Jensen Huang says he’s found a ‘brand new’ $200B market for Nvidia

Nvidia founder and CEO Jensen Huang is perhaps one of the greatest corporate hype men of all time when it comes to his company. He might even surpass Salesforce’s Marc Benioff when it comes to relentless optimism about his company’s future and earnings.

Yet he lives up to the hype quarter after quarter.

Rather than caution you to view the proclamation that he’s found a “brand new $200 billion TAM for Nvidia” with skepticism, I’d say he’s earned a little trust.

Huang positioned this huge new market at the foot of Nvidia’s new CPU product, Vera, which was introduced in March. During Wednesday’s earnings call — after Nvidia posted another record quarter with $81.6 billion in revenue and forecast $91 billion for the next quarter — Huang pitched Vera as a potentially transformative product. And one that already has promising sales figures.

But no matter how well Nvidia performs, Wall Street is concerned about what will dethrone Nvidia.

Lately, such fears have focused on the CPU. Nvidia is the GPU king, while the CPU markets have historically been owned by companies like Intel and AMD. (Nvidia has made CPUs before, of course, but that’s not its core business.)

Last month, for example, Amazon Web Services cheered a massive contract it signed with Meta for millions of Amazon’s own AI CPUs. Amazon CEO Andy Jassy has made it clear that he thinks AWS can make AI chips, both GPUs and CPUs, at least as good and possibly better than Nvidia.

But now, with the Vera CPU, which is sold separately and bundled with the Rubin GPU, Huang believes he has unlocked “an important new growth engine” for his company because Vera is, according to him, “the world’s first CPU purpose-built for agentic AI,” Huang said on the call.

“Vera is opening a brand new $200 billion TAM for Nvidia, a market we’ve never addressed before, and every major hyperscaler and system maker is working with us to deploy it. The world is rebuilding computers for agentic AI and robotic physical AI. Nvidia is at the center of these transitions,” said hype man Huang.

He explained that while the “thinking” part of an AI model uses GPUs, agents usually run on CPUs. They use CPUs to perform their assigned tasks and will, he predicts, use their own breed of CPU-powered PCs.

Vera is for agents because it is specifically designed to process tokens as quickly as possible. This is in contrast to classic cloud architecture CPUs that are designed with ‘cores’, or the ability to run multiple instances of apps as quickly as possible.

That makes sense, but with major cloud providers and startups pursuing AI chip development, why does he think Nvidia will be the best source for agentic CPUs?

Because, Huang says, Nvidia has already sold $20 billion worth of standalone Vera CPUs this year and we’re just getting started.

“The world has a billion users, human users. I feel like the world will have billions of agents, not today. I mean, we’ll grow into it, but we’ll have billions of agents, and those billions of agents will all use tools. And those tools will look like PCs, just like we humans use PCs today,” he said.

“We need a lot more CPUs,” he explained.