The demand for NVIDIA's rack-scale solutions will increase drastically as JPMorgan's latest report on the supplier Foxconn indicates that a huge demand is incoming.
Foxconn Expects a Huge Chunk of Rack-Scale Demand To Come From 'Sovereign AI' Investments
There's always a limit to the computing power customers can acquire, but in the case of NVIDIA, that limit is yet to be reached since Big Tech and state-backed organizations are now involved in the AI frenzy. In a JPMorgan report discussing Foxconn's business, it is revealed that the 'sovereign AI' segment is expected to reach up to a trillion-dollar valuation fueled by projects like the US's Stargate, Saudi Arabia’s Humain AI, and several other ventures that have financial and logistical backing from the government. Apart from this, Foxconn expects demand for both GB200 and GB300 AI servers to remain robust in the upcoming months.
The interesting fact about this report is that sovereign AI investments will actually drive a decent chunk of NVIDIA's revenue, and Foxconn is more optimistic about Stargate, which is a US-backed project that involves several firms and is said to scale up to a 10GW 'mega-facility'. More importantly, it is estimated that the computing power brought in by Stargate could equate to 70,000 GB200 AI servers, which alone will fulfill NVIDIA's production needs for several years to come. This shows that NVIDIA isn't deprived of demand right now, and there's plenty of prospects for the firm.
NVIDIA's GB300 'Blackwell Ultra' racks have recently seen production ramp up, and with that, JPMorgan estimates that Foxconn's AI revenue will grow intensely moving into next year, increasing by up to 63%. Yearly rack-scale demand could grow up to 50,000–60,000 units, and this includes all configurations, NVL72 and NVL36. For AI server manufacturers, 2025 has proven to be a year of progress, and it seems like it will also continue moving ahead.
NVIDIA and its partners have a lot of AI computing demand to cater to, and with such figures being reported by JPMorgan, it will be interesting to see how customers get the necessary energy onboard to power such systems. However, the report does show us that NVIDIA is ready to take the 'AI bandwagon' to a whole new level, driven by customer demand and the hype for AI advancements.
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