Nvidia (NVDA) shares fell 2.4% on Tuesday after CEO Jensen Huang addressed growing concerns about overspending in the AI sector while reaffirming the company’s strong position in chipmaking.
Speaking at Nvidia’s annual software developer conference, Huang defended the company’s leadership in AI processors as competition intensifies, particularly from China’s DeepSeek, which introduced a high-performance chatbot in January.
Huang said AI expansions into building reasoning models and AI agents will require far greater computational needs.
“This last year, this is where almost the entire world got it wrong,” he said.
“The amount of computation needed is easily 100 times more than we thought we needed at this time last year,” Huang said, reiterating a point he’s made in recent months.
Investors have been wary of whether major AI players—including Microsoft (MSFT) and Amazon (AMZN)—are spending too much on Nvidia’s premium AI chips, potentially dampening future demand.
Shares of Nvidia were already trading lower before Huang’s keynote speech.
During the event, Huang unveiled the Blackwell Ultra GPU, the next iteration of the company’s AI chip lineup, which he said will be available in the second half of this year.
While the announcement reinforced Nvidia’s commitment to innovation, it failed to boost investor sentiment.
Nvidia’s stock has fallen around 14% year-to-date, underperforming the Nasdaq Composite Index (IXIC), which has declined 9% over the same period.
The stock is currently trading at 25 times expected earnings, below its five-year average forward price-to-earnings (PE) ratio of 40, based on LSEG data.
Nvidia unveils Blackwell Ultra, Vera Rubin
Nvidia has announced its latest AI chip families, Blackwell Ultra and Vera Rubin, at its annual GTC conference.
The new processors aim to power the next wave of artificial intelligence models and data center computing.
Blackwell Ultra, an upgraded version of the recently launched Blackwell chips, will start shipping in the second half of 2025.
Meanwhile, Vera Rubin, Nvidia’s next-generation GPU, is scheduled for release in 2026.
The company also revealed Vera Rubin Ultra, an enhanced variant arriving in 2027, which will deliver 14 times the computing power of the original Blackwell series.
“Once a year—like clock ticks,” said Nvidia CEO Jensen Huang, emphasizing the company’s new annual chip release cycle.
Nvidia’s AI chips have become essential for training and deploying advanced AI models.
The company’s rapid innovation cycle is critical, as cloud giants such as Microsoft, Google, and Amazon continue investing heavily in Nvidia-powered infrastructure.
Analysts project that the Vera Rubin series could generate nearly $40 billion in revenue in its first year, soaring to over $95 billion by its second year.
Nvidia’s revenue has surged more than sixfold since OpenAI’s ChatGPT launched in 2022, reinforcing its dominance in the AI chip market.
GM and Nvidia partner to develop AI-driven vehicles
Apart from the announcement about the latest chip breakthroughs, General Motors (GM) and Nvidia also announced a strategic collaboration to integrate artificial intelligence into GM’s next-generation vehicles, advanced driver-assistance systems, and manufacturing facilities.
The partnership will see GM utilizing Nvidia’s technology across multiple areas, including in-vehicle systems, factory planning, and robotics.
“The era of physical AI is here, and together with GM, we’re transforming transportation, from vehicles to the factories where they’re made,” said Nvidia CEO Jensen Huang.
The collaboration builds upon GM’s existing use of Nvidia’s artificial intelligence technology.
GM has previously used Nvidia graphics processing units (GPUs) to train AI models for simulations and vehicle validation.
With this new partnership, the automaker will expand its reliance on Nvidia’s AI capabilities to include in-vehicle computing systems and factory design.
What does the deal mean for the companies? Analysts weigh in
Neither GM nor Nvidia disclosed the financial terms of the deal.
However, the collaboration signals Nvidia’s increasing efforts to expand its presence in the automotive sector, which has historically been a small part of its overall business.
More than 20 global automakers, including Mercedes-Benz, Volvo, Volkswagen, and BYD, currently use Nvidia’s system-on-a-chip hardware in their smart vehicle platforms.
For GM, the move underscores its ongoing push to modernize its manufacturing and vehicle technology amid growing competition from both traditional automakers and emerging electric vehicle (EV) startups.
The company has faced pressure to accelerate its transition toward AI-driven automation and autonomous driving systems.
The partnership also comes at a time of rising competition from China and evolving regulatory challenges, including potential tariffs.
Both companies have seen stock declines in 2025, with GM’s shares falling around 8 percent and Nvidia’s stock down 12%.
Despite these headwinds, analysts view the partnership as a strategic move for both companies.
For GM, the integration of Nvidia’s AI could strengthen its position in the autonomous and connected vehicle market.
For Nvidia, the deal represents a crucial expansion beyond its core business of data centers and GPUs, allowing it to deepen its foothold in the automotive sector.
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