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Nvidia Forecasts 70% Growth as OpenAI Develops Jalapeño Chip

Nvidia’s quarterly results show its AI infrastructure business still expanding rapidly. Jalapeño offers an early, narrow efficiency comparison—and signals that more AI companies want custom hardware options.

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Nvidia Forecasts 70% Growth as OpenAI Develops Jalapeño Chip
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OpenAI is developing a custom AI chip called Jalapeño, and the company says it delivered between one-point-five and one-point-nine times more AI work per watt than selected Nvidia systems in its own tests. That is an early efficiency comparison, not evidence that Nvidia has been displaced. The timing matters because Nvidia’s business is still expanding at extraordinary speed. For the three months ending in June, Nvidia reported 96.22 billion dollars in revenue and 53.95 billion dollars in net income. Both figures more than doubled from a year earlier, and the results beat expectations. Nvidia’s finance chief, Colette Kress, also said the company expects 70 percent revenue growth in fiscal 2028—well above the 44 percent analyst consensus. That is a management forecast, not revenue already delivered. Jalapeño’s results come with clear limits. OpenAI tested it on three publicly available models, against selected Nvidia systems, and reported lower latency in those comparisons. So the claim speaks to a defined set of workloads, rather than the broader AI infrastructure market. OpenAI is not alone in pursuing alternatives: Google, AWS, and Meta are developing custom chips too. The immediate picture is a fast-growing Nvidia market alongside more hardware experimentation by its biggest AI customers. The key constraint is whether Jalapeño’s efficiency advantage holds across a much wider range of models and workloads.

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3 key points

OpenAI’s Jalapeño project adds a diversification angle to an Nvidia-led infrastructure market, but its disclosed performance gap is narrow in scope. Nvidia management expects 70% fiscal 2028 revenue growth—well above the 44% analyst consensus—after a strong June quarter, while OpenAI reported 1.5–1.9× more work per watt and lower latency than selected Nvidia systems. The practical read is not an Nvidia replacement:...

  1. 01

    Nvidia posted $96.22 billion in June-quarter revenue and $53.95 billion in net income, with both more than doubling year over year.

  2. 02

    Colette Kress’s 70% fiscal 2028 growth forecast is management’s expectation, not revenue already delivered.

  3. 03

    OpenAI’s efficiency result is company-supplied and limited to selected Nvidia systems and three publicly available models.

Nvidia expects fiscal 2028 revenue growth of 70% after its revenue more than doubled in the June quarter. Yet OpenAI is developing Jalapeño, a custom AI chip that it says outperformed selected Nvidia systems on efficiency in its tests, setting current sales momentum against a push for alternatives in parts of AI hardware.

Nvidia reported $96.22 billion in second-quarter revenue for the three months ended in June, more than double the prior-year figure. Net income rose by more than 100% year over year to $53.95 billion, or $2.22 a share. Its results beat expectations, and its revenue forecast also topped estimates.

Chief Financial Officer Colette Kress put Nvidia’s fiscal 2028 growth expectation well above the analyst consensus cited by CNBC. The forecast is management’s expectation, rather than a result already delivered.

Nvidia’s forecast versus consensus
70%Fiscal 2028 revenue growth

Nvidia CFO Colette Kress said the company expects 70% fiscal 2028 revenue growth, compared with a 44% analyst consensus expectation.

An efficiency claim, not a full-market verdict

OpenAI has begun developing Jalapeño, its own AI chip. The company said it delivered 1.5 to 1.9 times more AI work per watt than selected Nvidia systems across three publicly available models, and that it recorded lower latency in those tests. Those are company-supplied results from a defined set of comparisons.

The effort is not unique to OpenAI. CNBC identified Google, AWS and Meta as other companies developing their own AI chips, and characterized OpenAI as a potential Nvidia competitor in some areas. That competitive pressure is directed at parts of the infrastructure market while Nvidia continues to project rapid revenue growth.

Jalapeño’s disclosed comparison is limited to selected Nvidia systems and three models, so it does not settle how custom chips will fare across broader workloads. The immediate picture is clearer: Nvidia’s reported demand remains strong, while major AI companies are building more hardware options of their own.

Sources

  1. cnbc.comCNBC Daily Open: Nvidia is selling more shovels than ever in the AI gold rush

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