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Nvidia CEO Jensen Huang recently announced that his company had a difficult fiscal second quarter, with a dramatic slowdown in PC and game sales.
Nvidia has seen a slowdown due to the war in Ukraine and a slowdown in China, with macroeconomic downturns around the world negatively affecting consumer demand. Gaming revenue in the second quarter was $2.04 billion, down 33% from a year ago and 44% from the previous quarter.
And yet Huang clings to his optimism about some big long-term projects, including the construction of Earth-2, a digital twin of our planet which, with enough supercomputing simulation capability within the Omniverse, could enable scientists to predict climate change for our planet. .
Earth-2 will require the best technology Nvidia can muster, like its new graphics processing unit (GPU) Hopper and its upcoming central processing unit (CPU) Hopper. He still believes that if Nvidia builds the Earth-2 simulation with meter-level precision for the entire planet, then we will get the metaverse for free.
I will be moderating a panel of industry metaverses at the upcoming Nvidia GTC online conference September 19-23. We’ll also have Nvidia speakers at our MetaBeat conference in San Francisco on October 4, and we’ll talk about the metaverse again at our GamesBeat Summit Next 2022 event in San Francisco on October 25-26.
Here is an edited transcript of our interview.
GamesBeat: How do you keep your faith in the metaverse and the longer-term view when you see things like the current slowdown?
Jensen Huang: Well, the two things are unrelated. Completely unrelated. On the one hand, the macro environment is a combination of all the things in the world that cause this. It just kept piling up. Although every event, whether in Europe, Asia or the United States, is unrelated to any other, when you keep accumulating it, before you even know it, there is a breaking point. even for the global economy. The macro environment has finally come home.
From June, it began to spin quite sharply. The PC industry has seen the biggest sequential decline in many years. When it happens so quickly – meanwhile, a few months before, the supply chain was so tight. Cycle times were long. There are a lot of goods in stock, in the supply chain. Suddenly everything fell apart. In our particular case, we are going to take it head-on and sell into the market at a much lower rate over the next few months. We’re going to let the chain normalize, let the chain inventory correct itself. We’ll give ourselves a chance to clear the deck before the next generation arrives.
There’s the tactical stuff, which is what’s happening right now, and then there’s the strategic stuff, the future stuff, which you can’t help but be excited about. Early adopters working with us are doing amazing things. The rapid pace of progress we’re making – I’m more optimistic about Omniverse and the work we’re doing there than at any time.
GamesBeat: There are forces that will move the metaverse forward in a secular way, so in a way that won’t be slowed down by the global economy.
Houang: We will make sure that is not the case. We are fortunate that our investment in Omniverse is not a separate investment or an orthogonal investment. It is based on the three things our company excels at. We are good at infographics and will continue to push that. We’ll continue to advance and reinvent the infographic as we speak. We will continue to push the AI. It’s too important. He is able to solve problems that, as you know, we thought were impossible before. Third, the scientific calculation and physical simulation are quite deep. The work we do there is extremely important to many industries and many fields of science.
We brought it together. We have brought these three pillars together in Omniverse. We are the ideal company, the perfect set of skills to bring together and create this next generation of the Internet. I think we are the right company to do this. It’s incredibly hard work, incredibly hard innovation, but it underpins everything we do.
GamesBeat: Which parts do you see take off first? Do you think enterprise-oriented digital twins will push all of this forward, or do you think gaming metaverses will push the collective metaverse forward?
Houang: The game already does what it does. I don’t need to tell you how exciting everything they do with Fortnite, with Roblox, with brands is. There’s already a lot going on in games. There’s nothing new in that, I would say. There is continuous evolution there, but nothing new.
What’s really going to be amazing for the industrial metaverse is that Omniverse gives – because it has universal data interchange it enables every tool used in a product design company – you could be a company who builds cars or ships or planes or agriculture or consumer goods or electronics, whatever it is. This allows these companies to have a single platform from a design perspective – every designer, then the CAD engineers, the CAE engineers, the supply chain teams and the people who build the factories, do the simulations. Everyone in every business organization can finally be in sync for the first time.
We see product designers, CAD designers, CAE engineers, operations teams, planning teams – everything BMW is done in planning teams. They all jump on Omniverse. I think when people realize the benefits, the internet connects us all. The reason the internet was so incredibly useful is that it is literally a platform, a data platform, that an entire business can jump on. Omniverse does this for all companies that are dealing with 3D data for the first time.
Whether it’s in media and entertainment, manufacturing, or product design, we see such excitement around it, for this fundamental reason. Once they figure it out, they’re like, “Oh my God, this is the data platform for 3D companies, people are doing 3D things.” Companies that make physical things, this is the unifying data platform. Those are the kind of words you use to describe the internet, except it’s for 3D. We allowed, for the first time, everyone to jump on a data platform, just like the Internet.
GamesBeat: Do you still believe that the secondary benefit of doing Earth-2, [the supercomputing simulation that is designed to predict climate change for decades to come]do you get the metaverse for free?
Houang: Yeah, absolutely. The main objective of Earth-2 is of course to help policy makers and researchers, scientists, to understand the impact of various forces on the future of the climate. Unless we can predict the climate a billion times faster, we simply won’t be able to do a climate simulation with enough precision at the regional level to effect policy changes and all the new scientific approaches that we must apply to avoid climate change. This is the first goal.
But to do that, we had to invent all kinds of new machine learning models, new physical models. We have to create the virtual environment of the earth. There is GEOSAT information that needs to be gathered. There will be layers and layers of Earth-2. One layer is the physical simulation of the climate. But other layers will be related to cities and maps and things like that. Before you know it, Earth-2 really becomes Earth-2.
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