Head out of the cloud: Nvidia’s personal-computer shift
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What is the main topic discussed in this episode?
The Economist. Hello and welcome to the intelligence from The Economist. I'm Jason Palmer. Today on the show, the wildly different contenders for Los Angeles Mayor and Lorem Ipsum Text for the corporate world.
First up though
The world's most valuable listed company is having a hell of a year. Again. In March, NVIDIA announced new chips in AI models and ambitions for space-based data centers, even self-driving cars.
Why is Nvidia shifting its AI focus from the cloud to personal computers?
But yesterday Jensen Huang, the firm's leather jacketed boss, shared what he said was far bigger news.
There is no question this reinvention of the computer. Is as big of a deal as the reinvention of the phone into what we now know as the smartphone.
Our global business writer Shailish Chitnis was in the room.
I'm in Taipei this week attending the Computex conference, which is a big conference for AI and semiconductors in Taiwan. During a keynote speech, Jensen Huang brought out two laptops in his hand. And basically that signified that in partnership with Microsoft, they have developed chips specifically for the personal computer. So it's a big break for Nvidia from what they're known for, which is making chips for AI in the data center. This is now getting into the personal computer. So I think it was a big announcement in terms of what it signals for Nvidia's ambitions.
Well let's start with why they want to do that in the first place. I mean, most people uh experience AI as essentially as a cloud service. What is the point of putting it on a computer and and having it local?
I would say there are two reasons for this. The first is the rise of agentic AI, which is basically AI systems which perform pretty complicated tasks themselves.
What are the two main reasons Nvidia wants AI to run locally on laptops?
So maybe the simplest example always given is booking your travel reservation or doing certain things. The agent itself goes out and completes those tasks. The rise of agentic AI has made central processing unit, which is a type of chip that is used predominantly in personal computers, very, very Important because those are the kind of chips that are able to actually orchestrate these actions. Remember, Nvidia is known for making graphic processing units or GPUs. These are chips that are purpose built for training as well as running large language models. But as AI is moving into what is known as inference, where a model responds to user queries, more and more CPUs are starting to become important.
And if I'm a user trying to use these agents every time going to the cloud and running these things can be slow. It can also be expensive. Everybody's heard of people burning through their token budgets and things like that. If you're actually able to run these agents on your own laptop or personal computer, you can do it perhaps faster, but you can also do it cheaper. So that's kind of the driving force. It's basically the evolution of AI towards being more useful. and getting into more applications, that has driven the need for this type of a solution.
And so the bet is that at least the street level consumer use of AI is going to be mostly that. The igentic stuff run locally, on your own, no tokens spent.
Exactly. Now I think what will eventually probably end up happening is it's going to be a combination of some stuff run locally, some stuff going to the cloud. But even if you have a laptop that is actually able to make those decisions and understand what you do locally versus what you send to the cloud, that becomes a big plus. Versus today, when most of us are using either Cloud or Chat GPT, all of that is running on their cloud. So this actually opens up a lot more options.
From a consumer point of view, as much as this interesting stuff might be going on under the bonnet, the experience of agentic AI will look the same for the average person, or does it become different if it is built in NVIDIA inside?
Yeah, so during the keynote, Jensen Wang actually had a good analogy, which I'll repeat here. He said that after smartphones, people use their phones for everything other than phone calls. And so he sees a very similar future with the personal computer as well, which is something that'll do a lot of tasks for us.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:03–0:57
2
Why is Nvidia shifting its AI focus from the cloud to personal computers?
0:57–2:12
3
What are the two main reasons Nvidia wants AI to run locally on laptops?
2:12–4:51
4
How will agentic AI change the user experience on future PCs?
4:51–10:04
5
Is Nvidia’s “super‑chip” strategy a realistic bet against Intel, AMD and others?
10:04–10:41
6
What challenges does Nvidia face integrating its chips with Microsoft’s OS?
10:41–13:28
7
Who are the three candidates in the Los Angeles mayor race and what are their platforms?
13:28–17:54
8
How is homelessness and budget pressure shaping the mayoral campaign?
17:54–20:50