Demand for AI chips has surged this year as artificial intelligence models move from answering simple questions to complex reasoning, Jensen Huang, CEO of leading chipmaker Nvidia, said on CNBC's Oct. 8 broadcast.

The company's shares rose by 1.9% on Wednesday, with other chipmakers jumping as well, with AMD adding 5.7%, Marvell Technology 3%, and Broadcom 0.9%. The utilities sector, like the technology sector, is on track to close trading at record levels as AI continues to fuel investor expectations about the level of power consumption by data centers, CNBC writes.

Huang said AI reasoning models are consuming exponentially increasing amounts of compute, but demand for them is also strengthening rapidly, especially in the last six months as they have been performing outstandingly. "The demand for [Nvidia's] Blackwell AI chips is really very, very high," he said. - "I believe we are at the beginning of a new phase of large-scale construction, the beginning of a new industrial revolution.

Bloomberg sources said Wednesday that Elon Musk's AI startup xAI will increase its current funding round from $10 billion to $20 billion, including an investment from Nvidia. As part of the deal, chatbot developer Grok will receive AI chips for Colossus 2, its largest data center.

Last month, Nvidia announced that it would invest $100 billion in OpenAI's data center project. It involves the deployment of 10 gigawatts of computing power. That's comparable to the annual energy consumption of 8 million U.S. households or the peak summer demand of all of New York City in 2024.

Huang noted that the AI industry will have to develop its own sources of power generation outside the existing grid to quickly meet growing demand and protect consumers from rising electricity prices. He said data centers should be equipped with natural gas-based power, and possibly nuclear power in the future. "Data centers with their own generation will be able to grow much faster than those that are tied to the power grid, and we need to follow this path," said the head of Nvidia.

This article was AI-translated and verified by a human editor

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