Nvidia recently announced its fourth-quarter earnings, capping off a record-breaking year with $130.5 billion in full-year revenue. This represents a remarkable 114% year-over-year increase, largely driven by the soaring demand for its artificial intelligence (AI) chips.
However, the news hasn’t been entirely positive. Many passionate gamers and enthusiasts feel overlooked, particularly as the company has acknowledged shortages of the RTX 50-series but offered little explanation for the problems or details on how they’re being addressed.
Team Green, as Nvidia is often called, used to derive most of its sales from gaming GPUs, a segment that dominated its revenue streams until 2022. The advent of ChatGPT and the broader accessibility of AI to the public spurred tech companies to invest heavily in hardware, particularly data center GPUs manufactured by Nvidia, to train these sophisticated models. This massive demand propelled Nvidia to become the world’s most valuable company by market capitalization.
The company’s data center business experienced explosive growth, increasing from $10.61 billion in December 2021 (39.43% of total revenue) to a staggering $115.19 billion three years later (88.27% of sales). In contrast, the gaming GPU business decreased to $11.35 billion (8.7% of revenue), down from $12.46 billion (46.31%) in the same period.
Given the company’s exceptional financial performance, especially in the data center sector, the persistent issues plaguing the RTX 50-series GPUs are particularly frustrating. Beyond the limited supply, with some retailers estimating up to 16 weeks to fulfill pre-orders, there are additional problems. These include the recurring melting power connector issue that has resurfaced with the RTX 5090, missing ROPs, and even BSOD (Blue Screen of Death) and black screen errors, though a recent driver update addressed the latter issues. The RTX 50-series issues are in stark contrast to the success of the data center business, with record-breaking earnings.
While Nvidia’s focus on its lucrative AI business is understandable, many are disappointed that the company seemingly failed to anticipate and prepare for the substantial demand for the RTX 50-series GPUs upon launch. While previous chip shortages, such as those experienced during the RTX 30-series and RTX 40-series launches, could be attributed to the global supply chain disruptions caused by the COVID-19 pandemic, the current silicon supply chains are relatively stable. This makes the shortage of consumer-side chips difficult for gamers to understand.
At the very least, Nvidia could have potentially manufactured enough chips to prevent the current shortages, a feat that the company’s financial standing clearly allows. An abundant supply of RTX 50-series GPUs would prevent gamers from resorting to extreme measures, such as waiting in long lines for hours (or even days) at retailers, participating in lotteries for the opportunity to purchase a card, or dealing with scalpers who are selling its products at inflated prices (sometimes twice or thrice the MSRP).
While Nvidia’s substantial cash flow from its data center business allows for increased investment in research and development, the situation has left millions of its core fanbase disappointed. Many feel that the company no longer prioritizes PC gamers, particularly given the problematic launch of the RTX 50-series.
