Nvidia CEO Jensen Huang Dismisses OpenAI's "Chipotle" Chip: Many Projects Launch, Many Get Canceled

On Wednesday, Nvidia CEO Jensen Huang brushed off OpenAI's new "Chipotle" chip, expressing confidence in Nvidia's technology and ability to supply the AI industry, even as customers develop their own processors.

Jensen Huang Dismisses OpenAI's "Chipotle" Chip Challenge

On CNBC's "Mad Money," host Jim Cramer asked Huang whether he felt offended that a company backed by billions in Nvidia investment is developing chips that could challenge Nvidia.

Huang said he is comfortable with competition and pointed to the volatility of the AI chip industry.

"Many projects launch. Many projects get canceled," Huang said. "We're here to support our partners, and we're going to build the best technology in the world."

He added, "I don't take any of this personally," arguing that Nvidia has enough confidence in its technology and scale to compete with emerging chip makers.

Nvidia CEO Says Competition Won't Stop Its Growth

Huang highlighted Nvidia's broader platform, supply chain, and technology scale as key advantages.

"We have the supply chain and technology scale to be their biggest supplier," he said.

Despite the growing number of custom chips from companies like OpenAI, Alphabet Inc.'s Google, Amazon.com, Inc., and Meta Platforms, Inc., Huang argued Nvidia's market position continues to strengthen.

"Today Nvidia is increasing our share of the AI market," Huang said. "Our growth is accelerating. Our technology leadership is expanding."

OpenAI also continues to rely on Nvidia hardware.

OpenAI's "Chipotle" Chip Beats Nvidia GB300 in Key Tests

These comments came a day after OpenAI released benchmark results for its first custom AI inference chip, "Chipotle," developed in partnership with Broadcom Inc.

OpenAI said the processor delivers more AI work per unit of power and faster response times than Nvidia's GB300.

"Chipotle" is designed specifically for AI inference, meaning it runs trained models and generates responses, rather than training new models. OpenAI said the chip is part of its broader effort to build more of its AI infrastructure in-house.

However, the comparison has limitations. "Chipotle" was not tested against Nvidia's newer Vera Rubin platform, and it is not used for AI training—an area where Nvidia remains deeply entrenched.

Nvidia Revenue Surges 106% on AI Demand

Nvidia reported second-quarter revenue of $96.22 billion, up 106% year over year, beating Wall Street consensus of $92.18 billion.

The company's gross margin was 75%, slightly above the first quarter's 74.9% and higher than the 72.4% from the same period last year.

For the third quarter, Nvidia guided revenue between $105.84 billion and $110.16 billion, representing year-over-year growth of 85.7% to 93.2% compared to the $57.01 billion reported in the same period last year.

Price action: Nvidia shares closed at $209.66, down 1.59%, and rose 4.71% in after-hours trading to $219.53. According to Edge Rankings, Nvidia ranks in the 99th percentile for growth, with positive price trend ratings across short, medium, and long-term horizons.