00:00 Speaker A
First, we got to talk about Nvidia.
00:03 Speaker A
And I’m pleased to say we are joined today by Nvidia CFO Colette Kress, joining us um on the phone. And uh Colette, thank you so much for joining us. Um the quarter was strong in a word.
00:20 Speaker A
Um and in particular on the call, I think one of the things that investors and analysts were excited to hear was the breakout and more detail on the CPU data center business. Um and that’s where I wanted to begin today. And and if you could talk talk us a little bit more through how Nvidia is thinking about that business and the size of that opportunity.
00:48 Colette Kress
Thank you. Thank you so much. Yes, we had a great quarter, uh talking about a lot of different things. Uh important to see uh the growth that we’ve seen in the AI and the different types of AI. Uh we’re in a phase right now of agentic AI, uh and that has really driven a significant amount of compute uh that we’ve been able to put in market.
01:14 Colette Kress
The diversifying of our customers continues to grow and all great types of uh folks buying our compute. But most importantly now is a focus in terms of the CPU and how important this is to the workloads as well.
01:29 Colette Kress
And we have the ability not only to just be inside uh Grace Blackwell as well as what we have in terms of our systems with Vera Ruben, we now have an opportunity to also have what we call a standalone uh CPU and selling that. We have customers already looking at that opportunity to provide standalone along with our Vera Rubin and our Grace Blackwell together. That together, we believe for this year, can be a total of about $20 billion worth of CPUs.
02:08 Speaker B
So when when you talk about that 20 billion, is it is it the 20 billion as in the CPUs included with Vera Ruben and then the standalone units as well? Or is it the standalone uh on its own that’s the 20 billion? How does that that kind of work out?
02:30 Colette Kress
It’s actually both. It’s actually both. As you’ve seen us uh already with Grace Blackwell, Grace uh with it. We have had standalone and will see it along with those full systems as well. Uh and then again, well, with Vera Rubin, we’re going to see more of that as well.
02:51 Speaker A
Colette, can you give a little more color around the standalone itself and how you all see see the opportunity there, what kinds of customers are are tapping into that versus the the combined compute as well?
03:11 Colette Kress
You’re going to see the same types of customers when they think about what they are building inside of their data centers and this important inflection that we’ve had for inferencing. It’s going to be an important piece that they have, the CPU enabling them for agentic types of work. You have the CPU there and available for you and that will also be a need for some of the standalone agentic work.
03:39 Colette Kress
Um post training types of pieces as well. So, we see this continuing within our full systems and a very big market now for just the standalone as well.
03:54 Speaker B
And I just I just want to touch on the the uh through line. I think Jensen had said 1 trillion by 2027. Uh big change by the way from October uh when he said I think it was 500 billion. I I may be getting my my numbers mixed up there because I mean, big numbers confuse me. Uh but does that does that 20 billion add on to that trillion? I think at that point he had said it was just compute that was the 1 trillion, not networking. So I just kind of want to get get that together.
04:23 Colette Kress
Yeah, it’s a it’s a good question uh regarding uh the one trillion. Uh, we’re very excited of what we will see with Vera, Ruben and what we’ll see with Blackwell uh over the three years. uh from 2025 all the way to 2027. That’s going to be a trillion dollars. Um and we’re looking forward once we get to 2027 to really show uh this um this strong growth that we’ve seen over this time.
05:01 Colette Kress
So that includes there’s going to be situations where we also have additional types of products that we were bringing to market that will likely add to what we’re seeing. When we see the part in terms of the standalone, yes, that’s probably going to be an addition that even helps us.
05:15 Colette Kress
So stay tuned, don’t start now and finish because we’ve got plenty moving into that 1 trillion going forward.
05:27 Speaker A
Um, Colette, I I want to ask you about the capital return too because that’s sort of, you know, your purview here. With you all, um, increasing the size of the buyback authorization to $80 billion, increasing the dividend to 25 cents, and you talking about the intention to return half of your free cash flow this year to shareholders. Um, this is significant increases, right? From a penny to 25 cents, pretty big uh boost to the dividend. Why did you all decide to make that change to in to increase that capital return to shareholders?
06:02 Colette Kress
Thank you, great question. Uh, our shareholders and the return that they earn is super important to us. And we have for many years been working on uh stock repurchases. We certainly do want do not want any type of dilution of our shareholders. But this was an opportunity given our strong free cash flow that we have that we both can work on what we need uh to operationalize our company, uh using our cash to do that.
06:33 Colette Kress
But also we have been with uh quite a bit of investments, uh and working in both with our suppliers and our full ecosystem has been essential. But given the strength of our growth, this gives us a great opportunity to advance what we can do in stock repurchases, but also what we can do in terms of improving uh the dividend for our shareholders.
06:58 Colette Kress
Now, what that meant was at the very onset of what we built in terms of that dividend, uh it has not been the top part of where we have increased over time. And this is really looking at almost a new initiation when you see us at 25 cents uh per quarter, essentially a dollar a year for for every single share. So we’re excited to bring this. Uh I know it’s a it’s a good balance uh in terms of our investments as well as how we can return to shareholders.
07:31 Speaker A
Colette, we know there are a lot of demands on your time today. So we’ll let you go. Thank you so much for calling and really appreciate it.
07:41 Colette Kress
Thank you so much. Great to hear you from you.
07:44 Speaker A
Take care.
