Nvidia (NVDA), a titan in the world of AI chipmaking, is setting its sights on a new frontier: humanoid robots. This strategic pivot comes at a time when the company is facing stiff competition from other tech giants like Advanced Micro Devices (AMD), Google (GOOG), and Amazon (AMZN) in the AI hardware space. The Vice President of Robotics at Nvidia, Deepu Talla, has revealed to the Financial Times that the company plans to introduce its next-generation compact computers for humanoid robots, named Tetson Thor, in the first half of 2025. This move is part of Nvidia’s broader strategy to capitalize on what they perceive as an upcoming boom in robotics, particularly in the sector of physical AI.
Despite Nvidia’s significant influence in the AI industry, with its chips powering a wide array of AI applications globally, the robotics segment currently represents only a small fraction of its overall revenue. The company’s third-quarter performance highlighted that while data center revenue dominates with 88% of its $35.1 billion total, there’s a clear push towards diversifying into robotics to safeguard against market saturation and competition. CEO Jensen Huang has acknowledged the surge in industrial robotics investments, pointing to breakthroughs in physical AI as a key driver.
The robotics industry is on the cusp of expansion, with forecasts suggesting that by 2025, humanoid robots could become more visible in various sectors like industries, warehouses, and even domestic settings. Nvidia’s investment in this area isn’t just about hardware; it’s also about fostering the ecosystem. This was evident when Nvidia participated in a $675 million Series B funding round for Figure AI alongside Microsoft (MSFT) and OpenAI, valuing the humanoid robotics company at $2.6 billion, showcasing its commitment to nurturing the next wave of robotics innovation.
The landscape of robotics has seen significant activity in 2024, with companies like Boston Dynamics introducing a new all-electric Atlas robot, capable of movements described as “superhuman.” Other players like Figure, Agility Robotics, and 1X are not only advancing their own technologies but also leveraging partnerships with tech leaders like Nvidia and OpenAI to enhance their robots’ capabilities in communication and task execution. Tesla (TSLA), with its Optimus robots, is another example of repurposing automotive AI technologies for robotics, indicating a trend where technology from one sector is being adapted for another.
Parallel developments in robotics research, such as MIT’s PRoC3S technology, an approach designed to help robots execute open-ended tasks by using large language models (LLMs) to create viable action plans, aim to make robots more adept at safely and efficiently handling complex tasks in environments like warehouses. This technology promises to lower error rates by simulating real-world conditions, allowing for more precise and safe operations. Such advancements are crucial as the demand for automation grows, pushed by e-commerce and logistics needs.
Nvidia’s venture into humanoid robotics with Tetson Thor could very well be its “ChatGPT moment” for physical AI, signaling a potential tipping point where AI-driven robots start to become as ubiquitous and transformative as AI language models have been in software. However, the extent to which these robots will integrate into everyday life by 2025 remains to be seen, with many variables like technology maturity, public acceptance, and economic viability at play. As Nvidia navigates this new terrain, it’s clear that the company is not just following trends but actively shaping the future of robotics, aiming to lead in an area where physical AI meets human ingenuity.
Price Action: As of this writing, Nvidia shares are up 0.71%, trading at $137.98. While this marks a modest gain, the stock has soared nearly 180% year-to-date. Its daily range fluctuates between $134.02 and $138.67, with a 52-week range spanning from $47.32 to $152.89.
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