In many ways, this move to AI is reminiscent of the creation of the computer, the PC and the smartphone. In each case, the only initial expertise in technology was with the company championing it: IBM with computers, Apple with PCs, and Palm and Research in Motion for the initial handheld computer. If you haven’t seen the NVIDIA CES keynote, take a moment to view it. You will get an unprecedented view of what is coming fast. The word “disruption” is inadequate to describe what is coming. By the time this AI wave matures, the world will look very little like the world of today and many of us will be functionally obsolete if we don’t aggressively retrain.
The initial successes were tied to the vertical integration of the solution because it required the company with the vision to flesh out the technology before it could be made useful and successful. At CES, NVIDIA showcased where its computing predecessors were. As the leading expert in applied AI, NVIDIA has become a vertically integrated AI solution provider.
Its technology stack is being used to create AIs, and those efforts span from the Agentic AI solutions that do work for you virtually, to the robots and autonomous vehicles that will eventually surround us and alter how we interact with both real and virtual worlds. NVIDIA is at the heart of creating a new universe of sights, sounds, experiences and feelings that blur the lines between what was possible and what will be imagined in the future.
Why Vertical Integration Is Important
One of the problems with existing technology markets is the complexity of the supply chain. These markets are mature, but even so, quality often suffers because one or more suppliers isn’t on the same page as the firm attempting to provide the complete collusion. We have battery problems, modem problems, processor problems and memory problems, largely because each component comes from a different engineering team that has likely never even met their peers for the other components, let alone cooperatively collaborated with them. These markets still work because at least all are close enough to being on the same page to create the resulting products.
But with AI, we don’t yet have a critical mass of expertise. Companies are trying to create solutions, but failure rates have been exceedingly high, which suggests that too many firms selling solutions have little to no idea how to create the parts of solutions they are trying collectively to make. But by vertically integrating, NVIDIA uses its knowledge to not only create solutions that work, but to apply these solutions internally which is accelerating its speed of development and advancement far beyond what otherwise would be possible.
Our first view of how much power this internal AI use has helped NVIDIA is the announcement of its RTX graphics card line. The base card, the RTX 5070, which is priced at under $600, performs in line with NVIDIA’s previous $1,500 card, the RTX 4090, and its new RTX 5090 has twice the performance of the prior card. Typically, 20% increases in performance are considered impressive version-over-version. The new card improved a whopping 200%.
Robotics
Over a decade ago I was at Dell World where I heard how robotics was going to be the next big hardware wave. Ironically, Lenovo seemed to get this and moved into robotics, but Dell did not. Granted, the car companies (especially Tesla) jumped on this opportunity, but NVIDIA realized there needed to be a robotic brain that could be applied to a variety of platforms, and like IBM once did with hard drives (IBM made the components for over 90% of the hard drives made in the world), NVIDIA is moving to provide the core technology for this next massive wave of technology.
And this robotic technology is not only being used to create the robots that will increasingly surround us, but the next generation of rolling and flying vehicles we will use to transport us and our packages around the world. From new offerings like Cosmos that teaches robots how to interact with reality, and older offerings like Omniverse, (large scale simulator), NVIDIA moves from building parts of AI to building full on AI solutions and this is exactly what the market needs right now.
Wrapping Up: The Birth of Physical AI
As we move from concepts like Agentic AI (AIs that act as agents with varying degrees of autonomy), to physical AI (which will power robots and autonomous cars), NVIDIA is the leading creator. This continues to drive its execution, valuation and leadership in the AI market, and we are only at the beginning of this technological revolution.
The level of disruption that is coming is unprecedented in this and any prior age, and this also proves that firms that use AI are far more capable of selling it than firms that don’t. When it comes to use, NVIDIA has no equal. NVIDIA founded this AI revolution, and at CES, it reminded us of that once again.
Ready or not, AI is the giant leap that we are taking together this decade.
