NVIDIA CEO Huang said these four positive surprises are ’turbocharging’ AI growth

Investing.com -- On NVIDIA’s (NASDAQ:NVDA) earnings conference call yesterday, CEO Jesen Huang described four positive surprises they have seen in AI since the beginning of the year and even since its GTC conference in March.

Huang said the first positive surprise is the step function demand increase of reasoning AI.

“I think it is fairly clear now that AI is going through an exponential growth, and reasoning AI really busted through,” Huang stated. “Concerns about hallucination or its ability to really solve problems, and I think a lot of people are crossing that barrier and realizing how incredibly effective agentic AI is and reasoning AI is. So number one is inference reasoning and the exponential growth there, demand growth.”

The second positive surprise is the revocation of the AI diffusion rule, or the set of regulations designed to control the global distribution of advanced AI technology.

“It’s really terrific to see that the AI diffusion rule was rescinded,” the CEO stated. “President Trump wants America to win, and he also realizes that we’re not the only country in the race. And he wants the United States to win and recognizes that we have to get the American stack out to the world and have the world build on top of American stacks instead of alternatives. And so AI diffusion happened, the rescinding of it happened at almost precisely the time that countries around the world are awakening to the importance of AI as an infrastructure, not just as a technology of great curiosity and great importance, but infrastructure for their industries and start-ups and society. Just as they had to build out infrastructure for electricity and Internet, you got to build out an infrastructure for AI. I think that’s an awakening, and that creates a lot of opportunity.”

Huang said the third positive surprise is enterprise AI.

“Agents work and agents are doing -- these agents are really quite successful, much more than generative AI,” he stated. “Agentic AI is game-changing. Agents can understand ambiguous and rather implicit instructions and able to problem solve and use tools and have memory and so on. And so I think this is -- enterprise AI is ready to take off. And it’s taken us a few years to build a computing system that is able to integrate and run enterprise AI stacks, run enterprise IT stacks but add AI to it. And this is the RTX Pro Enterprise server that we announced at Computex just last week. And just about every major IT company has joined us, super excited about that. And so computing is one stack, one part of it. But remember, enterprise IT is really three pillars: it’s compute, storage, and networking. And we’ve now put all three of them together for finally, and we’re going to market with that.”

The fourth positive surprise, according to Huang, is industrial AI.

“Remember, one of the implications of the world reordering, if you will, is a region’s onshoring manufacturing and building plants everywhere,” he stated. “In addition to AI factories, of course, there are new electronics manufacturing, chip manufacturing being built around the world. And all of these new plants in these new factories are creating exactly the right time when Omniverse and AI and all the work that we’re doing with robotics is emerging. And so this fourth pillar is quite important Every factory will have an AI factory associated with it. And in order to create these physical AI systems, you really have to train a vast amount of data. So back to more data, more training, more AIs to be created, more computers.”

Huang said these four drivers are “really kicking into turbocharge.”