Why Huang says the chip is the wrong thing to watch
On Nvidia’s Q1 FY2027 earnings call on May 20, 2026, Jensen Huang made an argument that surprised analysts: the chip is no longer the company’s most important asset. “Agentic AI has arrived, doing productive work, generating real value and scaling rapidly across companies and industries,” Huang said on the call, per CNBC. CFO Colette Kress then quantified the software compound: Blackwell’s inference performance improved 1.5x in its first month of deployment through software optimizations alone, building on the 4x inference improvement Hopper achieved over two years through CUDA stack updates.
The argument is structural. Competitors can copy a GPU die: silicon designs migrate, manufacturing partnerships shift. What they cannot quickly replicate is the surrounding stack. Huang described this at COMPUTEX 2026 in Taipei on June 1 as a five-layer system: the chip, the system, the AI factory, the applications, and the services. The layers are CUDA’s parallel computing platform, refined over 18 years; NIM microservices, pre-packaged AI containers that let enterprises deploy models without GPU expertise; NVLink’s scale-up networking; Spectrum-X’s scale-out Ethernet; and BlueField’s control plane. Huang argued that competitors can replicate a transistor pattern but not the integrated stack, as Yahoo Finance reported.