Chipmaker Nvidia has outdone analyst expectations, earning $13.5bn in revenue – $2bn higher than predicted – amid an AI boom that has seen demand for computer chips skyrocket.

Following Wednesday’s (23 August) second quarter record results, Nvidia has said it would buy back $25bn in stock.

The 30-year-old company found itself uniquely poised among its competitors to reap the benefits of the AI boom. The company has dedicated research and development on AI chips – which are now the basis of nearly all AI apps, including ChatGPT.

As AI requires specialised chips with huge computational power, a shortage caused by increasingly high demand has seen Nvidia corner this market niche. Analysts estimate demand for Nvidia’s AI chips exceeds supply by at least 50%.

The company is predicting third quarter revenue of $16bn, with a 2% variation.

The leading chip maker announced in May that it was developing the most powerful AI supercomputer in Israel, named Israel-1, to meet the rising demand for AI in the country.

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By GlobalData

During a supercomputing conference in Germany in May 2023, the chip maker said it had partnered with Bristol University to create a computer named Isambard 3. The new computer would be built from its in-house central processing unit chip named Grace.