NVIDIA’s Data Center Revenue Surpasses Gaming for the First Time

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It is easy to forget that hardware companies are involved in all types of businesses. While NVIDIA began with graphics chips for PCs, it has grown into a global supplier of technology for data centers. The following information should come as no big surprise then, in light of the many stories we’ve reported on since the launch of its Ampere-based A100 enterprise solutions.

Bloomberg has posted a report showing that green team has made an impressive achievement in its 27-year history. For the first time, its data center revenue has surpassed that of its gaming product lines. The data center segment narrowly edged out gaming with $1.8 B vs. $1.7 B. That is a relatively minor gap, but there’s more. From Q3 FY19 to Q2 FY21, the gaming segment was often more than double that of the data center segment. So, even a narrow nudge like this represents a huge gain. Data center revenue really started climbing around Q4 FY20, which is also around the time the A100 launched. During that time, gaming revenue often held at around $1.7 B, while data center had risen from a low of $634.07 B.

Pandemic-Driven Economics

NVIDIA CEO Jensen Huang has attributed a lot of this to the global effects of COVID-19, which forced many into working or learning from home. Industries saw the need to invest in upgrading. From AI to scientific research and servers for cloud-based services, the new technology suddenly saw increased demands.

This is not a momentary thing, it’s clearly the future brought to the present, NVIDIA computing is past the tipping point and its getting adopted in so many industries.

But NVIDIA has no illusions that this sudden, dramatic surge will be maintained. Chief Financial Officer Colette Kress stated that the company has a mixed outlook regarding its 3rd quarter projections. Even as cloud services continue to grow, other companies may not continue to have similar needs. Future growth could easily be in the lower, single-digit margins. The upcoming launch of the consumer Ampere-based GPU line is sure to play a factor in this as well.

Peter Brosdahl
As a child of the 70’s I was part of the many who became enthralled by the video arcade invasion of the 1980’s. Saving money from various odd jobs I purchased my first computer from a friend of my dad, a used Atari 400, around 1982. Eventually it would end up being a lifelong passion of upgrading and modifying equipment that, of course, led into a career in IT support.

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