NVIDIA Chief Executive Officer Jensen Huang recently made a bold claim about the modern artificial intelligence industry. Speaking to a large crowd at the Cadence Live 2026 tech conference, Huang admitted that his company builds incredibly expensive computer systems. However, he proudly stated that these pricey machines actually produce the lowest-cost AI tokens in the world. While a single server rack might cost over $2 million to build and install, the massive output makes the final math highly favorable for tech companies.
To understand this bold claim, you first need to understand how artificial intelligence actually reads information. A token serves as the basic building block of AI language, acting much like the simple ABCs we learn in grade school. When a person types a prompt into a chatbot, the computer breaks those words down into thousands of tiny tokens. Generating these tokens quickly requires massive computing power. Some companies try to generate tokens by brute-forcing the process using raw hardware, but this wastes a huge amount of electricity and time.
Huang explained that building a fast computer chip only solves half the problem. A tech company needs a well-guided software system to support the physical hardware. NVIDIA relies heavily on its famous CUDA software stack to make everything run smoothly. The company spent exactly 18 years refining this specific software ecosystem. Because the software and hardware communicate perfectly, an NVIDIA GPU can squeeze out millions of extra tokens without using any extra power.
This exact combination of hardware and software creates what industry experts call a full-stack approach. Huang told the crowd that the future of the entire tech world requires this full-stack thinking. He noted that a successful company must understand the software on top, the physical systems beneath, and the final applications that reach the customer. Nobody else will figure out those complex connections for you. This deep integration allows NVIDIA to dominate the current market completely.
The financial math heavily favors this unified strategy. Tech giants currently spend billions of dollars on NVIDIA’s Blackwell platforms and eagerly await the upcoming Rubin systems. Even though a single data center might drop $500 million on these machines, the cost per token drops drastically. Because these specific computers generate an unprecedented volume of tokens every single second, the actual cost to produce 1 single token hits rock bottom. The systems also deliver the best power efficiency, using far fewer watts of electricity to get the job done.
Huang leaned into his famous sales pitch during the event. He reminded the audience that while he sells an expensive system, he delivers the lowest-cost tokens on the planet. He then repeated his favorite business catchphrase, telling the crowd that the more they buy, the more they save. NVIDIA even created a brand-new way to calculate the total cost of operations for data centers. Instead of just looking at maximum speed, buyers now measure exactly how much money and power it takes to generate 1 token.
The tech industry is now shifting its focus to a new frontier called Agentic AI. These smart software agents can complete complex tasks completely on their own without human help. This shift means computers will need to process billions of extra tokens every single day. NVIDIA faces massive challenges moving forward as rival companies build their own custom chips to fight the upcoming Vera Rubin architecture. Despite severe supply shortages that leave buyers waiting exactly 6 months for delivery, NVIDIA continues to crush its competition and secure massive profits.
