Nvidia CEO Jensen Huang is reportedly concerned about the company's business development.
According to reports by The Information citing senior executives, Huang held a series of meetings at the end of 2023 to discuss future business concerns. He worries that major Cloud Service Providers (CSPs), including Amazon Web Services (AWS) and Microsoft Azure, may not have enough capacity to continue expanding and building new data centers.
As the AI industry grows rapidly, Nvidia has become one of the major beneficiaries with over 80% of the market share for data center and AI server chips. Its market dominance has propelled its stock price and made Nvidia the most valuable company globally.
As the world's leading supplier of AI server chips and GPUs, Huang has outlined plans to expand beyond the cloud business. The company is targeting new markets such as consumer internet companies, automotive manufacturers, and healthcare service providers.
Sources revealed that Huang fears that if these major cloud providers cannot expand their AI data centers and power infrastructure quickly enough or lack sufficient land for expansion, they will inevitably stop purchasing Nvidia chips, significantly impacting the company's sales. Following these meetings, Nvidia management began inquiring with these major CSP customers on whether they have sufficient space and power to continue expanding and deploying existing and new chip orders.
With the recent launch of the Blackwell GPU, major CSPs and companies such as Meta Platforms represent a significant portion of its sales. However, recent news suggests that companies such as Amazon, Microsoft, and Google are not showing signs of slowing down their data center investments, indicating that Huang's concerns may be misplaced.
Amazon recently announced plans to invest an additional EUR 10 billion (approximately US$ 10.7 billion) in Germany by 2026 to build cloud infrastructure and logistics networks. This is in addition to projects announced in May, including a EUR 15.7 billion investment in Spain and a EUR 1.2 billion investment in France in infrastructure and computing by 2033.
Amazon also announced investment plans in Mexico, the US, Saudi Arabia, Singapore, and South Korea. The company will spend approximately US$ 5.9 billion by 2027 on cloud infrastructure projects in those countries.
Microsoft has also been aggressive with its data center investment plans. Since 2024, it has announced multiple projects, including a US$ 3.4 billion investment in Germany, a US$ 1.7 billion investment in Indonesia, and a US$ 2.2 billion investment in Malaysia.
In early April, Microsoft announced a US$ 2.9 billion investment in Japan over the next two years to build data centers. In May, it announced a US$ 3.3 billion investment in Wisconsin by 2026 to establish a new AI data center, followed by a US$ 3.2 billion investment in Sweden in early June to build AI and cloud infrastructure, which will include 20,000 Nvidia H100-grade chips.
Google recently announced a EUR 2.3 billion investment to expand three data center campuses in the US to enhance its global services like search, Gmail, Google Maps, Google Cloud, and YouTube. Since 2019, Google has invested over US$ 4.4 billion in Ohio, with the new projects bringing the total to over US$ 6.7 billion.
Google has also announced plans to build new data centers in the US. The company announced a minimum of US$ 2 billion investment in late May to build its first data center in Malaysia. In addition, Google has new data center plans in Mexico, Thailand, New Zealand, Greece, Norway, Austria, and Sweden.
