The Six Five team discusses NVIDIA-Accenture Tie Up
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Transcript:
Daniel Newman: Pat, you’re on with John Fortt, Morgan Brennan, CNBC, Overtime Plus, you were talking about a new tie-up. And maybe to people right away it seemed to make sense, and if you backed out it didn’t. But NVIDIA Accenture is some huge amount that Accenture plans to spend standing up a practice. What did you have to say?
Patrick Moorhead: Yeah, so let me spit out the facts real quick. So Accenture is standing up a new business group called the NVIDIA Business Group. They’re going to train 30,000 employees on NVIDIA AI technologies. I wasn’t able to parse actually what those 30,000 employees do. Are they consultants? Are they operators? My guess is knowing Accenture, it’s combination of both. And the training, it covers AI Foundry, which an offering that Accenture has, AI enterprise and NVIDIA Omniverse. So, this goes all the way from back office to front office to the industrial edge. And this whole AI refinery from Accenture, it’s all about agentic AI journeys, which is the hot topic, particularly around enterprises. So, let’s dial back a little. You have trillion-dollar investments that are going on in the picks-and-shovels, the NVIDIAs, the Broadcoms, AMDs, the Marvells and the hyperscalers who are offering IS services like Microsoft, Amazon, Google, Oracle, and then tier twos with Supermicro and Dell.
But we really haven’t seen the big push, right? We’ve got a 10X’er on the picks-and-shovels and the picks-and-shovels services, or actually most of the picks-and-shovels, but we haven’t seen is that downstream enterprise lift as measured by the software companies, right? The SAPs, the Adobe’s, Salesforce, everybody like that. So, this is to accelerate that in the enterprise and get that going. My research suggests that we’re 18 to 24 months from mass enterprise adoption. Some say it’s longer, and if this alliance can shrink that gap, it can have some really, really huge difference. This isn’t the first type of alliance than NVIDIA has done. In fact, six months ago they did a deal with IBM as a practice called IBM Consulting Advantage, and it does similar things and works in conduction with Adobe, AWS, Palo Alto Networks, Microsoft, Salesforce, and SAP. But overall, this is leaning into that potential risk that you and I talk about often here of trillion-dollar investments making a difference with the enterprises and also with consumers.
Daniel Newman: Yeah. Pat, I think one of the big sort of gaping holes that NVIDIA had risk was in the enterprise. We know that with the largest hyperscalers in the world, NVIDIA is powering almost all the training, barring some of the Google stuff they’re doing on TPU. We know that there is a lot of consumption of NVIDIA happening from these hyperscale cloud providers. We also know tier twos are building a lot of capacity. There’s these specialty data centers for doing applications. We know ISVs are building handsomely on NVIDIA’s platform, but enterprises at some point there’s going to be this opportunity to build out their own AI platforms and there’s going to require a lot of expertise. Now, when we did our sort of study early in ’24, we found that there was a huge volume of multimillion dollar POCs for AI, but there was a couple of things that also we were finding out. One, is most of them weren’t successful. You were talking about less than a third.
We were finding out that there was a huge lack of competency. So if you’re a mid-sized enterprise, even a small cap, mid-cap company and you have limited amounts of resources to put towards AI, you’re going to be calling in an SI. And Accenture by the way, was the biggest of the SIs out there in terms of volume. You mentioned IBM, there were another big one on consulting side, but companies were going to turn to organizations like Accenture. So while you might use a hyperscaler to consume AI or you might actually work directly with NVIDIA if you’re a massive company, if you’re like Elon Musk and you’re building a super cluster, you may have that direct interaction. But even Musk was building with Dell like through partnerships or Supermicro. But the bottom line, Pat, is expertise is a problem here. You’ve got to get these POCs up, you’ve got to be able to stand up these applications and build these applications. And most companies don’t have the expertise.
On the other side for Accenture, they also have to think about their own modernization into the future. How are they going to stay relevant in an era of AI? I think in ’23 they did a hundred million of revenue from Gen AI. They booked about 300. From what Julie Sweet CEO said, they’ve booked 3 billion in revenue this year for Gen AI projects. So, they are making substantial headway in the Gen AI space in terms of growth. And why wouldn’t you partner in a big way with NVIDIA? Now this will tie together when we get to some of the broader generative AI notes. NVIDIA is building these frontier, these massive models. Now, open source to compete. The way I see it too is that was sort of a missing piece in the sandbox, but you could take what they’re doing with NIMS, what they’re doing with industry specific, what they’re doing with their CUDA and their developer ecosystem. And suddenly the NVIDIA story becomes really one-stop-shop. Like, do you need anyone outside?
Patrick Moorhead: Yeah.
Daniel Newman: So what I’m saying is, so a lot of these OEMs have become big resellers of Dell, but if you’re Accenture, you can literally do the entire stack top to bottom for healthcare, for financial services. And if I’m Jensen it’s like, “Well, who’s selling big SI or big integration work to these customers that they want to get more and more in deep with Accenture?” So now the question is, at least I’ll ask, Pat, is do all the other big SIs follow and make large commitments? So, we’ve seen like a cascade. First wave was the hyperscalers, second wave were the big OEMs. Third wave has been all the ISVs partnering with NVIDIA. Is the fourth wave, the SIs now will all make big partnership announcements tying their sled to NVIDIA to make sure that they can monetize the NVIDIA demand that’s coming in this next era. And remember Jensen said this week, “The demand for Blackwell is unbelievable. The more you buy, the more you’ll save.” So keep buying everybody.
