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Nvidia CEO Jensen Huang recently reported that his company had a tough second fiscal quarter, with a dramatic slowdown in PC and gaming sales.

Nvidia saw softness due to the war in Ukraine and a slowdown in China, with macroeconomic slowdowns around the world affecting consumer demand in a negative way. Second-quarter gaming revenue was $2.04 billion, down 33% from a year ago and down 44% from the previous quarter.

And yet Huang is holding on to his optimism around some major long-term projects, including building Earth-2, a digital twin of our planet that — with enough supercomputing simulation capability within the Omniverse — could enable scientists to predict climate change for our planet.

Earth-2 will require the best tech that Nvidia can muster, like its newly announced graphics processing unit (GPU) Hopper and its upcoming central processing unit (CPU) Hopper. He still believes that if Nvidia builds the Earth-2 simulation with meter-level accuracy for the entire planet, then we will get the metaverse for free.

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I’ll be moderating an industrial metaverse panel at the upcoming Nvidia GTC online conference on September 19-23. We’ll also have Nvidia speakers at our MetaBeat conference in San Francisco on October 4, and we’ll be talking about the metaverse again at our GamesBeat Summit Next 2022 event in San Francisco on October 25-26.

Here’s an edited transcript of our interview.

Jensen Huang, CEO of Nvidia, introduces Omniverse Avatar.
Jensen Huang, CEO of Nvidia, introduces Omniverse Avatar.

GamesBeat: How do you keep your faith in the metaverse and the longer-term vision when you see things like the current slowdown?

Jensen Huang: Well, the two things are unrelated. Completely unrelated. On the one hand, the macro environment is a combination of all the things around the world that bring that about. It just kept piling on. Although each event, whether in Europe or Asia or the United States, is unrelated to any other, when you keep piling it on, before you know it there’s a breaking point to even the global economy. The macro environment has finally come home to roost.

Starting in June, it started to turn quite sharply. The PC industry experienced the biggest sequential decline in many years. When that happens so quickly — meanwhile, just months before, the supply chain was so tight. Cycle times were long. There’s a lot of goods in inventory, in the supply chain. All of a sudden everything seized up. In our particular case, we’re going to take it head-on and sell into the market at a much lower rate for the next several months. We’ll let the channel normalize, let channel inventory correct. We’ll give ourselves a chance to clear the deck before the next generation comes.

There’s the tactical stuff, which is what’s going on right now, and then there’s the strategic stuff, the future stuff, which you can’t help but be excited about. The early adopters working with us are doing incredible things. The fast rate of advancements we’re making–I’m more optimistic about Omniverse and the work we’re doing there than at just about any time.

Amazon's Omniverse warehouse.
Amazon’s Omniverse warehouse.

GamesBeat: There are forces that will push the metaverse forward in a secular way, then, a way that doesn’t get slowed down by the world economy.

Huang: We’ll make sure it doesn’t. We’re fortunate that our investment in Omniverse is not a separate investment or an orthogonal investment. It builds upon the three things that our company is really good at. We’re good at computer graphics and we’ll keep on pushing that. We’ll keep on advancing and reinventing computer graphics as we speak. We’re going to keep pushing AI. It’s too important. It’s able to solve things that, as you know, we thought were impossible before. Third, scientific computing and physics simulation are fairly profound. The work we do there is insanely important to many industries and many fields of science.

We brought it together. We brought these three pillars together in Omniverse. We’re the perfect company, the perfect set of skills to bring together and create this next generation of the internet. I think we’re the right company to go do this. It’s incredibly hard work, incredibly hard innovation, but it builds on everything we do.

GamesBeat: Which parts do you see taking off first? Do you think the enterprise-oriented digital twins will move this all forward, or do you think gaming metaverses will move the collective metaverse forward?

Huang: Gaming is already doing what it’s doing. I don’t need to tell you how exciting all this stuff is that they’re doing with Fortnite, with Roblox, with brands. There are plenty of things already happening in games. There’s nothing new there, I would say. There’s continued evolution there, but nothing new.

What’s really going to be unbelievable for the industrial metaverse is that Omniverse gives–because it has the universal data exchange, it allows every single tool used in a product design company–you could be a company that builds cars or ships or planes or agriculture or consumer goods or electronics, whatever it is. It allows those companies to have a singular platform from the point of design–every designer, then the CAD engineers, the CAE engineers, the supply chain teams, and the people building the factories, doing the simulations. Everybody across all the organizations within the company can finally be synched together for the first time.

An image from the Nvidia Omniverse Foundational Tech Montage showcasing a virtual ramen shop.
An image from the Nvidia Omniverse Foundational Tech Montage showcasing a virtual ramen shop.

We’re seeing product designers, CAD designers, CAE engineers, operations teams, planning teams–the BMW stuff is all done in the planning teams. They’re all jumping on Omniverse. I think when people realize the benefit–the internet connects us all. The reason why the internet was so incredibly useful was that it’s literally one platform, one data platform, that an entire company can jump on. Omniverse is doing that for all the companies that deal with 3D data for the first time.

Whether it’s in media and entertainment, manufacturing, or product design, we’re seeing so much enthusiasm around it, for this fundamental reason. Once they get it, they say, “Oh my gosh, this is the data platform for 3D companies, people make 3D things.” Companies that make physical things, this is the unifying data platform. Those are the kind of words you use in describing the internet, except this is for 3D. We made it possible, for the first time, for everybody to jump onto one data platform, just like for the internet.

GamesBeat: Do you still believe that the side benefit of doing Earth-2, [the supercomputing simulation that is designed to predict climate change for decades to come], is that you get the metaverse for free?

Huang: Yeah, absolutely. The primary focus of Earth-2 is of course to help policymakers and researchers, scientists, understand the impact of various forces on the future of climate. Unless we can predict climate a billion times faster, we simply won’t be able to do climate simulation with enough accuracy regionally to effect policy changes and whatever new scientific approaches we need to apply to avert climate change. That’s the primary purpose.

Earth-2
The Earth-2 simulation is coming.

But in order to do that we had to invent all kinds of new machine learning models, new physics models. We have to create the virtual environment of the earth. There’s GEOSAT information that has to be pulled together. There will be layers and layers of Earth-2. One layer is the physics simulation of the climate. But other layers will be related to cities and maps and things like that. Before you know it, Earth-2 really becomes Earth-2.

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