Jensen Huang is Nvidia’s Chief Revenue Destruction Officer

Is Nvidia Blackwell So Hot That Nobody Wants Hopper?

At this year’s GTC event in San Jose, Nvidia CEO Jensen Huang held over 25,000 people in the palm of his hand, captivated by his vision of AI and how it could transform the world we live in. Some folks in the audience couldn’t keep up and started fiddling with their phones.

The Rise of Blackwell

Jensen half-jokingly said nobody should buy a Hopper GPU now that Blackwell is in full production, playing the role of what he called the company’s "Chief Revenue Destruction Officer." He noted the frustration his sellers would feel upon hearing his advice. Investors did not appreciate his sarcasm either, and the stock is down 2.6% since GTC25 kicked off. However, according to Jensen, AI inference requires 100 times more computing now than a year ago, thanks mainly to the introduction of "reasoning" and agentic AI.

The New Token Boom

In fact, these trends, coupled with incredibly dense infrastructure and software revenue, are creating a new Token Boom that Jensen will harvest as a new revenue boom, in spite of the product churn.

Is Hopper Still Relevant?

While Blackwell is amazingly fast, with up to 40 times more tokens/second for inference, it also requires significant data center power and water cooling upgrades for the AI Factories Jensen is pushing. However, Hopper may be just fine for many AI developers for now. Nvidia has already shipped nearly three times the number of Blackwell GPUs compared to all Hopper chips in 2024. There is no doubt now that the $11B of Blackwell-based systems Nvidia shipped in Q4 is the start of a new demand cycle.

The Importance of Disclosure

Moving to an annual product cycle creates tension, but disclosing the roadmap is essential to prepare the supply chain and ecosystem for the next two years of innovation. No data center can power an 800 Kilowatt rack required for Rubin Ultra today, but they will need to power and cool the beast if they want to remain competitive when Nvidia starts shipping its future racks.

Nvidia Dynamo: Another Defensive Moat?

When the rest of the industry is trying to match (unsuccessfully) Nvidia GPU performance, Nvidia is optimizing the entire AI factory. The new Dynamo "AI Factory OS" and Co-packaged optical networking are two examples.

The Updated Nvidia Hardware Roadmap

Here’s the new Nvidia GPU lineup through 2028. The annual increase in computing power, memory, and networking should be awe-inspiring, but the audience at GTC seemed to have expected nothing less from the company that practically reinvented computing.

Co-Packaged Optical Photonic Scale-out

My colleague Jim McGregor of Tirias Research has already covered this innovation in Forbes, so I won’t belabor the point. The bottom line is that these co-packaged optics were not expected to be ready by any vendor for another couple years. Now Nvidia will ship CPO networking for scale-out to millions of GPUs later this year.

Conclusion

Nvidia is transitioning to its future place in the industry as THE foundational AI company. Jensen showed slides from many large enterprise clients that made this point; each had green icons with up to a dozen Nvidia Inference Micro-Services (NIMS) modules and hardware embedded in their AI stacks; once these green icons are in there, they won’t come out easily.

FAQs

Q: What is Nvidia’s plan for the future of AI?
A: Nvidia is transitioning to its future place in the industry as THE foundational AI company, with a focus on AI inference and scale-out.

Q: Will Hopper still be relevant?
A: While Blackwell is amazingly fast, with up to 40 times more tokens/second for inference, it also requires significant data center power and water cooling upgrades for the AI Factories Jensen is pushing. However, Hopper may be just fine for many AI developers for now.

Q: What is the new Token Boom?
A: The new Token Boom is a result of the trends, coupled with incredibly dense infrastructure and software revenue, creating a new revenue boom for Nvidia.

Disclosures

This article expresses the opinions of the author and is not to be taken as advice to purchase from or invest in the companies mentioned. My firm, Cambrian-AI Research, is fortunate to have many semiconductor firms as our clients, including Baya Systems, BrainChip, Cadence, Cerebras Systems, D-Matrix, Esperanto, Flex, Groq, IBM, Intel, Micron, NVIDIA, Qualcomm, Graphcore, SImA.ai, Synopsys, Tenstorrent, Ventana Microsystems, and scores of investors. I have no investment positions in any of the companies mentioned in this article. For more information, please visit our website at https://cambrian-AI.com.