On AI Infrastructure as a Geopolitical Imperative
Last week NVIDIA reported revenue for the first quarter ended April 27, 2025, of $44.1 billion, up 12% from the previous quarter and up 69% from a year ago. CEO Jensen Huang said:
“Global demand for NVIDIA’s AI infrastructure is incredibly strong. AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate.
"Countries around the world are recognizing AI as essential infrastructure — just like electricity and the internet — and NVIDIA stands at the center of this profound transformation.”
Note: Inference costs are the expenses to run AI models to generate outputs after they've been trained. Think of it as the "cost per query" or "cost per use" of an AI system.
Comments in “Trends – Artificial Intelligence (AI)” by Mary Meeker and team included:
“Artificial intelligence is reshaping the modern landscape at breakneck speed. What began as research has scaled into emerging core infrastructure across industries – powering everything from customer support to software development, scientific discovery, education, and manufacturing.
“AI is accelerating, touching more domains, and becoming more embedded in how work gets done. Catalyzing this growth is the global availability of easy-to-use multimodal AI tools (like ChatGPT) on pervasive mobile devices, augmented by a steep decline in inference costs and an explosion in model availability.
“The global race to build and deploy frontier AI systems is increasingly defined by the strategic rivalry between the United States and China... Both nations view AI not only as an economic tailwind but also as a lever of geopolitical influence.
"As technology and geopolitics increasingly intertwine, uncertainty is rising. One thing is certain - it’s gametime for AI, and it’s only getting more intense … and the genie is not going back in the bottle."
OUR TAKE
With AI capabilities treated as critical national infrastructure, countries will likely increase investment in AI research, secure domestic AI supply chains, and attempt to restrict technology transfers.
As inference costs decline and AI becomes easier to use, adoption will accelerate and organizations that don't transition will be at a competitive disadvantage.
NVIDIA's revenue growth and Jensen Huang's comments indicate sustained demand for chipmakers, data centers, storage, power infrastructure, cooling systems, network services and more.