Jensen Huang’s full interview after the Nvidia-Marvell partnership

Well here's a treat, shares of Marvell Technology rallying sharply on news of a new partnership with none other than NVIDIA this morning which includes an investment by NVIDIA of two billion dollars into the company and joining us now exclusively NVIDIA's founder and CEO Jensen Wang and Marvell Chairman and CEO Matt Murphy. Gentlemen thank you for coming on the show. I'm going to start with you Jensen because this is a remarkable deal. I'm trying to understand if I get this right the customers will have a level of choice that is currently not available which could mean great things for your network portion of your business. The AI inflection point has arrived we're going through a platform transition all of the world's data centers are going to be replaced with this new form of doing computing we call accelerated computing. Of course the vast majority of the data centers would be powered by NVIDIA CUDA GPUs however for customers who would like to also have specialized versions that they build themselves we're extending our architecture starting with the networking architecture basically the entire chassis of our Grace Blackwell and Vera Rubin systems we're going to extend that through NVLink and connect it to Marvell and together we'll be able to address the customers whether they would like to use all NVIDIA gear or they would like to augment their our NVIDIA gear with their specialized processors and together we'll be able to address a much much larger TAM. Okay so Matt congratulations I know this is a really big deal and you know I've followed your company for many many years and you did tell me over and over again look you would be part of the future of AI which is now obviously is coronated. I want to know whether you have customers you've got some big hyperscaler customers that will be thrilled that they get a chance to be able to kind of get away from who they've necessarily been trapped with. Well I wouldn't call it trapped I think customers are going to be very excited about this I mean what customers are looking for Jim is flexibility they're looking for technology innovation they're looking for their partners to actually work together to drive a very robust ecosystem and I think that's really what we see from the Marvell side is we have key strengths in interconnect technology, silicon photonics, custom silicon but then NVIDIA and as Jensen mentioned they're not just a GPU company this is an asset rich company right with key networking IP, NICs, DPUs, CPUs, interconnect, rack scale so these are all things that now Marvell together with NVIDIA can provide we can drive interoperability we can drive complete solutions and we can enable customer choice so I think it's going to be a win for everybody. And you know Jim there's really a couple of major specialized semi-custom chip players out there and both of them have a large installation of NVIDIA architecture now and so both of them have large installations of NVLink they use the standard chassis that NVIDIA provides the Blackwell chassis and so all of this can be extended in the future these data centers will have you know GPUs and they have some specialized XPUs on their side but they have the benefit of connecting all of it with NVLink connecting all of it with Spectrum X they could add NVIDIA Vera CPUs to their racks they could add NVIDIA storage processors BlueField 4 to their rack and they could even add NVIDIA LPXs the grok chips to their racks and so all of this will be system architecture compatible it'll be ecosystem compatible and it expands the opportunity makes it easier for them to interoperate and makes it fantastic for us as we expand our TAM. Let's talk about the TAM and how big it is Matt one of the things that you taught me is you know there's room for everybody and in some ways people might say well you're now competing with NVIDIA obviously when you get two billion dollars I don't think it's much of a competition but can you talk about the size of the market because I think people right now typically with the stocks really getting hurt I don't want to emphasize the stock too much but maybe people are thinking that maybe the TAM isn't as big and maybe the whole thing is just kind of a wonder that is not necessarily going to be economic long term. Yeah let me give you some thoughts on that and I'll let Jensen chime in as well but I'm going to bring up a story okay when when Jensen and I started collaborating which goes back probably five or six years maybe longer okay the two companies have been working together for some time we had a discussion once and it was about how people typically look at the semiconductor market people typically look at it as a zero-sum game one's here one's here one wins one loses and it's just all nets to zero that's and that happens in part of the semiconductor market company and what what you actually said to me was companies like NVIDIA and Marvell we create the market we create the TAM okay and so if you look at over the last five six years look at the explosion in the AI TAM that's come that's been led by NVIDIA and also followed up by companies like Marvell and others but this partnership is again a move that we're making to keep increasing the overall TAM and then letting both companies actually participate more richly in there and I mean you can comment on it but the the the the TAM you know per per gigawatt is just in in the decabillion dollar range at this point yeah the part that most people miss is the whole nature of AI the processing of the software is all done in real time basically it's a generative form of computing the way we used to do computing in the past you would retrieve pre-recorded information from you know typed in by humans but now AI generates content and generates information in real time this inflection point this platform shift where all enterprise software in the future every single character you see on your display every piece of information that is produced has to be generated generated in real time and so all future enterprise software will come along with it what we call tokens these tokens are going to be manufactured produced processed by the infrastructure that we create and so the multiple trillions of enterprise software is now in transition into a token enhanced enterprise software world in the future the enter the multiple trillions of dollars enterprise enterprise spend will all be token enhanced and so this is what everybody is chasing now the moment of now is really important because two years ago we had the chat gpt moment where consumers had the benefit of enjoying AI for the first time but now with cloud code and open ai codex we're now seeing the agentic moment of that enterprise software we now have the killer app of enterprise computing finally and it's being adopted here of course inside nvidia the adoption is incredible it's you're hearing news of course of anthropic growing some incredible number of billions of dollars in just a month this is now the inflection point of enterprise ai arriving and all of that computing has to be done in real time and that's what this infrastructure is designed to do so jensen it's david so listening to you then i mean are we even able to calculate what the what the tam may be i mean you mentioned anthropics exponential increase in revenues what we're seeing is sort of something we've never seen does it is it just endless i don't know i'm just curious having listened to what you just said trying to understand what that means the simple logic is this in today most enterprise software is 90 gross margin it's basically software licensing in the future enterprise software will be larger than it is now much larger and it's very likely that their gross margins will be lower because it will be enhanced with tokens and so if you look at anthropics gross margins as a software company call it 50 gross margins but it's much much larger as a company because their opportunity is substantially larger than a software company and so the enterprise it industry in the future will likely be you know pick your favorite number but several trillion dollars at 50 gross margins instead of one trillion dollars at 90 gross margin and so this is a great inflection point for the enterprise world if you look at all of the enterprise software companies today you know pick your favorite ones they're all going to be agentic every single one of them is working on agents at the moment they're all going to be agentic their gross margins will be lower but their tam's going to be much much higher um jensen if i could just follow up on you know when i your decision to invest two billion dollars in marvell um follows uh significant stakes you hold in companies such as intel and coreweave and nebbius and i could go on it's a small small overall number in terms of the size of your company but nonetheless i'm curious as to why you choose to make an investment along with every one of these announcements every one of these announcements as you as you see is an expansion of our ecosystem our partnership with coreweave is obviously extremely unique they're basically a hundred percent top to bottom end to end nvidia and they're expanding our ecosystem in the case of marvell our partnership is to expand the nvidia ai ecosystem in the data center as it pertains to semi-custom asics whenever they do a semi-custom asic we now we now connect it to nv link it connects to the entire nvidia ecosystem as a result of that we are also expanding our partnership to extend the ai infrastructure out of the cloud data centers and out into the world's telecommunications ai base station network the future telecommunication network today's telecommunication network is essentially a dumb pipe dumb wireless pipe in the future just like we did with cloud computing we're going to turn the ai base stations into a part of the into the ai infrastructure and so we're going to be able to run ai models right inside the base stations in the future telecommunications and base stations is a core part of the business that marvell and and matt has built over the years we're now going to connect nv link to that so that we extend the nvidia ecosystem all the way out into the base stations really exciting future growth opportunity and that's why you wanted to well marvel is a marvelous investment you know i've been dying to say that and so and so this but this partnership is is about extending nvidia's ai ecosystem and nvidia's ai architecture and so this investment is really a fantastic investment for us we're going to of course we're also smart investors we've expanded the tan for both of us as a result of of this partnership and we want to be a investor in that we want to have a stake in that future hey matt can you uh help contextualize the news given just the news of the day uh this commodity price shock we're living with the geopolitical tensions in the middle east whether or not that's going to interrupt any kind of demand or or whether some of these commodity shortages will inhibit production around the world somehow yeah thanks carl good to see you uh yeah demand continues to be very strong uh we we had you know our best quarterly earnings ever last quarter strong momentum coming out of that um we've guided our data center business to keep growing like 40 plus percent a year for the next couple years i don't see that changing at all i think certainly there's there's a wall of worry out there with a lot of things going on in the world i heard you guys talking earlier about multiples compressing and things like that but from our standpoint we are not slowing down at all on the r and d investment we don't see any slowdown from our customers on their intent to deploy so that all looks extremely positive and um you know i really appreciate the the vote of confidence from jensen and the team this you know marvell was already growing very strongly i mean we grew like 44 last year with another big year ahead of us this year this just helps turbocharge our growth and our opportunity and gives us an infusion of capital that actually allows us to go do that so we were doing great on our own but this is a way for marvell to actually just really take a leap forward and as jensen mentioned i totally agree this inflection on what you're seeing in the enterprise and and really the accelerated build out of the ai factories that gets marvell into that in a much bigger way and really at the rack scale level now not just selling individual components but how do we go in together with a broader solution and we don't have all the pieces we can do that with nvidia and in some cases nvidia doesn't have all the pieces so that's how we can get it together okay okay so one of the reasons why i like these deals that jensen does is because it immediately actually ends up raising the earnings per share estimates people looking for 530 for the calendar year 2027 that seems ridiculously low after what we've just heard matt why not take those numbers up right now this is a this is a method of distribution on our network that you can do it hey jim you know how i run this company i've been doing this for 10 years now consistent methodical okay one quarter at a time and show consistent results so all right so i already in the last quarter like we we signaled for the year we would be up but yes i think i think it certainly is a great setup for next year jim perfect and jensen how i mean gtc obviously one of the most important events so many great things are you not surprised to some degree that the marketplace doesn't seem to see what you and i see yeah i think i think the misses several things about about nvidia i think they of course because we are such a large company and we have such a large position of ai computing and all the ai infrastructure you know a lot of people might think that all of our growth is all priced in however uh what is very clear is several things happened this last several months in fact maybe the last six months we gained share how is it possible that we're gaining share at a position that we're so large we didn't have anthropic exposure previously to this year and now we're scaling when anthropic our growth in aws is accelerating we just announced they're going to buy a million gpus from nvidia in just a you know about a year and a half or so and so that's an enormous number of new gpus the number of customers outside of the clouds the top five cloud service providers has now grown to 40 of our company's business most people think that most of our business is in the cloud but in fact the fast one of the fastest growing segments is outside of the enterprise the industrial uh the announcements we made with lily our autonomous vehicle uh uh work um all of the physical ai robotic systems the number of those applications is growing incredibly because ai is diffusing into all of the world's enterprise industrials every single industry and every single country and none of that is covered because we spend so much time thinking about the mag 7 the mag 6 that you know because it consumes so much of the attention people forget the rest of the world is incredibly large and so that segment is growing incredibly large for us now represents about 40 of our total business and so so i think a lot of people don't see the bigger picture of what's happening because of the attention we put into the the top sevens um but the fact that it matters we're growing we're taking share uh we're growing into new segments okay uh congratulations to both you gentlemen great to see you again jensen and much more earnings and a much larger tank you