AI spending is sustainable, will continue for years

Investing.com — Nvidia Corp. Chief Executive Officer Jensen Huang defended the current level of AI infrastructure spending, calling it appropriate and sustainable amid investor concerns about tech companies’ capital expenditures.

Speaking to CNBC on Friday, Huang predicted that the build-out of artificial intelligence infrastructure would continue for seven to eight years, driven by extremely high demand for AI technology.

“AI has become useful and very capable,” Huang said. “The adoption of it has become incredibly high.”

The Nvidia co-founder dismissed worries about the tech industry adding too much capacity, distinguishing the current situation from the first internet build-out. He noted that unlike earlier tech booms, there is no idle infrastructure today, and companies like Anthropic PBC and OpenAI are generating profitable revenue.

His comments come as heavy capital spending by major tech companies including Amazon.com Inc., Alphabet Inc.’s Google, Meta Platforms Inc., and Microsoft Corp. has raised investor concerns. The market value of these four businesses has declined by nearly $1 trillion in recent days following their earnings reports.

Much of this spending is expected to benefit Nvidia, which manufactures data center processors essential for developing and running AI models. Huang argued that artificial intelligence is already delivering returns for companies that have adopted it, and suggested these customers would see even better results if they had more data center capacity.

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