grew by 31.2%. up to 3,620 million dollars. Still, yes, it is early to say if data centers will continue to be Nvidia’s main business area from now on, or if gaming will overtake it again, It depends a lot on the nature and timing of the competition the company in both markets. Also how Nvidia behaves in the development of a broader and more comprehensive portfolio of data center products, which among other things will include CPUs.

Of the quarterly data center revenue, $2.14 billion likely went to hyperscalar and cloud developers, up 105%. As for the area that deals with other clients, which include the world of education, governments, the company and other service providers, grew 60% to 1,610 million dollars.

There is no doubt that heto Nvidia’s networking division it’s higher now than it was when it closed the Mellanox purchase two years ago, but it’s unclear exactly how much. May account for 15% of total income of the company, and approximately a third of those of data centers, but it is not possible to specify more. Yes, it can be known that the Networks and computing division had sales of 3,670 million dollars in the quarter, 66.2% more, while the graphics division increased its revenues by 33.8%, to 4,620 million dollars. Dollars.

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