Corporate AI Investment Is Surging, to Nvidia’s Benefit

Nvidia’s chips underpin all of the most advanced AI systems, giving the company a market share estimated at more than 80%.
Nvidia’s chips underpin all of the most advanced AI systems, giving the company a market share estimated at more than 80%.


As CEOs boost budgets for artificial intelligence, the AI chip maker is booming.

The blockbuster earnings report last week from chip maker Nvidia proved that companies are willing to spend big for artificial intelligence. In corporate settings, that money is often allocated directly from the top.

Unlike previous waves of innovation that were funded by information-technology departments’ internal budgets, some companies are setting up allocations just for AI. The money is often earmarked by the chief executive officer, a sign that using the technology is a priority at the highest level.

Nvidia’s chips underpin all of the most advanced AI systems, giving the company a market share estimated at more than 80%. The strength of the AI boom was on full display Wednesday, when the company reported sales of $22.1 billion for the quarter that ended Jan. 28 and forecast $24 billion for its current quarter, each more than triple that of the year-earlier periods and ahead of Wall Street’s bullish expectations.

Much demand is coming from tech companies, which use Nvidia’s GPUs, or graphics processing units, to build the physical infrastructure for AI that supports surging demand from corporate customers.

But as Nvidia’s Chief Financial Officer Colette Kress noted, “Building and deploying AI solutions has reached virtually every industry."

Eli Lilly Chief Information and Digital Officer Diogo Rau said he felt the enthusiasm for the technology during the drugmaker’s annual budget-planning cycle. “I walked out of there with twice as much money from my boss and the rest of the executive committee because everybody wanted to get invested in AI," he said.

Rau, who reports directly to the CEO, said the company set up a pool of money just for funding AI initiatives. He serves as a sort of trustee for how it is doled out, but it doesn’t take away from any other investments the technology department is making. Rau declined to say exactly how much money is going to AI but said “it’s a lot."

“We always want more money, or we thought we always wanted more money, but now we have more than we know what to do with," he said, adding “there’s a lot of pressure on us to innovate."

Out of 400 U.S. CEOs surveyed last year by professional-services firm KPMG, 72% said generative AI is a top investment priority.

Generative AI, a type of artificial intelligence that can create various types of content—including text, images, video and audio—in response to a user’s prompts, surged in popularity after OpenAI released its chatbot ChatGPT in late 2022.

“This last year, we’ve seen generative AI really becoming a whole new application space, a whole new way of doing computing," Jensen Huang, Nvidia’s co-founder and chief executive, said Wednesday. “A whole new industry is being formed, and that’s driving our growth."

What AI can do

CarMax, the largest used-car retailer in the U.S., has employed machine learning, a branch of AI, in a commercial strategy that draws on a combination of online and bricks-and-mortar channels, according to CEO Bill Nash.

“Generative AI is something new that we have begun using in a number of ways to support the business, and I have allocated budget to explore how we can integrate Gen AI into further improving our customer and associate experience," Nash said.

For example, the company has used AI in creating a virtual “sweeper" that examines photos of cars and retouches imperfections in the background, such as a dirty garage floor, Shamim Mohammad, executive vice president and chief information and technology officer, said last year. The company also gives customers near-instant offers for their used cars, a capability that is powered by AI.

CarMax has taken measures to ensure the technology is deployed responsibly and with proper guardrails, Nash said. He said he has made it a priority to educate himself and the board about generative AI’s opportunities.

At insurance provider Travelers, overall technology spending has risen in the last five years and exceeded $1.5 billion in 2023, according to CEO Alan Schnitzer. During that time, the company said, it has expanded spending on strategic technology initiatives by nearly 70%. “That includes a meaningful increase in investments to develop or acquire cutting-edge AI capabilities built on modern cloud technology," Schnitzer said during an earnings call in July.

The potential uses in the insurance industry are many and varied, according to Schnitzer.

Some of Travelers’ current AI capabilities are aimed at driving efficiency through automation, augmenting aspects of underwriting, claims handling, service delivery and more, he said on the call.

“On the most advanced end, we’re leveraging generative AI in large language models, and we’ve been doing so for several years," he said. LLMs are deep learning algorithms, trained on enormous amounts of data, and capable of summarizing, creating, predicting, translating and synthesizing text and other content.

In the company’s Bond & Specialty business, proprietary large language models have processed hundreds of thousands of broker submissions, helping the company reduce intake time from hours to minutes, he said.

“Importantly, we’ve done all that while significantly improving our expense ratio, in no small part thanks to the success of our technology investments," Schnitzer said.

An opportunity

Consulting firm AlixPartners asked about 3,000 executives around the world what they see as their biggest challenges and opportunities. “Candidly, I thought they would come back and say that generative AI was their biggest challenge. In fact, it wasn’t in their top five. But it was the number one opportunity," AlixPartners CEO Simon Freakley said.

The question is why. There are the obvious efficiency plays, such as how call centers and supply chains can work better, which are well understood, according to Freakley. “The less obvious question is how does AI drive growth?" he said. “If I have a point of view, personally, it would be that it’s not the people with the best large language models who will win, it’s the people with the best data sets that will win."

Data was key to the development of consumer-products company Procter & Gamble’s generative AI platform, ChatPG. Launched last year, the platform is used to summarize consumer research and develop concepts that play a role in product development, according to Chief Information Officer Vittorio Cretella. It has helped accelerate “concept ideation" from weeks to hours, according to Cretella.

The launch of ChatPG reflected preparation over the past four years, including investment in data foundations, an “AI factory" and the acquisition and development of the right talent, he said.

“Our leadership understands how investing in AI creates superior solutions for our consumers," Cretella said.

At The Wall Street Journal’s CIO Network Summit in Menlo Park, Calif., this month, Cisco CIO Fletcher Previn said he is working to get more AI funding as a corporate allocation from the top.

“Like everybody else, we have no money because we’re an IT department, and every dollar is spoken for," he said.

Previn said he has been talking to senior leadership to explain the opportunity cost of not getting into generative AI as early as possible. “You don’t want to miss out on maybe the most important technology of the last 100 years because you couldn’t close your Q4 budget," he said.

Write to Isabelle Bousquette at and Steven Rosenbush at

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