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NVIDIA’s Data Centre Revenue Surpasses $1 Billion for the First Time

"people still saw it as something esoteric"

By claudia glover

NVIDIA’s data centre revenue crossed the $1 billion mark for the first time this quarter, propelled by an impressive 80 rise in sales to data centre clients

That was underpinned by a sharp rise in the use of its GPUs to accelerate workloads in hyperscale and large industry vertical data centres.

GPUs, or graphics processing units, turbo-charge the processing of applications typically normally just running on the CPU, by offloading some of the compute-intensive and time consuming portions of the code. The approach is increasingly used to underping AI and machine learning workloads.

As CEO Jensen Huang told analysts on an earnings call: “The notion of accelerating deep learning and machine learning using our GPUs is now common sense. It didn’t used to be. People still saw it as something esoteric, but today, data centers all over the world expect a very significant part of their data center being accelerated with GPUs”.

NVIDIA’s overall revenue in 2020’s first quarter was up by 39 percent from last year to $3.08 billion. GAAP earnings have surged by 130 percent to $1.47 per diluted share, however non-GAAP earnings per diluted share were down by one percent from the last quarter at $1.80. NVIDIA paid $98 million worth of dividends in the first quarter of fiscal 2021.

Much of this success is due to NVIDIA growing into data centre networking. Huang went on to clarify the drive behind this transition:

“Previously, a CPU compute node was the unit of computing. Going forward, the new unit of computing is an entire data centre. The basic computing elements are now storage servers, CPU servers, and GPU servers and are composed and orchestrated by hyperscale applications that are serving millions of users simultaneously.”

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Clearly signposting the company’s shift in focus is its acquisition of Israeli data centre networking company Mellanox, which was completed at the end of the first quarter. Mellanox is now part of NVIDIA’s networking brand and Israel is now one of the NVIDIA’s major technology centres.

Huang went on to stress: “This is the era of data centre scale computing and together, NVIDIA and Mellanox can architect end-to-end.

“Mellanox is an extraordinary company and I’m thrilled that we’re now one force to invent the future together.”

NVIDIA gaming revenue also rose a healthy 27 percent YOY to $1.34 billion, due in part to the pandemic, according to Colette Kress, executive VP and CFO.

As the world went into lockdown killing off or seriously hindering some businesses,  gameplay surged. Globally NVIDIA has experienced a 50 percent rise in hours played on its platforms and the highest acceleration of gaming laptops revenue in six quarters, the chipmaker said on an earnings call.

That being said, the company predicts some difficulties in the next fiscal quarter due to COVID-19 in some segments: Kress predicted that NVIDIA’s automotive platform sales will be down by 40 percent on a sequential basis.

See also: Shopify CEO: The Office is Dead

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