Artificial intelligence (AI) technology is going to be big in the long run. It will play a critical role in powering a variety of applications that will help corporations and governments execute tasks efficiently. Not surprisingly, a number of tech giants are betting big on AI, since there's an opportunity to mint billions in this space, and NVIDIA (NASDAQ:NVDA) is no exception.

The graphics specialist has been applying its graphics processing units (GPUs) to train AI models, setting itself up to tap an AI chip market that could be worth $16 billion in 2022, according to Markets and Markets. But NVIDIA doesn't want to be just an AI chip vendor, so it's focused on creating supercomputing platforms that customers can hire for use across several applications.

A man holds a tablet, over which hovers a graphical representation of a brain, representing artificial intelligence.

Image source: Getty Images.

NVIDIA wants to be at the forefront of the AI revolution, and the following three industries can help the company make it big in this space.


NVIDIA recognized early on the potential of applying AI to vehicles. The company launched its first-generation DRIVE PX platform two years ago, hoping to partner with automakers and develop self-driving cars.

NVIDIA's strategy has worked well so far, as it has signed a number of deals with notable automakers and component suppliers to bring AI into automotive. The likes of Tesla, Audi, and Bosch are already using the company's AI-enabled DRIVE PX2 platform to enable self-driving features in cars.

For instance, Audi and NVIDIA are working together to bring an autonomous car to the market by 2020. Meanwhile, component supplier Bosch is going to use NVIDIA's next-generation self-driving-car platform to develop an AI car computer for the mass market. What's more, the GPU specialist will also start supplying its self-driving supercomputer to Toyota. That could be a huge deal, as the Japanese auto giant could probably deploy the technology on a mass scale.

But NVIDIA's automotive AI applications transcend just cars. It also revealed plans for a self-driving truck earlier this year, in collaboration with PACCAR. All of these partnerships have pushed NVIDIA's automotive revenue from just $56 million at the end of fiscal year 2015 to $140 million in the first quarter of fiscal 2018.

And NVIDIA investors can expect the automotive business to get even better, as self-driving-car adoption is forecast to hit 12 million units a year by 2035. However, investors need to be wary of competition from the likes of Intel, which has started making an aggressive push into self-driving cars with its recent acquisitions and partnerships.

Data centers and cloud computing

The huge amount of data generated by Internet of Things applications will have to be processed intelligently and rapidly in the cloud to enable real-time decision-making. Cloud service providers have been increasingly turning to AI, which enables them to automate the analytical and predictive abilities of various cloud-enabled applications.

NVIDIA saw this trend early and launched its Tesla GPU accelerators around five years ago for supercomputing applications. Now, cloud service providers such as and Microsoft are using these accelerators to enhance the AI capabilities and computing power of their data centers.

Microsoft, for instance, has partnered with NVIDIA to develop a hyperscale GPU accelerator for AI-enabled cloud computing, which can be used to handle a variety of AI workloads, including healthcare, self-driving cars, and voice recognition. The modular design of this platform gives data centers a quick way of becoming AI-ready, paving the way for NVIDIA to tap a potentially huge opportunity in this space as AI-related investments increase.

NVIDIA has already seen rampant growth in its data-center business over the past couple of years, with revenue growing from less than $100 million at the end of fiscal 2016 to $409 million in the last-reported quarter. The company is now looking to further push the envelope in this space with its new GPU platform, the Volta, which Amazon has already selected for its cloud computing platform, setting the stage for more growth.


Global Market Insights forecasts that the healthcare AI market could hit $10 billion in revenue by 2020. NVIDIA doesn't want to miss this gravy train, so it's attacking this opportunity with its Deep Learning GPU Training System, known as DIGITS, aiming to build an end-to-end healthcare platform.

NVIDIA's healthcare platform aims to mine patient-related data, doctor reports, medical images, and test results, and then apply AI to study and recognize patterns in a patient's condition to provide a better line of treatment. Hospitals and other healthcare providers have already started using NVIDIA's AI platform. For instance, the clinical data science center of Massachusetts General Hospital is using NVIDIA's DGX-1 deep-learning supercomputer.

AI could turn out to be lifesaving in the medical field, as it can even predict cardiac failure using patient data. So it won't be surprising if more medical institutions start using NVIDIA's technology.

The takeaway

Investors shouldn't forget that AI is still in its nascent stages. The good news is that NVIDIA's automotive and data-center businesses are already benefiting from this technology, which bodes well for the company's business, as increasing AI adoption will open up a bigger opportunity for NVIDIA to deploy its chips and related platforms.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.