Nvidia's Chief Executive Officer, Jensen Huang, expresses belief in AI Agents potentially generating a substantial multitrillion-dollar market value.
Last week, tech titan Jensen Huang, the CEO of Nvidia (NVDA), set the stage for CES 2025, held in Las Vegas until Friday, by delivering an opening keynote speech. Known for its leading role in providing chips, primarily graphics processing units (GPUs), and related technology for artificial intelligence (AI) capabilities, Nvidia was the center of attention at CES 2025.
During his approximately 1.5-hour presentation, Huang dived deep into the topic of AI. He showcased Nvidia's new AI-related products, partnerships, and his vision for the AI industry's future. What left Nvidia stock investors buzzing was this comment: "AI agents [are] likely to be a multitrillion-dollar opportunity."
So, what are AI agents? In Huang's recent CES financial analyst conference, he termed an AI agent as a "digital workforce." The power to develop AI agents now arises due to generative AI, a cutting-edge technology that dramatically expands the use cases of AI. Generative AI gained public attention with OpenAI's launch of ChatGPT chatbot in late 2022.
While chatbots are helpful in specific scenarios, it's the autonomy that sets AI agents apart. Chatbots can perform tasks such as answering questions, generating text, and problem-solving. However, they lack the ability to work autonomously or take initiative. On the other hand, AI agents do.
At CES 2025, Nvidia's CEO emphasized the company's position in the realm of AI agents. On the latest earnings call, CFO Colette Kress highlighted their involvement: Nvidia AI Enterprise, which includes Nvidia NeMo and NIM microservices, serves as the company's operating platform, providing the foundation for AI agents. Large enterprises like Cadence, Cloudera, Cohesity, NetApp, Salesforce, SAP, and ServiceNow are leveraging Nvidia AI to accelerate the development of these agents.
Industry leaders such as Accenture and Deloitte are collaborating with Nvidia to bring AI to enterprises worldwide. Nvidia's partnerships with various companies aim to help create AI agents for tools within their respective industries. The primary methodology involves large enterprises utilizing Nvidia AI Enterprise to create AI agents, which will then be rented out to customers via the cloud.
The top management at Nvidia anticipates a swift adoption of AI agents. During the earnings call, Kress expressed her confidence in the rapid growth of Nvidia AI Enterprise full-year revenue, which she expects to double from the previous year. This anticipated surge is fueled in part by the vigorous push among enterprises to develop AI agents.
The urgency to adopted AI agents is palpable among various industries, for they realize that lagging behind competitors in this area could have detrimental consequences for their business. At Nvidia's CES financial analyst conference, Huang further underscored the speed at which AI agents would be implemented in fields such as software engineering: "Starting next year, if a software engineer in your company is not assisted by an AI agent, you are already falling behind."
In light of the potential market size for AI agents, with Nvidia poised to capture a substantial share, let's put the estimated $3 trillion market in context. With a market value of $3.4 trillion in 2023, the global car market serves as one example. Another example includes the combined 2023 gross domestic products (GDP) for Germany, Japan, India, the U.K., and France, which topped $4.5 trillion.
Considering a 5% market share capture, Nvidia's potential earnings from the AI agent market could reach $150 billion. This figure represents a substantial amount for Nvidia, which currently generates annual revenue of $35.1 billion. Given the company's impressive growth rates and expectations for further revenue expansion, it's clear that the AI agent market could spell major profits for Nvidia in the years to come.
Investors looking at Nvidia's future prospects might be interested in its involvement in the AI agent market. Following Huang's comments at CES 2025 and the subsequent earnings call, Nvidia's CFO, Colette Kress, highlighted their focus on Nvidia AI Enterprise, which includes Nvidia NeMo and NIM microservices, serving as the foundation for AI agent development.
In the realm of finance and potential investments, the AI agent market could be a lucrative opportunity for Nvidia. Given that AI agents are projected to become mainstream in various industries, and with Nvidia aiming to capture a substantial share, the market's estimated $3 trillion size could result in substantial profits for the company.
