NVIDIA (NASDAQ:NVDA) was one of the hottest tech stocks of 2016, jumping 230% over the past 12 months. The company makes the vast majority of its revenue from gaming -- about 62% in the fiscal fourth quarter 2017 -- but NVIDIA is much more than just a gaming processor company. 

The artificial intelligence (AI) market is quickly expanding, and NVIDIA is positioning itself to make big gains in the space. According to an investor note published by Goldman Sachs' Toshiya Hari a couple of months ago, NVIDIA's total addressable market in AI and deep learning could be as big as $5 billion to $10 billion -- out of a total market of $40 billion.

Take a look: 

Pie chart showing NVIDIA's total addressable market size of 25% of Web 2.0 market.

Data source: Goldman Sachs. Chart by author.

Hari mentioned that NVIDIA already has a lead in the AI space and that the company's competition "continues to face high barriers to entry." He went on to add that NVIDIA already holds nearly 90% of the market for chips that are used for training tasks in machine learning (referring to the company's GPUs).

NVIDIA's position in the burgeoning AI market market comes from several of the company's products. Its Drive PX 2 supercomputer uses deep learning to process image information for self-driving vehicles and help them decide how they should react in certain situations.

More than 80 automakers and Tier 1 automotive suppliers already use a version of Drive PX, including Tesla. The electric-auto maker is rapidly moving toward a self-driving car future and has already added key driverless car technologies -- including NVIDIA's computers -- to make it a reality. 

But the company isn't satisfied just with using its GPU-based AI computers for autonomous driving. NVIDIA's DGX-1 supercomputer server uses machine learning systems to process information faster than previous deep learning machines of its kind, and is currently being used by SAP for enterprise solutions for 320,000 customers. 

NVIDIA says that its latest Pascal chip architecture is "purpose-built for AI," and other major tech companies have already taken notice. Both IBM and Microsoft are using NVIDIA's GPUs for some of their AI services as well."

This may be a long ride 

While NVIDIA's AI opportunity is huge, investors should know one thing: AI makes up only a small percentage of revenue right now.

In the fiscal fourth quarter 2017, NVIDIA brought in just $296 million from its data center division -- 13% of total revenue -- and even its automotive business (which includes the Drive PX 2 AI supercomputer) brings in less than 6% of total revenue. 

That means the company will need to continue releasing new hardware and adding more customers to reach its full AI potential. But at this point, NVIDIA is already well on its way to fully tapping into the AI market, and it's doing so at the perfect time. 

This year may be one of the best years to invest in AI, as tech companies and governments around the world are ramping up investments in artificial intelligence. NVIDIA's current position in AI, potential market share, and focus on new AI hardware should push the company to the top of the list for anyone looking to invest in AI over the long term.  

Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool’s Board of Directors. LinkedIn is owned by Microsoft. Chris Neiger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Nvidia and Tesla. The Motley Fool has a disclosure policy.