Nvidia CEO Jensen Huang Says the New ChatGPT Needs '100 Times More' of His Company's AI Chips Nvidia reported its fourth-quarter earnings after the bell on Wednesday.

By Sherin Shibu Edited by Melissa Malamut

Key Takeaways

  • Nvidia CEO Jensen Huang says it takes 100 times more computing power to support next-generation AI that can reason through problems.
  • This means it could take up to 100 times more Nvidia AI chips to create a reasoning AI, increasing demand for Nvidia’s products.
  • Nvidia reported strong fourth-quarter earnings, with its Blackwell AI chip driving $11 billion in revenue.

There's a steep cost to reasoning AI, or AI that can provide a step-by-step breakdown of its thought process along with a response.

Nvidia CEO Jensen Huang told CNBC on Wednesday that next-generation AI models capable of reasoning through problems before arriving at an answer, such as ChatGPT 4o and Grok 3, require "100 times more" computing power, or as much as 100 times the number of Nvidia's AI chips than older AI models.

This results in increased demand and higher sales for Nvidia's AI chips, which sell for up to $70,000 each, to support those reasoning capabilities. Nvidia holds between 70% to 95% of the market for AI chips.

"We're just at the beginning of the reasoning AI era," Huang told CNBC following the AI chipmaker's fourth-quarter earnings report. "All of these reasoning AI models now need a lot more compute than what we're used to."

Related: DeepSeek AI Cost Less Than $6 Million to Develop. Here's Why Meta and Microsoft Are Justifying Spending Billions.

In the interview, Huang touted high demand for Nvidia's Blackwell AI chip, which had revenues of $11 billion in the fourth quarter, the first quarter it was out. Nvidia's data center revenues, which power AI systems for companies like Meta, Microsoft, and Amazon, almost doubled from last year to reach $35.6 billion — and Huang says the growth is set to continue.

"This year's capital investment for data centers is so much greater than last year's," Huang told CNBC.

Meta and Microsoft, which are some of Nvidia's biggest clients, have already committed billions of dollars this year to spending on AI infrastructure like data centers. Meta stated it would spend up to $65 billion on AI while Microsoft said it would spend $80 billion.

Nvidia CEO Jensen Huang. Photo by Patrick T. Fallon / AFP via Getty Images

Nvidia beat Wall Street estimates on Wednesday with its latest earnings report. The AI giant reported that quarterly revenue increased 78% to $39.33 billion compared to a year earlier. Revenue was higher than Wall Street estimates of $38.05 billion.

In the earnings call, Nvidia's chief financial officer Colette Kress reiterated Huang's message about the increased computing power, and corresponding Nvidia AI chips, required to fuel reasoning AI.

"Long-thinking, reasoning AI can require 100 times more compute per task compared to one-shot inferences," Kress told investors.

Nvidia is the second biggest company in the world, with a market cap of over $3.1 trillion at the time of writing.

Related: 'Everybody Wants to Be First': Nvidia CEO Says Demand for Its Blackwell AI Chip Is 'Insane'

Sherin Shibu

Entrepreneur Staff

News Reporter

Sherin Shibu is a business news reporter at Entrepreneur.com. She previously worked for PCMag, Business Insider, The Messenger, and ZDNET as a reporter and copyeditor. Her areas of coverage encompass tech, business, strategy, finance, and even space. She is a Columbia University graduate.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

ChatGPT's New Update Can Create PowerPoint Presentations and Excel Spreadsheets for You

The new AI agent can generate Google Sheets and slide decks, making it a powerful new office tool.

Side Hustle

How to Build Endless Passive Income With This Simple Online Hustle

Autopilot stores aren't just income streams. They are passports to freedom, flexibility and finally working and living on your own terms.

Side Hustle

This 29-Year-Old's Side Hustle Brought People 'to the Dark Green Side.' It Made $10,000 Within 2 Days and Sees 6 Figures a Month.

Nikki Seaman began work on her business when the pandemic led to grocery store shutdowns.

Business News

Here's How the CEO of the Biggest Bank in the U.S. Spends His Downtime: 'This Gives Me Purpose in Life'

JPMorgan CEO Jamie Dimon, 69, recently said that his top three priorities are his family, his country, and his purpose, which is working at the bank — in that order.

Business News

Elon Musk's xAI Is Hiring Engineers for Its Anime 'AI Companions' — With Salaries Up to $440,000 a Year

xAI launched a set of "AI companions" earlier this week, with a third on the way.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.