Hey, Nvidia – who loves you, and who do you love? A. Cloud giants

Cryptocurrency mining is another story, though

Nvidia's fortunes continue to rise, with the graphics card slinger reporting record revenue of $2.64bn, as well as rising profit, in its third quarter of the year.

CEO Jensen Huang said on Thursday that the growth was driven by its GPUs being used by top cloud providers, from Amazon Web Services, Google Cloud, Azure and Oracle in the US, to Baidu, TenCent and Alibaba in China, apparently.

A summary of the results for Q3, the three months to October 29, are as follows:

  • Revenues were $2.64bn, up 18 per cent from the previous sequential quarter, and up 32 per cent from this time a year ago. It beat Wall Street's estimates by $280m.
  • Net income was $838m, an increase of 44 per cent from the previous sequential quarter, and up 55 per cent cent year-on-year.
  • Operating income was $895m, up 30 per cent compared to Q2, and an increase of 40 per cent from this time last year.
  • Earnings per diluted share for the quarter were $1.33, an increase from $0.32 compared to the previous quarter, and a boost of $0.83 from last year, amounting to a 41 per cent rise. It also beat analysts' expectations by 26 cents.

Gaming-friendly graphics chips contributed to the majority of sales, bringing in $1.56bn, almost 60 per cent of total revenue and increase of 25.5 per cent year-over-year.

The second biggest area is its data center business, which more than doubled year-on-year to $501m on revenue, beating analysts’ predictions. Nv's most advanced Tesla Volta V100 chips were rolled out to data centers last month, with Amazon as the first customer.

Meanwhile, sales of chips for automotive equipment is up 13 per cent, year on year, to $144m, professional visualization hardware is up 15 per cent to $239m, and OEM and tech licensing is up three per cent to $191m.

Huang said in an earnings conference call with analysts that the cloud giants were using its GPUs mostly for internal deep-learning projects and external hosting services. Nvidia provides an integrated hardware and software stack geared towards optimizing training and inference in AI across different frameworks, he said. Its kit is used by the biggest companies including Google, Facebook, Amazon and Baidu.

There was a drop from the cryptocurrency mining sector, though. For this quarter, it contributed about $70m, a fall of more than 50 per cent from $150m last quarter. The price of cryptocurrencies like Bitcoin and Ethereum are climbing as coins become more difficult to mine. It also doesn’t help that other companies are developing custom ASIC chips tailored towards crafting new currencies. Huang said that in the future cryptocurrency would remain “a small but non-zero” part of Nvidia’s business.

He also believes that areas of AI will continue to grow and to contribute to Nvidia’s success. At the moment, around 25 companies use its GPU-powered autonomous car platform called Drive, which includes specialized hardware and supercomputing capabilities to develop computer-controlled vehicles.

The chip biz recently announced Pegasus, an updated computing platform that will supposedly propel the development of fully autonomous cars to a Level 5 capability.

Not much is known about Pegasus. It is powered by four high-performance AI processors and includes two of NVIDIA's Xavier system-on-a-chip processors, as well as an embedded Volta GPU, and “two next-generation discrete GPUs with hardware created for accelerating deep learning and computer vision algorithms,” it said in a previous blog post.

“Everything that moves will be autonomous one day,” Huang concluded. ®

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