Nvidia's upcoming second-quarter earnings report is expected to serve as a gauge for the sustainability of the artificial intelligence (AI) industry boom.
According to industry sources, Nvidia will announce its second-quarter results after the U.S. stock market closes on August 26. The market anticipates revenue of around $92 billion, representing an increase of over 90% compared to the same period last year and marking a record high for the company.
However, behind these market expectations lies concern that Nvidia has been increasing its investments to maintain its leadership in the AI semiconductor market by expanding support for its clients and AI infrastructure. The intertwining of Nvidia's GPUs with AI companies, cloud providers, data centers, and financial institutions has made it difficult to distinguish between actual GPU demand and demand generated by investments.
These concerns have been amplified by comparisons to the 'vendor financing' seen in the late 1990s internet sector. Currently, as the costs of building AI data centers surge, AI startups and cloud companies are becoming increasingly reliant on external funding, while Nvidia is directly investing in its clients and AI infrastructure projects.
For instance, on August 10, Nvidia announced the establishment of an AI infrastructure financing platform with six financial firms, including Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR, aiming to mobilize over $500 billion in funds.
The structure where funds supplied to AI companies are funneled back into Nvidia GPU purchases has led to questions about whether this constitutes 'circulating finance.' Analysts suggest that if investment growth is based on financial support rather than actual AI demand, the growth of the AI infrastructure market may appear inflated.
Therefore, even if Nvidia's earnings exceed market expectations, there are concerns that a slowdown in actual GPU demand or a reduction in data center investments could turn the financial support structure that has fueled AI investments into a burden. This could significantly impact domestic companies connected to Nvidia.
Experts emphasize that the key takeaway from this earnings report will be the outlook for future GPU demand and AI data center investments, rather than just the revenue figures.
A business insider noted, "If actual demand is confirmed in the earnings and guidance, market confidence in the AI supercycle could continue. Conversely, if GPU demand falls short of expectations, the financial support structure Nvidia has built to expand its AI market could exacerbate the impact of a bubble burst."
* This article has been translated by AI.
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