Nvidia reported this week that its revenue for the fourth quarter ending January 29 was $6.05 billion, down 21% from a 12 months in the past. However Jensen Huang, CEO of Nvidia, mentioned generative AI is anticipated to create a significant alternative that may speed up later this 12 months.

Nvidia’s inventory worth rose on the event, and Huang famous how generative AI shall be entrance and middle at its GTC occasion the week of March 20. (I will be moderating a panel on the enterprise metaverse at Nvidia’s GTC occasion on March 22.)

VentureBeat’s Sharon Goldman wrote a prolonged article on how Nvidia dominated the AI ​​market. Goldman mentioned that “the AI ​​explosion of 2023, as nice language fashions like ChatGPT and DALL-E 2 have launched generative AI into the general public consciousness in a method maybe not seen for the reason that daybreak of the iPhone.” in 2007″.

I spoke with Huang this week and he mentioned that the mix of user-generated content material and generative AI will assist create content material for the metaverse at an excellent sooner charge than beforehand anticipated. We speak about that and different gaming tendencies in our chat. I additionally requested him if he has an opportunity to put in Nvidia chips in a future Nintendo sport console.

Right here is an edited transcript of our interview.

GamesBeat: Generative AI is having its second. You’ve got been speaking about this for a comparatively quick time. What satisfied you is extra necessary?

Jensen Huang: In fact, ChatGPT has solely been right here for a short while, about three months. However as you already know, in the case of huge language fashions, the trade has been taking part in with them for a while. For those who take a look at a few of the advances from final 12 months, whether or not it is picture generative fashions, beginning with our ProGAN work and now our GauGAN work, all of the GAN work that we have performed and the variable autoencoders that we have performed. A cousin of the variable autoencoder turned broadcast fashions. Its stability, its scalability, turned out to be unimaginable. All of that added up final 12 months.

We now have generative fashions for proteins. We’ve generative fashions for chemical merchandise. We’ve generative fashions for language, for textual content. We’ve generative fashions for photographs and video. As you already know, we’re engaged on generative fashions for 3D. You will be unable to populate the world’s Omniverse, the metaverse, with content material designed by people. It must be perceived by means of pc imaginative and prescient, or generated, or a mix of each.

GamesBeat: What I’ve seen within the final month is 5 startups combining generative AI and user-generated content material in video games. Even Roblox final Friday confirmed their demo of that. It sounds just like the customers aren’t terribly gifted professionals, however if you happen to give them generative AI, they’ll create issues that can be utilized or performed with.

Huang: It’s precisely as you say. You possibly can generate the primary model after which let me modify it. I do not assume I can create a mannequin from scratch, however I wager I can modify one you place in entrance of me. It is no totally different than individuals who use clip artwork on Powerpoint slides. They’re at all times combining different individuals’s work and modifying. It is a lot simpler to create one thing round that. I believe it would increase content material creation.

GamesBeat: It is extra plausible now that now we have these various things. We’ve Omniverse. We’ve generative AI. We’ve UGC. All of this contributes to the metaverse.

Huang: That is proper, precisely. The items are coming collectively. It’s totally thrilling. The characters, you possibly can ask them questions, proper? These are characters you possibly can even have a dialog with. They’ll converse in numerous languages. They’ll perceive what you imply. Utilizing restoration fashions, an organization that makes a medieval sport or a sci-fi sport or a Battlefield sport, they’ll take your entire information base of the story, the narrative of that sport and train an AI simply that. The complete worldview of the sport’s AI may very well be fully medieval and narrowly targeted on gameplay. It will likely be secure. It will likely be sport particular. We now have all the mandatory items of expertise to assist individuals try this.

GamesBeat: Do you assume we’re getting nearer to having a mutually useful gaming metaverse and enterprise metaverse by means of one thing like Omniverse?

Huang: I am much less positive of that. We do not spend as a lot time on the patron facet. However on the commercial facet, the vitality is actually excessive. Now, with the mix of generative fashions and proprietary fashions, you possibly can stand up and working actually quick. The time of the commercial metaverse is simply across the nook.

GamesBeat: For at present’s gaming outcomes, you seen that video games are choosing up. It is up 16 p.c from the earlier quarter, however it’s nonetheless down 46 p.c. What’s the sample we have seen occurring in video games on the subject of the outcomes you report?

Huang: We subtract all COVID time. For instance, for the reason that finish of 2019, 2020, 2021, and 2022. The video games direct gross sales enterprise was averaging about $1.5 billion per quarter earlier than COVID. In the present day we’re in a world the place whole gross sales are more likely to be $2.5 billion within the subsequent 12 months. Somewhat decrease initially as we proceed to normalize the channel, after which most likely greater within the second half of the 12 months resulting from seasonality. The distinction between $1.5 billion and $2.5 billion is principally, so to talk, subtracting the pandemic.

For those who take a look at what is going on on on Steam, it is roughly that. The expansion of Steam, the variety of energetic gamers on Steam, is a mirrored image of that. After which in fact China will bounce again once more, which we’re fairly enthusiastic about. New video games are actually being accredited. China is again on the mend. We’ll see the way it seems. I believe the gaming market has positively grown within the final three years.

GamesBeat: Do you assume there is a chance to enter the subsequent Nintendo console?

Huang: We’ll maintain our fingers crossed. We’re superb at constructing vitality environment friendly gaming programs, primary. Quantity two, we’re fairly satisfied that the subsequent technology of video video games is closely ray-traced, if not totally ray-traced, and relies on generative AI. You recognize we’re working arduous: RTX is actually based mostly on two basic applied sciences: ray tracing and AI. I believe you will discover that the subsequent technology of video video games will make an increasing number of use of these two applied sciences. We’re extremely good at it. I hope it occurs.