Ex-Google CEO Eric Schmidt sees Nvidia as big AI winner: 'You know what to do in the stock market'

Eric Schmidt, who led Google for a decade, told Stanford students that, while he's not one to give investment advice, he sees an obvious play in the stock market that doesn't involve buying shares of his former employer.

Schmidt said, in a video that was posted by Stanford this week and subsequently removed, that big technology companies are planning for increasingly large investments into Nvidia-based artificial intelligence data centers, which could cost as much as $300 billion to build.

"I'm talking to the big companies, and the big companies are telling me they need $20 billion, $50 billion, $100 billion — very very hard," said Schmidt, adding that he's a "close friend" to OpenAI CEO Sam Altman.

Schmidt suggested a huge amount of this spending was going to Nvidia, which makes the dominant data center AI chips, and has already seen revenue increase by more than 200% for three straight quarters. Google has developed chips called Tensor Processing Units (TPUs), which could compete with Nvidia's processors but are still at a much earlier stage.

"If $300 billion is all going to Nvidia, you know what to do in the stock market," Schmidt said. "That's not a stock recommendation." Schmidt didn't say if he owns Nvidia shares.

Schmidt, who was CEO of Google from 2001 to 2011 and remained on the board until 2019, was addressing a class of undergraduates on the topic of AI. He told the Wall Street Journal that he requested the video to be taken down because he had misspoken about Google's lax work culture in the session.

But his candid remarks illustrate the driving force behind Nvidia's rise and the company's central place in the generative AI boom that began in late 2022.

While Nvidia is seeing soaring demand from cloud companies and