Nvidia logged another record quarter, with Q3 revenue of $18.12 billion, up 206 percent from a year ago and a 34 percent increase from Q2 that exceeded both its own and analyst projections. The surge, attributed to increasing demand for the chips that drive artificial intelligence, logged primarily under Nvidia’s data center results a record $14.51 billion, up 279 percent from the prior year and 41 percent from Q2. Profits swelled to $9.2 billion, a stunning 1,259 percent increase from 2022’s $680 million. The results for Nvidia’s Q3 were for the three-month period ending October 31.

The Wall Street Journal says “huge investments in AI by tech giants from Microsoft to Amazon.com and by other large corporations have helped propel Nvidia’s sales to unprecedented levels in recent quarters.”

This despite the fact that Nvidia chips are in such high demand there is a perceived shortage, “even for AI systems that can cost hundreds of thousands of dollars each,” WSJ writes, noting that OpenAI “needed tens of thousands of Nvidia’s chips to train its most advanced AI systems.”

“Nvidia GPUs, CPUs, networking, AI foundry services and Nvidia AI Enterprise software are all growth engines in full throttle. The era of generative AI is taking off,” Nvidia founder and CEO Jensen Huang said in an earnings release. “Large language model startups, consumer Internet companies and global cloud service providers were the first movers, and the next waves are starting to build,” he added.

More recently, “nations and regional CSPs are investing in AI clouds to serve local demand, enterprise software companies are adding AI copilots and assistants to their platforms, and enterprises are creating custom AI to automate the world’s largest industries,” Huang explained.

On September 26, Huang celebrated Nvidia’s founding at Denny’s in San Jose, where the company was conceived. The booth now bears a commemorative plaque stating “an idea launched here would change the world. VentureBeat reports the company’s current value at $1.23 trillion.

Nvidia’s rapid growth may be curtailed somewhat by the U.S. government’s recent sanctions preventing advanced chip sales to China. “Historically, China has been 20 percent to 25 percent of data center revenue and that could decline substantially in Q4,” VentureBeat says, noting that “the company doesn’t have good visibility on that for the long-term.”

Nvidia’s Q4 forecast does indicate an expectation of overall growth, to $20 billion in sales, though Reuters writes that “it expects a steep drop in fourth-quarter sales in China, a key revenue generator” accounting for nearly a quarter of Nvidia’s data center sales this year.

The company can also expect increased competition from Intel and AMD for AI chipmaking market share. Even Microsoft will begin making AI chips — the Azure Maia 100 and Cobalt 100, The Verge reports. Nvidia has a new H200 chip optimized for AI for release in 2004, and Oracle, Amazon and Google Cloud have committed to use it, per Bloomberg.