Nvidia Gets Lift From Nations' AI Efforts

"Global governments are leaping into the AI spending boom.

Countries in Asia, the Middle East, Europe and the Americas are pouring billions of dollars into new domestic computing facilities for artificial intelligence, opening up a rapidly growing source of sales for Nvidia and other tech companies.

Governments are boosting their budgets and brandishing other incentives to encourage local companies and multinationals to build new data centers and refit old ones with specialized computer chips, mostly from Nvidia. The goal: to develop AI locally and train large language models in their native languages, based on their own citizens' data.

Driving the investments is a quest for more strategic self-reliance amid rising tensions between the U.S. and China that center on technology. Some countries also are seeking to safeguard their local culture -- and their national security -- in an AI-centric world after feeling they had been also-rans in the mobile-phone and cloud-computing revolutions.

Nvidia last month said so-called sovereign AI efforts are expected to bring in almost $10 billion this year, from nothing last year. The company reported $26 billion in quarterly revenue, nearly half of which came from big cloud-computing companies that are renting access to its chips.

"There is a tremendous amount of anxiety among some governments about how the generative AI revolution is going to impact their economies," said Pablo Chavez, a former Google and Microsoft policy executive who is now at the Center for a New American Security. "They want to have a little bit more influence and control this time around."

Those efforts are turning into a windfall for Nvidia, as well as U.S. tech companies that help build and operate data centers and are looking for new sources of growth as private-sector demand for AI tools threatens to slow.

Nvidia Chief Executive Jensen Huang has traveled the world in recent months to push investments in AI from governments and state-linked telecommunications and utility companies that often oversee national computing infrastructure. He met Indian Prime Minister Narendra Modi in September, followed by the prime ministers of Japan and Singapore in December and officials in the United Arab Emirates and Canada early this year. Huang went to Taiwan for a computing conference this month.

"You own your own data. You therefore must take that data, refine that data and own your own national intelligence. You cannot allow that to be done by other people," Huang told an audience in Dubai in February.

Among the biggest spenders on sovereign AI is Singapore, whose national supercomputing center is being upgraded with Nvidia's latest AI chips and where state-owned telecom Singtel is pushing an expansion of its data center footprint in Southeast Asia in collaboration with Nvidia. The country is also spearheading a large language model that is trained on Southeast Asian languages.

Other big projects are taking place in Canada, which last month pledged $1.5 billion as part of a sovereign computing strategy for the country's startups and researchers, and Japan, which said it is investing about $740 million to build up domestic AI computing power this year following a visit from Huang.

Similar pushes are spreading across Europe, including those in France and Italy, where telecom companies are building AI supercomputers with Nvidia's chips to develop local-language large language models. French President Emmanuel Macron last month called on Europe to create public-private partnerships to buy more graphics processing units, or the core chips used to train AI, to push its share of those deployed globally from 3% currently to 20% by 2030 or 2035.

Kenya last month signed a deal with Microsoft and the United Arab Emirates-backed AI company G42 to build a $1 billion data center in the country -- and to use the country's geothermal power to train a model directly in Swahili and English.

"Governments now want sovereign clouds for their AI infrastructure and sensitive data, and U.S.-based tech companies are eager to build those for them," said Nu Wexler, a former policy communications staffer at Google, Meta Platforms and Twitter, now known as X. "It's an enormous growth opportunity for chip manufacturers and cloud providers, but they still have to navigate a minefield of export controls and political rivalries."

China is also playing a role in the sovereign AI push. It is selling data centers and AI capabilities to African countries including Egypt. But China's domestically produced AI chips don't currently perform as well as those from the U.S., often making the U.S. a preferred supplier -- despite export licensing restrictions the U.S. has placed on sending the most-advanced technology to certain countries.

For Nvidia, national pride in sovereign computing might provide a welcome counterbalance if buying by its core group of tech-company customers such as Microsoft, Amazon.com and Alphabet's Google cools off, analysts say. The growth in the company's sales has decelerated in recent quarters, although analysts forecast its revenue will continue to go up.

The trajectory of climbing sales to cloud-computing giants "clearly cannot be sustained," said Angelo Zino, an analyst at CFRA Research, but there are other ways Nvidia could continue to profit from the AI boom.

"The question has been, how can they continue this momentum?" he said. "Sovereign AI is a new lever out there in terms of generating higher revenue."" [1]

What about AI in Lithuania? What AI? We do not care about Lithuanian culture, language and economy.We understood already that with so much Lithuanian corruption we will never win a war with China. Don't worry. We are stealing so many golden spoons from our military that we will soon perform musical acts with those golden spoons. If we go naked [2], we might at last win the Euro-vision contest. You go, Lithuania...

1. Nvidia Gets Lift From Nations' AI Efforts. Fitch, Asa; Schechner, Sam.  Wall Street Journal, Eastern edition; New York, N.Y.. 10 June 2024: B.1. 

2. "Panevėžys is thriving - a nudist beach will also be installed in the city." The whole of Lithuania is also flourishing. Our youth are the happiest in the world - they don't need to work or study, Lithuanian rulers will take everyone into the army and keep them alive for free.