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Nvidia CEO Jensen Huang recently announced that his company had a difficult financial second quarter, with a dramatic slowdown in PC and game sales.
Nvidia has experienced a slowdown due to the war in Ukraine and a slowdown in China, where macroeconomic downturns around the world have negatively affected consumer demand. Gaming revenue in the second quarter was $2.04 billion, down 33% from a year ago and 44% from the previous quarter.
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And yet Huang clings to his optimism about some major long-term projects, including the construction of Earth-2, a digital twin of our planet that, with enough supercomputing simulation capability in 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 processor (GPU) Hopper and its upcoming central processor (CPU) Hopper. He still believes that if Nvidia builds the Earth-2 simulation with meter-level precision for the entire planet, then we get the metaverse for free.
MetaBeat will bring together thought leaders to advise on how metaverse technology will transform the way all industries communicate and do business on October 4 in San Francisco, California.
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I will be moderating a panel of industry metaverses at the upcoming Nvidia GTC online conference 19-23. September. We’ll also have Nvidia speakers at our MetaBeat conference in San Francisco on October 4th, and we’ll be talking about the metaverse again at our GamesBeat Summit Next 2022 event in San Francisco on the 25th-26th. October.
Here is an edited transcript of our interview.
GamesBeat: How do you keep faith in the metaverse and the long-term view when you see things like the current slowdown?
Jensen Huang: Well, the two things are not connected. Completely independent. 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 US, is unrelated to any other, there is a tipping point when you keep accumulating it before you even know it, even for the global economy. The macro environment has finally come home.
From June it started spinning quite strongly. The PC industry has experienced the largest 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 many items in stock in the supply chain. Suddenly everything fell apart. In our particular case, we will take it outright and sell into the market at a much lower rate over the next few months. We will let the chain normalize, let the chain inventory correct itself. We are giving 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 that you can’t help but be excited about. Early adopters working with us are doing amazing things. The rapid progress we’re making – I’m more optimistic about the Omniverse and the work we’re doing there than I’ve ever been.
GamesBeat: There are forces that want to move the metaverse forward in a secular way, so in a way that isn’t slowed down by the global economy.
Huang: We want to 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 it. We’re continuing to evolve and reinvent the infographic as we speak. We will continue to push AI. It’s too important. He is able to solve problems that we, as we know, thought were impossible before. Third, the scientific calculation and physical simulation is quite deep. The work we do there is extremely important to many industries and many fields of science.
We brought it together. We have gathered these three pillars 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 taking off first? Do you think corporate digital twins will push all of this forward, or do you think the gaming metaverse will push the collective metaverse forward?
Huang: The game already does what it does. I don’t have to tell you how exciting everything they’re doing with Fortnite, with Roblox, with brands is. There is already a lot going on in the game. There is nothing new in that, I would say. There is continuous development there, but nothing new.
What’s really going to be great for the industrial metaverse is that Omniverse provides—because it has universal data exchange, it enables any tool that’s used in a product design company—you could be a company that builds cars or ships or airplanes or agriculture or consumer goods or electronics, whatever it is. This allows these companies to have a single platform from a design perspective – each designer, then the CAD engineers, the CAE engineers, the supply chain teams and the people who build the factories do the simulations. Everyone in any 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 made in planning teams. They all jump on the Omniverse. I think once people realize the benefits, the internet will connect us all. The reason the Internet was so incredibly useful is that it’s literally a platform, a data platform, that an entire business can jump on. Omniverse does this for all companies 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. When they find out, they say, “Oh my God, this is the data platform for 3D companies, people make 3D things.” Companies that make physical things, this is the unifying data platform. It’s the kind of word you’d use to describe the Internet, except it’s for 3D. For the first time, we allowed everyone to jump on a data platform, just like the Internet.
GamesBeat: Do you still think that the secondary benefit of making Earth-2, [the supercomputing simulation that is designed to predict climate change for decades to come]do you get the metaverse for free?
Huang: Yes, absolutely. The main purpose of Earth-2 is, of course, to help policy makers and researchers, scientists, 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 implement policy changes and all the new scientific approaches that we need to use 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 need to create the virtual environment of the earth. There is GEOSAT information to be collected. 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 stuff like that. Before you know it, Earth-2 really becomes Earth-2.
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