AI is not just moving the markets anymore. It is increasingly becoming part of the market. Nvidia's latest quarter made its case — $96 billion in revenue, driven almost entirely by AI demand. And then days later the company doubled down, agreeing to pay nearly $13 billion for Hugging Face. Joining me to break it down is physicist and aerospace engineer turned AI strategist Maria Elena Gavilan. Maria, thanks so much and welcome to the show.
Hey Johnny. Thank you for having me. It is great to be here.
What does AI stand right now in the markets and how do you go from early experiment to the $13 trillion story driving every earnings call?
Everything happening in AI right now I like to think of in four layers stacked on top of each other. First you have the chips — that is where all of the story started, and that is where Nvidia plays a big role. Second, you have the infrastructure — everything around putting together data centres, cloud, cooling. Third is the layer around money — how all of this is being financed. And finally you have the distribution layer — who controls what developers are actually building with AI. A few years ago, the whole story around AI was mostly around the first layer. But this week alone, all four layers had headlines. And everything happening is around this very complicated connection between infrastructure, what is happening with different providers, and how the markets are financing this heavy investment in AI.
Nvidia posted $96 billion in a single quarter. Does that prove AI demand is real?
We have to be mindful that this $96 billion in a single quarter is larger than the GDP of many countries. But part of that growth involves something called circular financing. Nvidia is not only selling chips — they are also investing billions into the very companies like OpenAI that turn around and use that money to buy Nvidia chips. The dollars are moving in a circle. Capital intensive industries have used vendor financing for decades — so this is not necessarily wrongdoing. But at this scale, it raises a very hard question: is the demand for AI chips really organic, or is it manufactured because of the circular financing?
Why does circular financing make investors nervous specifically?
Any time these big companies report, the biggest piece that makes investors the most nervous is the capital expenditure — how much they are spending on AI infrastructure. The bigger question is how all this spending on infrastructure is actually paying off. And that is why investors have questions around it.
What is Hugging Face and why does this deal matter?
Hugging Face is a central hub for everything AI, specifically models. This is a place where more than 18 million developers go to find, share, and build with AI models. In less than a decade, Hugging Face has established itself as a very reliable hub for everyone who is an AI practitioner. It is like a town square for the AI field. Nvidia dominates the chip layer. The fact that they are now purchasing this hub for all AI models is really begging the question of what happens next. Nvidia has claimed they are not going to affect access to the different models and this will remain pretty much open source. Their main business is hardware, not software. So the platform is meant to remain open. But this is helping Nvidia grow into that footprint regarding access to AI models. So it is a pretty big deal.
Thank you so much Maria.
Thank you so much for having me.
