Nvidia’s Jensen Huang: AI Reaches Virtuous Cycle

Nvidia CEO Jensen Huang, speaking at the Asia-Pacific Economic Cooperation (APEC) CEO Summit in South Korea, declared that artificial intelligence has entered a “virtuous cycle,” setting the stage for sustained and exponential growth in the industry. This assessment underscores the transformative impact AI is having on the global economy and Nvidia’s central role in powering that revolution.

Huang, during his address, emphasized how advancements in AI models are driving increased investment, which in turn is leading to even more sophisticated and capable AI. This self-reinforcing loop, he argued, is the engine behind the current surge in AI-related capital expenditure.

“We have now achieved what is called the virtual cycle,” Huang stated, “The AIs get better. More people use it. More people use it, it makes more profit, creates more factories, which allows us to create even better AIs, which allows more people to use it. The virtual cycle of AI has been designed, and this is … the reason why you’re seeing the world’s capex going so fast.” This explanation provides a clear insight into the economic dynamics underpinning the AI boom.

Huang’s comments arrive amidst a massive capital deployment orchestrated by Big Tech, as these firms seek to build out the infrastructure required to develop and deploy advanced AI solutions. Meta, Amazon, Alphabet, and Microsoft collectively committed over $300 billion this year alone toward AI technologies and data center construction. The strategy reflects an industry-wide race to capture market share in the rapidly expanding AI landscape. These capital expenditures are expected to continue their upward trajectory into 2026, demonstrating a long-term commitment to AI dominance from these tech giants.

Dan Ives, Global Head of Technology Research at Wedbush Securities, characterized Nvidia as “the foundation of the AI Revolution” after Huang’s address. Ives elaborated on the virtuous cycle, saying, “The more demand, the more building of AI building blocks. And demand creates more demand and capex.” This analysis reinforces the notion that Nvidia’s hardware is critical to the ongoing AI revolution.

Huang further clarified that profitability fuels the current wave of AI investments, stating, “When something becomes profitable, you want to manufacture more of it, just like when you’re manufacturing chips and wafers and DRAM, if the manufacturing of those chips were profitable, you want to build more factories to create more chips.” This economic rationale explains why companies are willing to make significant investments in AI infrastructure.

Huang positioned AI as the catalyst for a complete overhaul of the computing landscape, heralding a new era where “every single layer of the computing stack is being fundamentally changed.” This suggests a potential shift in resource allocation and technological priorities in the near future.

According to Huang, this transformation is only in its early stages, with a decade-long buildup anticipated. This implies a substantial opportunity for investment and innovation in the AI space over the next several years.

“AI runs on GPUs [graphics processing units], whereas hand-coded software runs on CPUs [central processing units]. This entire software stack, from the … the needs of energy, chips, the infrastructure, all of the software associated with the systems, the AI models and the applications on top, every single layer of computing has been fundamentally changed,” Huang elaborated. This provides key insight into the technology driving the change. He added, “Just think: the computer industry has been largely the same for 60 years, and now, with AI and accelerated computing, every single layer of the computing stack is being changed. All of the computers we’ve created in the past, a trillion dollars, maybe more, of computers needs to now be transitioned, shifted to the new computing platform.”

Nvidia solidified its position in the AI market with a recent partnership with Samsung. Samsung intends to utilize a cluster of 50,000 Nvidia GPUs, leveraging their parallel processing capabilities to enhance semiconductor manufacturing for mobile devices and robots. This deal strengthens the collaborative relationship between the two tech giants.

Looking ahead, Huang envisions a future where AI becomes an active participant in the global economy, reshaping industries and creating new opportunities. The CEO anticipates that AI will have a hand in the transformation of “$100 trillion worth of industries around the world.”