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1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549_FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 28,2024ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT
2、 OF 1934Commission file number:0-23985 NVIDIA CORPORATION(Exact name of registrant as specified in its charter)Delaware94-3177549(State or other jurisdiction of(I.R.S.Employerincorporation or organization)Identification No.)2788 San Tomas Expressway,Santa Clara,California95051 (Address of principal
3、executive offices)(Zip Code)Registrants telephone number,including area code:(408)486-2000Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,$0.001 par value per shareNVDAThe Nasdaq Global Select MarketS
4、ecurities registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of
5、 the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorterperiod that the registrant was required to file such reports),and(2)has been subje
6、ct to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during thepreceding 12 months(or for such shorter
7、period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitions of“large accelerated filer,“accel
8、erated filer,“smaller reporting company,and emerging growth company in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to
9、 use the extended transition period for complying with any new or revised financial accounting standards providedpursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its
10、internal control over financial reporting under Section 404(b)ofthe Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial state
11、ments of the registrant included in the filing reflect the correction of an error to previouslyissued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registran
12、ts executive officers duringthe relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes No The aggregate market value of the voting stock held by non-affiliates of the registrant as of July 28,2023 wa
13、s approximately$1.1 trillion(based on the closing sales price of the registrants common stock asreported by the Nasdaq Global Select Market on July 28,2023).This calculation excludes 105 million shares held by directors and executive officers of the registrant.This calculation does not exclude share
14、sheld by such organizations whose ownership exceeds 5%of the registrants outstanding common stock that have represented to the registrant that they are registered investment advisers or investmentcompanies registered under section 8 of the Investment Company Act of 1940.The number of shares of commo
15、n stock outstanding as of February 16,2024 was 2.5 billion.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrants Proxy Statement for its 2024 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after theen
16、d of the fiscal year covered by this Annual Report on Form 10-K are incorporated by reference into Part III,Items 10-14 of this Annual Report on Form 10-K.Table of ContentsNVIDIA CorporationTable of Contents Page Part I Item 1.Business 4Item 1A.Risk Factors 13Item 1B.Unresolved Staff Comments 31Item
17、 1CCybersecurity 31Item 2.Properties 32Item 3.Legal Proceedings 32Item 4.Mine Safety Disclosures 32 Part II Item 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities 32Item 6.Reserved33Item 7.Managements Discussion and Analysis of Financial Con
18、dition and Results of Operations 34Item 7A.Quantitative and Qualitative Disclosures About Market Risk 43Item 8.Financial Statements and Supplementary Data 44Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 44Item 9A.Controls and Procedures 44Item 9B.Other I
19、nformation 45Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections45 Part III Item 10.Directors,Executive Officers and Corporate Governance 45Item 11.Executive Compensation 46Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters4
20、6Item 13.Certain Relationships and Related Transactions,and Director Independence46Item 14.Principal Accountant Fees and Services 46 Part IV Item 15.Exhibit and Financial Statement Schedules 47Item 16.Form 10-K Summary 83Signatures 842Table of ContentsWhere You Can Find More InformationInvestors and
21、 others should note that we announce material financial information to our investors using our investor relations website,press releases,SECfilings and public conference calls and webcasts.We also use the following social media channels as a means of disclosing information about the company,ourprodu
22、cts,our planned financial and other announcements and attendance at upcoming investor and industry conferences,and other matters and for complyingwith our disclosure obligations under Regulation FD:NVIDIA X Account(https:/ Corporate Blog(http:/)NVIDIA Facebook Page(https:/ LinkedIn Page(http:/ Insta
23、gram Page(https:/ addition,investors and others can view NVIDIA videos on YouTube(https:/www.YouT information we post through these social media channels may be deemed material.Accordingly,investors should monitor these accounts and the blog,inaddition to following our press releases,SEC filings and
24、 public conference calls and webcasts.This list may be updated from time to time.The information wepost through these channels is not a part of this Annual Report on Form 10-K.These channels may be updated from time to time on NVIDIAs investor relationswebsite.Forward-Looking StatementsThis Annual R
25、eport on Form 10-K contains forward-looking statements which are based on our managements beliefs and assumptions and on informationcurrently available to our management.In some cases,you can identify forward-looking statements by terms such as“may,”“will,”“should,”“could,”“goal,”“would,”“expect,”“p
26、lan,”“anticipate,”“believe,”“estimate,”“project,”“predict,”“potential,”and similar expressions intended to identify forward-lookingstatements.These statements involve known and unknown risks,uncertainties and other factors,which may cause our actual results,performance,time framesor achievements to
27、be materially different from any future results,performance,time frames or achievements expressed or implied by the forward-lookingstatements.We discuss many of these risks,uncertainties,and other factors in this Annual Report on Form 10-K in greater detail under the heading“RiskFactors.”Given these
28、 risks,uncertainties,and other factors,you should not place undue reliance on these forward-looking statements.Also,these forward-looking statements represent our estimates and assumptions only as of the date of this filing.You should read this Annual Report on Form 10-K completely andwith the under
29、standing that our actual future results may be materially different from what we expect.We hereby qualify our forward-looking statements by thesecautionary statements.Except as required by law,we assume no obligation to update these forward-looking statements publicly,or to update the reasons actual
30、results could differ materially from those anticipated in these forward-looking statements,even if new information becomes available in the future.All references to“NVIDIA,”“we,”“us,”“our,”or the“Company”mean NVIDIA Corporation and its subsidiaries.In addition,statements that“we believe”and similar
31、statements reflect our beliefs and opinions on the relevant subject.These statements are based uponinformation available to us as of the filing date of this Annual Report on Form 10-K,and while we believe such information forms a reasonable basis for suchstatements,such information may be limited or
32、 incomplete,and our statements should not be read to indicate that we have conducted an exhaustive inquiry into,or review of,all potentially available relevant information.These statements are inherently uncertain and investors are cautioned not to unduly rely upon thesestatements.2024 NVIDIA Corpor
33、ation.All rights reserved.3Table of ContentsPart IItem 1.BusinessOur CompanyNVIDIA pioneered accelerated computing to help solve the most challenging computational problems.NVIDIA is now a full-stack computing infrastructurecompany with data-center-scale offerings that are reshaping industry.Our ful
34、l-stack includes the foundational CUDA programming model that runs on all NVIDIA GPUs,as well as hundreds of domain-specific software libraries,software development kits,or SDKs,and Application Programming Interfaces,or APIs.This deep and broad software stack accelerates the performance andeases the
35、 deployment of NVIDIA accelerated computing for computationally intensive workloads such as artificial intelligence,or AI,model training andinference,data analytics,scientific computing,and 3D graphics,with vertical-specific optimizations to address industries ranging from healthcare and telecom toa
36、utomotive and manufacturing.Our data-center-scale offerings are comprised of compute and networking solutions that can scale to tens of thousands of GPU-accelerated serversinterconnected to function as a single giant computer;this type of data center architecture and scale is needed for the developm
37、ent and deployment of modernAI applications.The GPU was initially used to simulate human imagination,enabling the virtual worlds of video games and films.Today,it also simulates human intelligence,enabling a deeper understanding of the physical world.Its parallel processing capabilities,supported by
38、 thousands of computing cores,are essential for deeplearning algorithms.This form of AI,in which software writes itself by learning from large amounts of data,can serve as the brain of computers,robots and self-driving cars that can perceive and understand the world.GPU-powered AI solutions are bein
39、g developed by thousands of enterprises to deliver services andproducts that would have been immensely difficult or even impossible with traditional coding.Examples include generative AI,which can create new contentsuch as text,code,images,audio,video,and molecule structures,and recommendation syste
40、ms,which can recommend highly relevant content such asproducts,services,media or ads using deep neural networks trained on vast datasets that capture the user preferences.NVIDIA has a platform strategy,bringing together hardware,systems,software,algorithms,libraries,and services to create unique val
41、ue for the markets weserve.While the computing requirements of these end markets are diverse,we address them with a unified underlying architecture leveraging our GPUs andnetworking and software stacks.The programmable nature of our architecture allows us to support several multi-billion-dollar end
42、markets with the sameunderlying technology by using a variety of software stacks developed either internally or by third-party developers and partners.The large and growing numberof developers and installed base across our platforms strengthens our ecosystem and increases the value of our platform t
43、o our customers.Innovation is at our core.We have invested over$45.3 billion in research and development since our inception,yielding inventions that are essential to moderncomputing.Our invention of the GPU in 1999 sparked the growth of the PC gaming market and redefined computer graphics.With our
44、introduction of the CUDAprogramming model in 2006,we opened the parallel processing capabilities of our GPU to a broad range of compute-intensive applications,paving the way forthe emergence of modern AI.In 2012,the AlexNet neural network,trained on NVIDIA GPUs,won the ImageNet computer image recogn
45、ition competition,marking the“Big Bang”moment of AI.We introduced our first Tensor Core GPU in 2017,built from the ground-up for the new era of AI,and our first autonomousdriving system-on-chips,or SoC,in 2018.Our acquisition of Mellanox in 2020 expanded our innovation canvas to include networking a
46、nd led to the introductionof a new processor class the data processing unit,or DPU.Over the past 5 years,we have built full software stacks that run on top of our GPUs and CUDA tobring AI to the worlds largest industries,including NVIDIA DRIVE stack for autonomous driving,Clara for healthcare,and Om
47、niverse for industrial digitalization;and introduced the NVIDIA AI Enterprise software essentially an operating system for enterprise AI applications.In 2023,we introduced our first data centerCPU,Grace,built for giant-scale AI and high-performance computing.With a strong engineering culture,we driv
48、e fast,yet harmonized,product and technologyinnovations in all dimensions of computing including silicon,systems,networking,software and algorithms.More than half of our engineers work on software.The worlds leading cloud service providers,or CSPs,and consumer internet companies use our data center-
49、scale accelerated computing platforms to enable,accelerate or enrich the services they deliver to billions of end users,including AI solutions and assistants,search,recommendations,social networking,onlineshopping,live video,and translation.Enterprises and startups across a broad range of industries
50、 use our accelerated computing platforms to build new generative AI-enabled products and services,or to dramatically accelerate and reduce the costs of their workloads and workflows.The enterprise software industry uses them for new AI assistants andchatbots;the transportation industry for autonomou
51、s driving;the healthcare industry for accelerated and computer-aided drug discovery;and the financialservices industry for customer support and fraud detection.4Table of ContentsResearchers and developers use our computing solutions to accelerate a wide range of important applications,from simulatin
52、g molecular dynamics to climateforecasting.With support for more than 3,500 applications,NVIDIA computing enables some of the most promising areas of discovery,from climate prediction tomaterials science and from wind tunnel simulation to genomics.Including GPUs and networking,NVIDIA powers over 75%
53、of the supercomputers on the globalTOP500 list,including 24 of the top 30 systems on the Green500 list.Gamers choose NVIDIA GPUs to enjoy immersive,increasingly cinematic virtual worlds.In addition to serving the growing number of gamers,the market for PCGPUs is expanding because of the burgeoning p
54、opulation of live streamers,broadcasters,artists,and creators.With the advent of generative AI,we expect abroader set of PC users to choose NVIDIA GPUs for running generative AI applications locally on their PC,which is critical for privacy,latency,and cost-sensitiveAI applications.Professional arti
55、sts,architects and designers use NVIDIA partner products accelerated with our GPUs and software platform for a range of creative and designuse cases,such as creating visual effects in movies or designing buildings and products.In addition,generative AI is expanding the market for our workstation-cla
56、ss GPUs,as more enterprise customers develop and deploy AI applications with their data on-premises.Headquartered in Santa Clara,California,NVIDIA was incorporated in California in April 1993 and reincorporated in Delaware in April 1998.Our BusinessesWe report our business results in two segments.Th
57、e Compute&Networking segment is comprised of our Data Center accelerated computing platforms and end-to-end networking platforms including Quantumfor InfiniBand and Spectrum for Ethernet;our NVIDIA DRIVE automated-driving platform and automotive development agreements;Jetson robotics and otherembedd
58、ed platforms;NVIDIA AI Enterprise and other software;and DGX Cloud software and services.The Graphics segment includes GeForce GPUs for gaming and PCs,the GeForce NOW game streaming service and related infrastructure;Quadro/NVIDIARTX GPUs for enterprise workstation graphics;virtual GPU,or vGPU,softw
59、are for cloud-based visual and virtual computing;automotive platforms forinfotainment systems;and Omniverse Enterprise software for building and operating metaverse and 3D internet applications.Our MarketsWe specialize in markets where our computing platforms can provide tremendous acceleration for
60、applications.These platforms incorporate processors,interconnects,software,algorithms,systems,and services to deliver unique value.Our platforms address four large markets where our expertise is critical:DataCenter,Gaming,Professional Visualization,and Automotive.Data CenterThe NVIDIA Data Center pl
61、atform is focused on accelerating the most compute-intensive workloads,such as AI,data analytics,graphics and scientificcomputing,delivering significantly better performance and power efficiency relative to conventional CPU-only approaches.It is deployed in cloud,hyperscale,on-premises and edge data
62、 centers.The platform consists of compute and networking offerings typically delivered to customers as systems,subsystems,ormodules,along with software and services.Our compute offerings include supercomputing platforms and servers,bringing together our energy efficient GPUs,DPUs,interconnects,and f
63、ully optimized AIand high-performance computing,or HPC,software stacks.In addition,they include NVIDIA AI Enterprise software;our DGX Cloud service;and a growing bodyof acceleration libraries,APIs,SDKs,and domain-specific application frameworks.Our networking offerings include end-to-end platforms f
64、or InfiniBand and Ethernet,consisting of network adapters,cables,DPUs,and switch systems,as well asa full software stack.This has enabled us to architect data center-scale computing platforms that can interconnect thousands of compute nodes with high-performance networking.While historically the ser
65、ver was the unit of computing,as AI and HPC workloads have become extremely large spanning thousands ofcompute nodes,the data center has become the new unit of computing,with networking as an integral part.Our end customers include the worlds leading public cloud and consumer internet companies,thou
66、sands of enterprises and startups,and public sector entities.We work with industry leaders to help build or transform their applications and data center infrastructure.Our direct customers include original equipmentmanufacturers,or OEMs,original device manufacturers,or ODMs,system integrators and di
67、stributors which we partner with to help bring our products tomarket.We also have partnerships in automotive,healthcare,financial services,manufacturing,and retail among others,to accelerate the adoption of AI.5Table of ContentsAt the foundation of the NVIDIA accelerated computing platform are our G
68、PUs,which excel at parallel workloads such as the training and inferencing of neuralnetworks.They are available in the NVIDIA accelerated computing platform and in industry standard servers from every major cloud provider and server maker.Beyond GPUs,our data center platform expanded to include DPUs
69、 in fiscal year 2022 and CPUs in fiscal year 2024.We can optimize across the entirecomputing,networking and storage stack to deliver data center-scale computing solutions.While our approach starts with powerful chips,what makes it a full-stack computing platform is our large body of software,includi
70、ng the CUDA parallelprogramming model,the CUDA-X collection of acceleration libraries,APIs,SDKs,and domain-specific application frameworks.In addition to software delivered to customers as an integral part of our data center computing platform,we offer paid licenses to NVIDIA AI Enterprise,acomprehe
71、nsive suite of enterprise-grade AI software and NVIDIA vGPU software for graphics-rich virtual desktops and workstations.In fiscal year 2024,we launched the NVIDIA DGX Cloud,an AI-training-as-a-service platform which includes cloud-based infrastructure and software for AI,customizable pretrained AI
72、models,and access to NVIDIA experts.We have partnered with leading cloud service providers to host this service in their datacenters.GamingGaming is the largest entertainment industry,with PC gaming as the predominant platform.Many factors propel its growth,including new high production valuegames a
73、nd franchises,the continued rise of competitive gaming,or eSports,social connectivity and the increasing popularity of game streamers,modders,orgamers who remaster games,and creators.Our gaming platforms leverage our GPUs and sophisticated software to enhance the gaming experience with smoother,high
74、er quality graphics.We developedNVIDIA RTX to bring next generation graphics and AI to games.NVIDIA RTX features ray tracing technology for real-time,cinematic-quality rendering.Raytracing,which has long been used for special effects in the movie industry,is a computationally intensive technique tha
75、t simulates the physical behavior of lightto achieve greater realism in computer-generated scenes.NVIDIA RTX also features deep learning super sampling,or NVIDIA DLSS,our AI technology thatboosts frame rates while generating beautiful,sharp images for games.RTX GPUs will also accelerate a new genera
76、tion of AI applications.With an installedbase of over 100 million AI capable PCs,more than 500 RTX AI-enabled applications and games,and a robust suite of development tools,RTX is already the AIPC leader.Our products for the gaming market include GeForce RTX and GeForce GTX GPUs for gaming desktop a
77、nd laptop PCs,GeForce NOW cloud gaming forplaying PC games on underpowered devices,as well as SoCs and development services for game consoles.Professional VisualizationWe serve the Professional Visualization market by working closely with independent software vendors,or ISVs,to optimize their offeri
78、ngs for NVIDIA GPUs.OurGPU computing platform enhances productivity and introduces new capabilities for critical workflows in many fields,such as design and manufacturing anddigital content creation.Design and manufacturing encompass computer-aided design,architectural design,consumer-products manuf
79、acturing,medicalinstrumentation,and aerospace.Digital content creation includes professional video editing and post-production,special effects for films,and broadcast-television graphics.The NVIDIA RTX platform makes it possible to render film-quality,photorealistic objects and environments with phy
80、sically accurate shadows,reflections andrefractions using ray tracing in real-time.Many leading 3D design and content creation applications developed by our ecosystem partners now support RTX,allowing professionals to accelerate and transform their workflows with NVIDIA RTX GPUs and software.We offe
81、r NVIDIA Omniverse as a development platform and operating system for building virtual world simulation applications,available as a softwaresubscription for enterprise use and free for individual use.Industrial enterprises are adopting Omniverses 3D and simulation technologies to digitalize theircom
82、plex physical assets,processes,and environments building digital twins of factories,real time 3D product configurators,testing and validating autonomousrobots and vehicles,powered by NVIDIA accelerated computing infrastructure on-premises and in the cloud.AutomotiveAutomotive market is comprised of
83、platform solutions for automated driving and in-vehicle cockpit computing.Leveraging our technology leadership in AI andbuilding on our long-standing automotive relationships,we are delivering a complete end-to-end solution for the AV market under the DRIVE Hyperion brand.Wehave demonstrated multipl
84、e applications of AI within the car:AI can drive the car itself as a pilot in fully autonomous mode or it can also be a co-pilot,assistingthe human driver while creating a safer driving experience.6Table of ContentsWe are working with several hundred partners in the automotive ecosystem including au
85、tomakers,truck makers,tier-one suppliers,sensor manufacturers,automotive research institutions,HD mapping companies,and startups to develop and deploy AI systems for self-driving vehicles.Our unified AI computingarchitecture starts with training deep neural networks using our Data Center computing s
86、olutions,and then running a full perception,fusion,planning,and controlstack within the vehicle on the NVIDIA DRIVE Hyperion platform.DRIVE Hyperion consists of the high-performance,energy efficient DRIVE AGX computinghardware,a reference sensor set that supports full self-driving capability as well
87、 as an open,modular DRIVE software platform for autonomous driving,mapping,and parking services,and intelligent in-vehicle experiences.In addition,we offer a scalable data center-based simulation solution,NVIDIA DRIVE Sim,based on NVIDIA Omniverse software,for digital cockpitdevelopment,as well as f
88、or testing and validating a self-driving platform.Our unique end-to-end,software-defined approach is designed for continuousinnovation and continuous development,enabling cars to receive over-the-air updates to add new features and capabilities throughout the life of a vehicle.Business StrategiesNVI
89、DIAs key strategies that shape our overall business approach include:Advancing the NVIDIA accelerated computing platform.Our accelerated computing platform can solve complex problems in significantly less time and withlower power consumption than alternative computational approaches.Indeed,it can he
90、lp solve problems that were previously deemed unsolvable.We work todeliver continued performance leaps that outpace Moores Law by leveraging innovation across the architecture,chip design,system,interconnect,and softwarelayers.This full-stack innovation approach allows us to deliver order-of-magnitu
91、de performance advantages relative to legacy approaches in our target markets,which include Data Center,Gaming,Professional Visualization,and Automotive.While the computing requirements of these end markets are diverse,weaddress them with a unified underlying architecture leveraging our GPUs,CUDA an
92、d networking technologies as the fundamental building blocks.Theprogrammable nature of our architecture allows us to make leveraged investments in research and development:we can support several multi-billion-dollar endmarkets with shared underlying technology by using a variety of software stacks d
93、eveloped either internally or by third-party developers and partners.We utilizethis platform approach in each of our target markets.Extending our technology and platform leadership in AI.We provide a complete,end-to-end accelerated computing platform for AI,addressing both trainingand inferencing.Th
94、is includes full-stack data center-scale compute and networking solutions across processing units,interconnects,systems,and software.Ourcompute solutions include all three major processing units in AI servers GPUs,CPUs,and DPUs.GPUs are uniquely suited to AI,and we will continue to addAI-specific fe
95、atures to our GPU architecture to further extend our leadership position.In addition,we offer DGX Cloud,an AI-training-as-a-service platform,andNeMo a complete solution for building enterprise-ready Large Language Models,or LLMs,using open source and proprietary LLMs created by NVIDIA andthird parti
96、es.Our AI technology leadership is reinforced by our large and expanding ecosystem in a virtuous cycle.Our computing platforms are available fromvirtually every major server maker and CSP,as well as on our own AI supercomputers.There are over 4.7 million developers worldwide using CUDA and ourother
97、software tools to help deploy our technology in our target markets.We evangelize AI through partnerships with hundreds of universities and thousands ofstartups through our Inception program.Additionally,our Deep Learning Institute provides instruction on the latest techniques on how to design,train,
98、and deployneural networks in applications using our accelerated computing platform.Extending our technology and platform leadership in computer graphics.We believe that computer graphics infused with AI is fundamental to thecontinued expansion and evolution of computing.We apply our research and dev
99、elopment resources to enhance the user experience for consumerentertainment and professional visualization applications and create new virtual world and simulation capabilities.Our technologies are instrumental in drivingthe gaming,design,and creative industries forward,as developers leverage our li
100、braries and algorithms to deliver an optimized experience on our GeForce andNVIDIA RTX platforms.Our computer graphics platforms leverage AI end-to-end,from the developer tools and cloud services to the Tensor Cores included in allRTX-class GPUs.For example,NVIDIA Avatar Cloud Engine,or ACE,is a sui
101、te of technologies that help developers bring digital avatars to life with generativeAI,running in the cloud or locally on the PC.GeForce Experience enhances each gamers experience by optimizing their PCs settings,as well as enabling therecording and sharing of gameplay.Our Studio drivers enhance an
102、d accelerate a number of popular creative applications.Omniverse is real-time 3D designcollaboration and virtual world simulation software that empowers artists,designers,and creators to connect and collaborate in leading design applications.Wealso enable interactive graphics applications-such as ga
103、mes,movie and photo editing and design software-to be accessed by almost any device,almostanywhere,through our cloud platforms such as vGPU for enterprise and GeForce NOW for gaming.Advancing the leading autonomous vehicle platform.We believe the advent of autonomous vehicles,or AV,and electric vehi
104、cles,or EV,is revolutionizingthe transportation industry.The algorithms required for autonomous driving-such as perception,localization,and planning-are too complex for legacy hand-coded approaches and will use multiple neural networks instead.In addition,EV makers are looking for next-generation ce
105、ntralized car computers that integratea wide range of intelligent functions into a single AI compute platform.Therefore,we provide an AI-based hardware and software solution,designed andimplemented from the ground up based on automotive safety standards,for the AV and EV market under the DRIVE brand
106、,which we are bringing to marketthrough our partnerships with automotive OEMs,7Table of Contentstier-1 suppliers,and start-ups.Our AV solution also includes the GPU-based hardware required to train the neural networks before their in-vehicle deployment,as well as to re-simulate their operation prior
107、 to any over-the-air software updates.We believe our comprehensive,top-to-bottom and end-to-end approach willenable the transportation industry to solve the complex problems arising from the shift to autonomous driving.Leveraging our intellectual property,or IP.We believe our IP is a valuable asset
108、that can be accessed by our customers and partners through license anddevelopment agreements when they desire to build such capabilities directly into their own products or have us do so through a custom development.Suchlicense and development arrangements can further enhance the reach of our techno
109、logy.Sales and MarketingOur worldwide sales and marketing strategy is key to achieving our objective of providing markets with our high-performance and efficient computing platformsand software.Our sales and marketing teams,located across our global markets,work closely with end customers and variou
110、s industry ecosystems through ourpartner network.Our partner network incorporates global,regional and specialized CSPs,OEMs,ODMs,system integrators,independent software vendors,orISVs,add-in board manufacturers,or AIBs,distributors,automotive manufacturers and tier-1 automotive suppliers,and other e
111、cosystem participants.Members of our sales team have technical expertise and product and industry knowledge.We also employ a team of application engineers and solutionarchitects to provide pre-sales assistance to our partner network in designing,testing,and qualifying system designs that incorporate
112、 our platforms.Forexample,our solution architects work with CSPs to provide pre-sales assistance to optimize their hardware and software infrastructure for generative AI and LLMtraining and deployment.They also work with foundation model and enterprise software developers to optimize the training an
113、d fine-tuning of their models andservices,and with enterprise end-users,often in collaboration with their global system integrator of choice,to fine-tune models and build AI applications.Webelieve that the depth and quality of our design support are key to improving our partner networks time-to-mark
114、et,maintaining a high level of customersatisfaction,and fostering relationships that encourage our end customers and partner network to use the next generation of our products within each platform.To encourage the development of applications optimized for our platforms and software,we seek to establ
115、ish and maintain strong relationships in the softwaredevelopment community.Engineering and marketing personnel engage with key software developers to promote and discuss our platforms,as well as toascertain individual product requirements and solve technical problems.Our developer program supports t
116、he development of AI frameworks,SDKs,and APIs forsoftware applications and game titles that are optimized for our platforms.Our Deep Learning Institute provides in-person and online training for developers inindustries and organizations around the world to build AI and accelerated computing applicat
117、ions that leverage our platforms.SeasonalityOur computing platforms serve a diverse set of markets such as data centers,gaming,professional visualization,and automotive.Our desktop gaming productstypically see stronger revenue in the second half of our fiscal year.Historical seasonality trends may n
118、ot repeat.ManufacturingWe utilize a fabless and contracting manufacturing strategy,whereby we employ and partner with key suppliers for all phases of the manufacturing process,including wafer fabrication,assembly,testing,and packaging.We use the expertise of industry-leading suppliers that are certi
119、fied by the InternationalOrganization for Standardization in such areas as fabrication,assembly,quality control and assurance,reliability,and testing.Additionally,we can avoid many ofthe significant costs and risks associated with owning and operating manufacturing operations.While we may directly p
120、rocure certain raw materials used in theproduction of our products,such as memory,substrates,and a variety of components,our suppliers are responsible for procurement of most raw materials usedin the production of our products.As a result,we can focus our resources on product design,quality assuranc
121、e,marketing,and customer support.In periods ofgrowth,we may place non-cancellable inventory orders for certain product components in advance of our historical lead times,pay premiums,or providedeposits to secure future supply and capacity and may need to continue to do so.We have expanded our suppli
122、er relationships to build redundancy and resilience in our operations to provide long-term manufacturing capacity aligned withgrowing customer demand.Our supply chain is concentrated in the Asia-Pacific region.We utilize foundries,such as Taiwan Semiconductor ManufacturingCompany Limited,or TSMC,and
123、 Samsung Electronics Co.,Ltd.,or Samsung,to produce our semiconductor wafers.We purchase memory from MicronTechnology,Inc.,SK Hynix Inc.,and Samsung.We utilize CoWoS technology for semiconductor packaging.We engage with independent subcontractors andcontract manufacturers such as Hon Hai Precision I
124、ndustry Co.,Ltd.,Wistron Corporation,and Fabrinet to perform assembly,testing and packaging of our finalproducts.8Table of ContentsCompetitionThe market for our products is intensely competitive and is characterized by rapid technological change and evolving industry standards.We believe that thepri
125、ncipal competitive factors in this market are performance,breadth of product offerings,access to customers and partners and distribution channels,softwaresupport,conformity to industry standard APIs,manufacturing capabilities,processor pricing,and total system costs.We believe that our ability to re
126、maincompetitive will depend on how well we are able to anticipate the features and functions that customers and partners will demand and whether we are able todeliver consistent volumes of our products at acceptable levels of quality and at competitive prices.We expect competition to increase from b
127、oth existingcompetitors and new market entrants with products that may be lower priced than ours or may provide better performance or additional features not provided byour products.In addition,it is possible that new competitors or alliances among competitors could emerge and acquire significant ma
128、rket share.A significant source of competition comes from companies that provide or intend to provide GPUs,CPUs,DPUs,embedded SoCs,and other accelerated,AIcomputing processor products,and providers of semiconductor-based high-performance interconnect products based on InfiniBand,Ethernet,Fibre Chann
129、el,and proprietary technologies.Some of our competitors may have greater marketing,financial,distribution and manufacturing resources than we do and may bemore able to adapt to customers or technological changes.We expect an increasingly competitive environment in the future.Our current competitors
130、include:suppliers and licensors of hardware and software for discrete and integrated GPUs,custom chips and other accelerated computing solutions,includingsolutions offered for AI,such as Advanced Micro Devices,Inc.,or AMD,Huawei Technologies Co.Ltd.,or Huawei,and Intel Corporation,or Intel;large clo
131、ud services companies with internal teams designing hardware and software that incorporate accelerated or AI computing functionality as partof their internal solutions or platforms,such as Alibaba Group,Alphabet Inc.,Amazon,Inc.,or Amazon,Baidu,Inc.,Huawei,and Microsoft Corporation,or Microsoft;supp
132、liers of Arm-based CPUs and companies that incorporate hardware and software for CPUs as part of their internal solutions or platforms,such asAmazon,Huawei,and Microsoft;suppliers of hardware and software for SoC products that are used in servers or embedded into automobiles,autonomous machines,and
133、gamingdevices,such as Ambarella,Inc.,AMD,Broadcom Inc.,or Broadcom,Intel,Qualcomm Incorporated,Renesas Electronics Corporation,and Samsung,or companies with internal teams designing SoC products for their own products and services,such as Tesla,Inc.;andnetworking products consisting of switches,netw
134、ork adapters(including DPUs),and cable solutions(including optical modules)include such as AMD,Arista Networks,Broadcom,Cisco Systems,Inc.,Hewlett Packard Enterprise Company,Huawei,Intel,Lumentum Holdings,and Marvell TechnologyGroup as well as internal teams of system vendors and large cloud service
135、s companies.Patents and Proprietary RightsWe rely primarily on a combination of patents,trademarks,trade secrets,employee and third-party nondisclosure agreements,and licensing arrangements toprotect our IP in the United States and internationally.Our currently issued patents have expiration dates f
136、rom February 2024 to August 2043.We havenumerous patents issued,allowed,and pending in the United States and in foreign jurisdictions.Our patents and pending patent applications primarily relate toour products and the technology used in connection with our products.We also rely on international trea
137、ties,organizations,and foreign laws to protect our IP.The laws of certain foreign countries in which our products are or may be manufactured or sold,including various countries in Asia,may not protect our productsor IP rights to the same extent as the laws of the United States.This decreased protect
138、ion makes the possibility of piracy of our technology and products morelikely.We continuously assess whether and where to seek formal protection for innovations and technologies based on such factors as:the location in which our products are manufactured;our strategic technology or product direction
139、s in different countries;the degree to which IP laws exist and are meaningfully enforced in different jurisdictions;andthe commercial significance of our operations and our competitors operations in particular countries and regions.We have licensed technology from third parties and expect to continu
140、e entering such license agreements.9Table of ContentsGovernment RegulationsOur worldwide business activities are subject to various laws,rules,and regulations of the United States as well as of foreign governments.During the third quarter of fiscal year 2023,the U.S.government,or the USG,announced l
141、icensing requirements that,with certain exceptions,impact exports toChina(including Hong Kong and Macau)and Russia of our A100 and H100 integrated circuits,DGX or any other systems or boards which incorporate A100 orH100 integrated circuits.In July 2023,the USG informed us of an additional licensing
142、 requirement for a subset of A100 and H100 products destined to certain customers and otherregions,including some countries in the Middle East.In October 2023,the USG announced new and updated licensing requirements that became effective in our fourth quarter of fiscal year 2024 for exports toChina
143、and Country Groups D1,D4,and D5(including but not limited to Saudi Arabia,the United Arab Emirates,and Vietnam,but excluding Israel)of ourproducts exceeding certain performance thresholds,including A100,A800,H100,H800,L4,L40,L40S and RTX 4090.The licensing requirements also apply tothe export of pro
144、ducts exceeding certain performance thresholds to a party headquartered in,or with an ultimate parent headquartered in,Country Group D5,including China.On October 23,2023,the USG informed us the licensing requirements were effective immediately for shipments of our A100,A800,H100,H800,and L40S produ
145、cts.Our competitive position has been harmed,and our competitive position and future results may be further harmed in the long term,if there are further changes inthe USGs export controls.Given the increasing strategic importance of AI and rising geopolitical tensions,the USG has changed and may aga
146、in change theexport control rules at any time and further subject a wider range of our products to export restrictions and licensing requirements,negatively impacting ourbusiness and financial results.In the event of such change,we may be unable to sell our inventory of such products and may be unab
147、le to develop replacementproducts not subject to the licensing requirements,effectively excluding us from all or part of the China market,as well as other impacted markets,including theMiddle East.While we work to enhance the resiliency and redundancy of our supply chain,which is currently concentra
148、ted in the Asia-Pacific region,new and existing exportcontrols or changes to existing export controls could limit alternative manufacturing locations and negatively impact our business.Refer to“Item 1A.Risk Factors Risks Related to Regulatory,Legal,Our Stock and Other Matters”for a discussion of thi
149、s potential impact.Compliance with laws,rules,and regulations has not otherwise had a material effect upon our capital expenditures,results of operations,or competitive positionand we do not currently anticipate material capital expenditures for environmental control facilities.Compliance with exist
150、ing or future governmental regulations,including,but not limited to,those pertaining to IP ownership and infringement,taxes,import and export requirements and tariffs,anti-corruption,businessacquisitions,foreign exchange controls and cash repatriation restrictions,data privacy requirements,competiti
151、on and antitrust,advertising,employment,productregulations,cybersecurity,environmental,health and safety requirements,the responsible use of AI,climate change,cryptocurrency,and consumer laws,couldincrease our costs,impact our competitive position,and otherwise may have a material adverse impact on
152、our business,financial condition and results ofoperations in subsequent periods.Refer to“Item 1A.Risk Factors”for a discussion of these potential impacts.Sustainability and GovernanceNVIDIA invents computing technologies that improve lives and address global challenges.Our goal is to integrate sound
153、 environmental,social,and corporategovernance principles and practices into every aspect of the Company.The Nominating and Corporate Governance Committee of our Board of Directors isresponsible for reviewing and discussing with management our practices related to sustainability and corporate governa
154、nce.We assess our programs annuallyin consideration of stakeholder expectations,market trends,and business risks and opportunities.These issues are important for our continued businesssuccess and reflect the topics of highest concern to NVIDIA and our stakeholders.The following section and the Human
155、 Capital Management Section below provide an overview of our principles and practices.More information can be found onour website and in our annual Sustainability Report.Information contained on our website or in our annual Sustainability Report is not incorporated by referenceinto this or any other
156、 report we file with the Securities and Exchange Commission,or the SEC.Refer to“Item 1A.Risk Factors”for a discussion of risks anduncertainties we face related to sustainability.Climate ChangeIn the area of environmental sustainability,we address our climate impacts across our product lifecycle and
157、assess risks,including current and emergingregulations and market impacts.In May 2023,we published metrics related to our environmental impact for fiscal year 2023.Fiscal year 2024 metrics are expected to be published in the firsthalf of fiscal year 2025.There has been no material impact to our capi
158、tal expenditures,results of operations or competitive position associated with globalenvironmental sustainability regulations,compliance,or costs from sourcing renewable energy.By the end of fiscal year 2025,our goal is to purchase10Table of Contentsor generate enough renewable energy to match 100%o
159、f our global electricity usage for our offices and data centers.In fiscal year 2023,we increased thepercentage of our total electricity use matched by renewable energy purchases to 44%.By fiscal year 2026,we aim to engage manufacturing supplierscomprising at least 67%of NVIDIAs scope 3 category 1 GH
160、G emissions with goal of effecting supplier adoption of science-based targets.Whether it is creation of technology to power next-generation laptops or designs to support high-performance supercomputers,improving energy efficiency isimportant in our research,development,and design processes.GPU-accel
161、erated computing is inherently more energy efficient than traditional computing formany workloads because it is optimized for throughput,performance per watt,and certain AI workloads.The energy efficiency of our products is evidenced byour continued strong presence on the Green500 list of the most e
162、nergy-efficient systems.We powered 24 of the top 30 most energy efficient systems,includingthe top supercomputer,on the Green500 list.We plan to build Earth-2,a digital twin of the Earth on NVIDIA AI and NVIDIA Omniverse platforms.Earth-2 will enable scientists,companies,and policy makersto do ultra
163、-high-resolution predictions of the impact of climate change and explore mitigation and adaptation strategies.Human Capital ManagementWe believe that our employees are our greatest assets,and they play a key role in creating long-term value for our stakeholders.As of the end of fiscal year2024,we ha
164、d approximately 29,600 employees in 36 countries,22,200 were engaged in research and development and 7,400 were engaged in sales,marketing,operations,and administrative positions.The Compensation Committee of our Board of Directors assists in the oversight of policies and strategiesrelating to human
165、 capital management.To be competitive and execute our business strategy successfully,we must recruit,develop,and retain talented employees,including qualified executives,scientists,engineers,and technical and non-technical staff.RecruitmentAs the demand for global technical talent continues to be co
166、mpetitive,we have grown our technical workforce and have been successful in attracting top talentto NVIDIA.We have attracted talent globally through our strong employer brand and differentiated hiring strategies for college,professional,and leadershiptalent.Our workforce is 83%technical and 49%hold
167、advanced degrees.Additionally,we have increased focus on diversity recruiting,resulting in an increase inglobal female hiring in each channel.Our own employees help to surface top talent,with over 40%of our new hires in fiscal year 2024 coming from employeereferrals.Development and RetentionTo suppo
168、rt employee development,we provide opportunities to learn on-the-job through training courses,targeted development programs,mentoring and peercoaching and ongoing feedback.We have a library of live and on-demand learning experiences that include workshops,panel discussions,and speaker forums.We crea
169、te learning paths focused on our most common development needs and constantly upgrade our offerings to ensure that our employees are exposed tothe most current content and technologies available.We offer tuition reimbursement programs to subsidize educational programs and advanced certifications.We
170、implemented a career coaching service to provide one-on-one guidance to employees,and encourage internal job mobility.We have implementedspecifically designed mentoring and development programs for women and employees from traditionally underrepresented groups to ensure widespreadreadiness for futur
171、e advancement.To evaluate employee sentiment and engagement,we use pulse surveys,a suggestion box,and an anonymous third-party platform.Pulse surveys help us gaininsight into employee experience and provides employee-generated ideas so that we can take targeted action.The suggestion box is an always
172、-on,interactivetool where employees share their thoughts about making our company a better place to work.The anonymous third-party platform is designed to protect theidentity of the reporter and provide a mechanism for reporters to follow an investigation and receive responses.We want NVIDIA to be a
173、 place where people can build their careers over their lifetime.Our employees tend to come and stay.In fiscal year 2024,our overallturnover rate was 2.7%.Compensation,Benefits,and Well-BeingOur compensation program rewards performance and is structured to encourage employees to invest in the Company
174、s future.Employees receive equity,exceptwhere unavailable due to local regulations,that is tied to the value of our stock price and vests over time to retain employees while simultaneously aligning theirinterests with those of our shareholders.We offer comprehensive benefits to support our employees
175、 and their families physical health,well-being,and financial health.Programs include 401(k)programs in the U.S.,statutory and supplemental pension programs outside the U.S.,our employee stock purchase program,flexible work hours,and time offpolicies to address mental health,stress,and time-managemen
176、t challenges.We evaluate our benefit offerings globally and aim to provide comparable supportacross the regions where we operate.We are committed to providing tailored benefits based on the needs of our Community Resource Groups and continuingour support for parents,both new birth parents and those
177、who wish to become parents.11Table of ContentsOur support is enhanced during times of crisis,such as war or economic volatility,to take care of our existing team of world-class talent and their families.Diversity,Inclusion,and BelongingWe believe that diverse teams fuel innovation,and we are committ
178、ed to creating an inclusive culture that supports all employees.When recruiting for new talent or developing our current employees,we strive to build a diverse talent pipeline that includes those underrepresented in thetechnology field,including women,Black/African American,and Hispanic/Latino candi
179、dates.To this end,we have been:Partnering with institutions and professional organizations serving historically underrepresented communities;Embedding dedicated recruiting teams to business areas to shepherd underrepresented candidates through the interview process and find internalopportunities;Sup
180、porting the development of women employees through programs aimed at building a pipeline of future leaders;Providing peer support and executive sponsors for our internal community resource groups;Providing training and education to managers and peers on fostering supportive environments and recruiti
181、ng for diversity;Track equity and parity in retention,promotions,pay,and employee engagement scores;andMeasuring year over year progress and providing leadership visibility on diversity efforts.As of the end of fiscal year 2024,our global workforce was 79%male,20%female,and 1%not declared,with 6%of
182、our workforce in the United Statescomposed of Black or African American and Hispanic or Latino employees.Flexible Working EnvironmentWe support a flexible work environment,understanding that many employees want the ability to work from home under certain conditions.This flexibilitysupports diverse h
183、iring,retention,and employee engagement,which we believe makes NVIDIA a great place to work.During fiscal year 2025,we will continue to have a flexible work environment and maintain our company wide 2-days off a quarter for employees to rest andrecharge.Information About Our Executive OfficersThe fo
184、llowing sets forth certain information regarding our executive officers,their ages,and positions as of February 16,2024:NameAgePositionJen-Hsun Huang60President and Chief Executive OfficerColette M.Kress56Executive Vice President and Chief Financial OfficerAjay K.Puri69Executive Vice President,World
185、wide Field OperationsDebora Shoquist69Executive Vice President,OperationsTimothy S.Teter57Executive Vice President and General CounselJen-Hsun Huang co-founded NVIDIA in 1993 and has served as our President,Chief Executive Officer,and a member of the Board of Directors since ourinception.From 1985 t
186、o 1993,Mr.Huang was employed at LSI Logic Corporation,a computer chip manufacturer,where he held a variety of positions includingas Director of Coreware,the business unit responsible for LSIs SOC.From 1983 to 1985,Mr.Huang was a microprocessor designer for AMD,a semiconductorcompany.Mr.Huang holds a
187、 B.S.E.E.degree from Oregon State University and an M.S.E.E.degree from Stanford University.Colette M.Kress joined NVIDIA in 2013 as Executive Vice President and Chief Financial Officer.Prior to NVIDIA,Ms.Kress most recently served as SeniorVice President and Chief Financial Officer of the Business
188、Technology and Operations Finance organization at Cisco Systems,Inc.,a networking equipmentcompany,since 2010.At Cisco,Ms.Kress was responsible for financial strategy,planning,reporting and business development for all business segments,engineering and operations.From 1997 to 2010 Ms.Kress held a va
189、riety of positions at Microsoft,a software company,including,beginning in 2006,ChiefFinancial Officer of the Server and Tools division,where Ms.Kress was responsible for financial12Table of Contentsstrategy,planning,reporting and business development for the division.Prior to joining Microsoft,Ms.Kr
190、ess spent eight years at Texas Instruments Incorporated,a semiconductor company,where she held a variety of finance positions.Ms.Kress holds a B.S.degree in Finance from University of Arizona and an M.B.A.degree from Southern Methodist University.Ajay K.Puri joined NVIDIA in 2005 as Senior Vice Pres
191、ident,Worldwide Sales and became Executive Vice President,Worldwide Field Operations in 2009.Priorto NVIDIA,he held positions in sales,marketing,and general management over a 22-year career at Sun Microsystems,Inc.,a computing systems company.Mr.Puri previously held marketing,management consulting,a
192、nd product development positions at Hewlett-Packard,an information technology company,Booz AllenHamilton Inc.,a management and technology consulting company,and Texas Instruments Incorporated.Mr.Puri holds a B.S.E.E.degree from the University ofMinnesota,an M.S.E.E.degree from the California Institu
193、te of Technology and an M.B.A.degree from Harvard Business School.Debora Shoquist joined NVIDIA in 2007 as Senior Vice President of Operations and in 2009 became Executive Vice President of Operations.Prior to NVIDIA,Ms.Shoquist served from 2004 to 2007 as Executive Vice President of Operations at J
194、DS Uniphase Corp.,a provider of communications test and measurementsolutions and optical products for the telecommunications industry.She served from 2002 to 2004 as Senior Vice President and General Manager of the Electro-Optics business at Coherent,Inc.,a manufacturer of commercial and scientific
195、laser equipment.Previously,she worked at Quantum Corp.,a data protectioncompany,as President of the Personal Computer Hard Disk Drive Division,and at Hewlett-Packard.Ms.Shoquist holds a B.S.degree in Electrical Engineeringfrom Kansas State University and a B.S.degree in Biology from Santa Clara Univ
196、ersity.Timothy S.Teter joined NVIDIA in 2017 as Senior Vice President,General Counsel and Secretary and became Executive Vice President,General Counsel andSecretary in February 2018.Prior to NVIDIA,Mr.Teter spent more than two decades at the law firm of Cooley LLP,where he focused on litigating pate
197、nt andtechnology related matters.Prior to attending law school,he worked as an engineer at Lockheed Missiles and Space Company,an aerospace company.Mr.Teter holds a B.S.degree in Mechanical Engineering from the University of California at Davis and a J.D.degree from Stanford Law School.Available Inf
198、ormationOur annual reports on Form 10-K,quarterly reports on Form 10-Q,current reports on Form 8-K and,if applicable,amendments to those reports filed or furnishedpursuant to Section 13(a)or 15(d)of the Securities Exchange Act of 1934,as amended,or the Exchange Act,are available free of charge on or
199、 through ourwebsite,http:/,as soon as reasonably practicable after we electronically file such material with,or furnish it to,the Securities and ExchangeCommission,or the SEC.The SECs website,http:/www.sec.gov,contains reports,proxy and information statements,and other information regarding issuerst
200、hat file electronically with the SEC.Our web site and the information on it or connected to it are not a part of this Annual Report on Form 10-K.Item 1A.Risk FactorsThe following risk factors should be considered in addition to the other information in this Annual Report on Form 10-K.The following r
201、isks could harm ourbusiness,financial condition,results of operations or reputation,which could cause our stock price to decline.Additional risks,trends and uncertainties notpresently known to us or that we currently believe are immaterial may also harm our business,financial condition,results of op
202、erations or reputation.Risk Factors SummaryRisks Related to Our Industry and MarketsFailure to meet the evolving needs of our industry may adversely impact our financial results.Competition could adversely impact our market share and financial results.Risks Related to Demand,Supply and Manufacturing
203、Failure to estimate customer demand accurately has led and could lead to mismatches between supply and demand.Dependency on third-party suppliers and their technology to manufacture,assemble,test,or package our products reduces our control over productquantity and quality,manufacturing yields,and pr
204、oduct delivery schedules and could harm our business.Defects in our products have caused and could cause us to incur significant expenses to remediate and could damage our business.Risks Related to Our Global Operating BusinessAdverse economic conditions may harm our business.13Table of ContentsInte
205、rnational sales and operations are a significant part of our business,which exposes us to risks that could harm our business.Product,system security and data breaches and cyber-attacks could disrupt our operations and adversely affect our financial condition,stock price andreputation.Business disrup
206、tions could harm our operations and financial results.Climate change may have a long-term impact on our business.We may not be able to realize the potential benefits of business investments or acquisitions,nor successfully integrate acquisition targets.A significant amount of our revenue stems from
207、a limited number of partners and distributors and we have a concentration of sales to end customers,and our revenue could be adversely affected if we lose or are prevented from selling to any of these end customers.We may be unable to attract,retain and motivate our executives and key employees.Modi
208、fication or interruption of our business processes and information systems may disrupt our business,and internal controls.Our operating results have in the past fluctuated and may in the future fluctuate,and if our operating results are below the expectations of securitiesanalysts or investors,our s
209、tock price could decline.Risks Related to Regulatory,Legal,Our Stock and Other MattersWe are subject to complex laws,rules and regulations,and political and other actions,which may adversely impact our business.Increased scrutiny from shareholders,regulators,and others regarding our corporate sustai
210、nability practices could result in financial,reputational,oroperational harm and liability.Issues relating to the responsible use of our technologies,including AI,may result in reputational or financial harm and liability.Adequately protecting our IP rights could be costly,and our ability to compete
211、 could be harmed if we are unsuccessful or if we are prohibited frommaking or selling our products.We are subject to stringent and changing data privacy and security laws,rules,regulations,and other obligations.These areas could damage ourreputation,deter customers,affect product design,or result in
212、 legal or regulatory proceedings and liability.Our operating results may be adversely impacted by additional tax liabilities,higher than expected tax rates,changes in tax laws,and other tax-relatedfactors.Our business is exposed to the risks associated with litigation,investigations,and regulatory p
213、roceedings.Our indebtedness could adversely affect our financial position and cash flows from operations and prevent us from implementing our strategy or fulfillingour contractual obligations.Delaware law,provisions in our governing documents and our agreement with Microsoft could delay or prevent a
214、 change in control.Risk FactorsRisks Related to Our Industry and MarketsFailure to meet the evolving needs of our industry and markets may adversely impact our financial results.Our accelerated computing platforms experience rapid changes in technology,customer requirements,competitive products,and
215、industry standards.Our success depends on our ability to:timely identify industry changes,adapt our strategies,and develop new or enhance and maintain existing products and technologies that meet theevolving needs of these markets,including due to unexpected changes in industry standards or disrupti
216、ve technological innovation that could renderour products incompatible with products developed by other companies;14Table of Contentsdevelop or acquire new products and technologies through investments in research and development;launch new offerings with new business models including software,servi
217、ces,and cloud solutions,as well as software-,infrastructure-,or platform-as-a-service solutions;expand the ecosystem for our products and technologies;meet evolving and prevailing customer and industry safety,security,reliability expectations,and compliance standards;manage product and software life
218、cycles to maintain customer and end-user satisfaction;develop,acquire,maintain,and secure access to the internal and external infrastructure needed to scale our business,including sufficient energy forpowering data centers using our products,acquisition integrations,customer support,e-commerce,IP li
219、censing capabilities and cloud service capacity;andcomplete technical,financial,operational,compliance,sales and marketing investments for the above activities.We have invested in research and development in markets where we have a limited operating history,which may not produce meaningful revenue f
220、or severalyears,if at all.If we fail to develop or monetize new products and technologies,or if they do not become widely adopted,our financial results could be adverselyaffected.Obtaining design wins may involve a lengthy process and depends on our ability to anticipate and provide features and fun
221、ctionality that customers willdemand.They also do not guarantee revenue.Failure to obtain a design win may prevent us from obtaining future design wins in subsequent generations.Wecannot ensure that the products and technologies we bring to market will provide value to our customers and partners.If
222、we fail any of these key successcriteria,our financial results may be harmed.We have begun offering enterprise customers NVIDIA DGX Cloud services directly and through our network of partners,which include cloud-basedinfrastructure,software and services for training and deploying AI models,and NVIDI
223、A AI Foundations for customizable pretrained AI models.We have partneredwith CSPs to host such software and services in their data centers,and we entered and may continue to enter into multi-year cloud service agreements tosupport these offerings and our research and development activities.The timin
224、g and availability of these cloud services has changed and may continue tochange,impacting our revenue,expenses,and development timelines.NVIDIA DGX Cloud services may not be successful and will take time,resources,andinvestment.We also offer or plan to offer standalone software solutions,including
225、NVIDIA AI Enterprise,NVIDIA Omniverse,NVIDIA DRIVE,and several othersoftware solutions.These new business models or strategies may not be successful,and we may fail to sell any meaningful standalone software or services.Wemay incur significant costs and may not achieve any significant revenue from t
226、hese offerings.Competition could adversely impact our market share and financial results.Our target markets remain competitive,and competition may intensify with expanding and changing product and service offerings,industry standards,customerneeds,new entrants and consolidations.Our competitors prod
227、ucts,services and technologies,including those mentioned above in this Annual Report on Form10-K,may be cheaper or provide better functionality or features than ours,which has resulted and may in the future result in lower-than-expected selling pricesfor our products.Some of our competitors operate
228、their own fabrication facilities,and have longer operating histories,larger customer bases,morecomprehensive IP portfolios and patent protections,more design wins,and greater financial,sales,marketing and distribution resources than we do.Thesecompetitors may be able to acquire market share and/or p
229、revent us from doing so,more effectively identify and capitalize upon opportunities in new markets andend-user trends,more quickly transition their products,and impinge on our ability to procure sufficient foundry capacity and scarce input materials during asupply-constrained environment,which could
230、 harm our business.Some of our customers have in-house expertise and internal development capabilities similarto some of ours and can use or develop their own solutions to replace those we are providing.For example,others may offer cloud-based services that competewith our AI cloud service offerings
231、,and we may not be able to establish market share sufficient to achieve the scale necessary to meet our business objectives.Ifwe are unable to successfully compete in this environment,demand for our products,services and technologies could decrease and we may not establishmeaningful revenue.Risks Re
232、lated to Demand,Supply and ManufacturingFailure to estimate customer demand accurately has led and could lead to mismatches between supply and demand.We use third parties to manufacture and assemble our products,and we have long manufacturing lead times.We are not provided guaranteed wafer,component
233、and capacity supply,and our supply deliveries and production may be non-linear within a quarter or year.If our estimates of customer demand are inaccurate,aswe have experienced in the past,there could be a significant mismatch between supply and demand.This mismatch has resulted in both product shor
234、tages andexcess inventory,has varied across our market platforms,and has significantly harmed our financial results.We build finished products and maintain inventory in advance of anticipated demand.While we have in the past entered and may in the future enter into long-term supply and capacity comm
235、itments,we may not be able to secure sufficient15Table of Contentscommitments for capacity to address our business needs,or our long-term demand expectations may change.These risks may increase as we shorten ourproduct development cycles,enter new lines of business,or integrate new suppliers or comp
236、onents into our supply chain,creating additional supply chaincomplexity.Additionally,our ability to sell certain products has been and could be impeded if components necessary for the finished products are not availablefrom third parties.This risk may increase as a result of our platform strategy.In
237、 periods of shortages impacting the semiconductor industry and/or limited supplyor capacity in our supply chain,the lead times on our orders may be extended.We have previously experienced and may continue to experience extended leadtimes of more than 12 months.We have paid premiums and provided depo
238、sits to secure future supply and capacity,which have increased our product costs andmay continue to do so.If our existing suppliers are unable to scale their capabilities to meet our supply needs,we may require additional sources of capacity,which may require additional deposits.We may not have the
239、ability to reduce our supply commitments at the same rate or at all if our revenue declines.Many additional factors have caused and/or could in the future cause us to either underestimate or overestimate our customers future demand for our products,or otherwise cause a mismatch between supply and de
240、mand for our products and impact the timing and volume of our revenue,including:changes in product development cycles and time to market;competing technologies and competitor product releases and announcements;changes in business and economic conditions resulting in decreased end demand;sudden or su
241、stained government lockdowns or actions to control case spread of global or local health issues;rapidly changing technology or customer requirements;the availability of sufficient data center capacity and energy for customers to procure;new product introductions and transitions resulting in less dem
242、and for existing products;new or unexpected end-use cases;increase in demand for competitive products,including competitive actions;business decisions made by third parties;the demand for accelerated or AI-related cloud services,including our own software and NVIDIA DGX Cloud services;changes that i
243、mpact the ecosystem for the architectures underlying our products and technologies;the demand for our products;orgovernment actions or changes in governmental policies,such as export controls or increased restrictions on gaming usage.Demand for our data center systems and products surged in fiscal y
244、ear 2024.Entering fiscal year 2025,we are gathering customer demand indications acrossseveral product transitions.We have demand visibility for our new data center products ramping later in fiscal year 2025.We have increased our supply andcapacity purchases with existing suppliers,added new vendors
245、and entered into prepaid manufacturing and capacity agreements.These increased purchasevolumes,the number of suppliers,and the integration of new vendors into our supply chain may create more complexity and execution risk.We may continue toenter into new supplier and capacity arrangements.Our purcha
246、se commitments and obligations for inventory and manufacturing capacity at the end of fiscalyear 2024 were impacted by shortening lead times for certain components.Supply of Hopper architecture products is improving,and demand remains verystrong.We expect our next-generation products to be supply-co
247、nstrained based upon demand indications.We may incur inventory provisions or impairments ifour inventory or supply or capacity commitments exceed demand for our products or demand declines.Our customer orders and longer-term demand estimates may change or may not be correct,as we have experienced in
248、 the past.Product transitions arecomplex and can impact our revenue as we often ship both new and prior architecture products simultaneously and we and our channel partners prepare to shipand support new products.Due to our product introduction cycles,we are almost always in various stages of transi
249、tioning the architecture of our Data Center,Professional Visualization,and Gaming products.We will have a broader and faster Data Center product launch cadence to meet a growing and diverse set of AIopportunities.The increased frequency of these transitions may magnify the challenges associated with
250、 managing our supply and demand due to longmanufacturing lead times.Qualification time for new products,customers anticipating product transitions and channel partners reducing channel inventory ofprior architectures ahead of new product introductions can create reductions or volatility in our reven
251、ue.We have experienced and may in the future experiencereduced demand for current generation architectures when customers anticipate16Table of Contentstransitions,and we may be unable to sell multiple product architectures at the same time for current and future architecture transitions.If we are un
252、able toexecute our architectural transitions as planned for any reason,our financial results may be negatively impacted.The increasing frequency and complexity ofnewly introduced products may result in unanticipated quality or production issues that could increase the magnitude of inventory provisio
253、ns,warranty or othercosts or result in product delays.Deployment of new products to customers creates additional challenges due to the complexity of our technologies,which hasimpacted and may in the future impact the timing of customer purchases or otherwise impact our demand.While we have managed p
254、rior product transitions andhave previously sold multiple product architectures at the same time,these transitions are difficult,may impair our ability to predict demand and impact oursupply mix,and we may incur additional costs.Many end customers often do not purchase directly from us but instead p
255、urchase indirectly through multiple OEMs,ODMs,system integrators,distributors,andother channel partners.As a result,the decisions made by our multiple OEMs,ODMs,system integrators,distributors,and other channel partners,and inresponse to changing market conditions and changes in end-user demand for
256、our products,have impacted and could in the future continue to impact our abilityto properly forecast demand,particularly as they are based on estimates provided by various downstream parties.If we underestimate our customers future demand for our products,our foundry partners may not have adequate
257、lead-time or capacity to increase productionand we may not be able to obtain sufficient inventory to fill orders on a timely basis.Even if we are able to increase supply to meet customer demand,we maynot be able to do so in a timely manner,or our contract manufacturers may experience supply constrai
258、nts.If we cannot procure sufficient supply to meet demandor otherwise fail to fulfill our customers orders on a timely basis,or at all,our customer relationships could be damaged,we could lose revenue and marketshare and our reputation could be harmed.Additionally,since some of our products are part
259、 of a complex data center buildout,supply constraints or availabilityissues with respect to any one component have had and may have a broader revenue impact.If we overestimate our customers future demand for our products,or if customers cancel or defer orders or choose to purchase from our competito
260、rs,we maynot be able to reduce our inventory or other contractual purchase commitments.In the past,we have experienced a reduction in average selling prices,includingdue to channel pricing programs that we have implemented and may continue to implement,as a result of our overestimation of future dem
261、and,and we mayneed to continue these reductions.We have had to increase prices for certain of our products as a result of our suppliers increase in prices,and we may need tocontinue to do so for other products in the future.We have also written down our inventory,incurred cancellation penalties,and
262、recorded impairments and mayhave to do so in the future.These impacts were amplified by our placement of non-cancellable and non-returnable purchasing terms well in advance of ourhistorical lead times and could be exacerbated if we need to make changes to the design of future products.The risk of th
263、ese impacts has increased and maycontinue to increase as our purchase obligations and prepaids have grown and are expected to continue to grow and become a greater portion of our totalsupply.All of these factors may negatively impact our gross margins and financial results.We build technology and in
264、troduce products for new and innovative use cases and applications,such as NVIDIA DGX Cloud services,NVIDIA AI Foundations,Omniverse platform,LLMs,and generative AI models.Our demand estimates for new use cases,applications,and services can be incorrect and create volatilityin our revenue or supply
265、levels,and we may not be able to generate significant revenue from these use cases,applications,and services.Recent technologies,such as generative AI models,have emerged,and while they have driven increased demand for Data Center,the long-term trajectory is unknown.Because ourproducts may be used i
266、n multiple use cases and applications,it is difficult for us to estimate with any reasonable degree of precision the impact of generative AImodels on our reported revenue or forecasted demand.Additionally,we started shipping our CPU product offerings,the Grace CPU and Grace HopperSuperchips,in the t
267、hird quarter of fiscal year 2024.Our ability to adequately predict our CPU demand may create volatility in our revenue or supply levels.Challenges in estimating demand could become more pronounced or volatile in the future on both a global and regional basis.Extended lead times may occur ifwe experi
268、ence other supply constraints caused by natural disasters,pandemics or other events.In addition,geopolitical tensions,such as those involving Taiwanand China,which comprise a significant portion of our revenue and where we have suppliers,contract manufacturers,and assembly partners who are critical
269、toour supply continuity,could have a material adverse impact on us.The use of our GPUs other than that for which they were designed and marketed,including new and unexpected use cases,has impacted and can in the futureimpact demand for our products,including by leading to inconsistent spikes and dro
270、ps in demand.For example,several years ago,our Gaming GPUs began tobe used for mining digital currencies,such as Ethereum.It is difficult for us to estimate with any reasonable degree of precision the past or current impact ofcryptocurrency mining,or forecast the future impact of cryptocurrency mini
271、ng,on demand for our products.Volatility in the cryptocurrency market,including newcompute technologies,price changes in cryptocurrencies,government cryptocurrency policies and regulations,new cryptocurrency standards and changes inthe method of verifying blockchain transactions,has impacted and can
272、 in the future impact cryptocurrency mining and demand for our products and can furtherimpact our ability to estimate demand for our products.Changes to cryptocurrency standards and processes including,but not limited to,the Ethereum 2.0merge in 2022,have reduced and may in the future decrease the u
273、sage of GPUs for Ethereum mining.This has created and may in the future create increasedaftermarket sales of our17Table of ContentsGPUs,which could negatively impact retail prices for our GPUs and reduce demand for our new GPUs.In general,our new products or previously sold productsmay be resold onl
274、ine or on the unauthorized“gray market,”which also makes demand forecasting difficult.Gray market products and reseller marketplacescompete with our new products and distribution channels.Additionally,we depend on developers,customers and other third parties to build,enhance,and maintain accelerated
275、 computing applications that leverage ourplatforms.We also rely on third-party content providers and publishers to make their content available on our platforms,such as GeForce NOW.Failure bydevelopers,customers,and other third parties to build,enhance,and maintain applications that leverage our pla
276、tforms,or failure by third-party content providersor publishers to make their content available on reasonable terms or at all for use by our customers or end users on our platforms,could adversely affectcustomer demand.Dependency on third-party suppliers and their technology to manufacture,assemble,
277、test,or package our products reduces our control over productquantity and quality,manufacturing yields,and product delivery schedules and could harm our business.We depend on foundries to manufacture our semiconductor wafers using their fabrication equipment and techniques.We do not assemble,test,or
278、 package ourproducts,but instead contract with independent subcontractors.These subcontractors assist with procuring components used in our systems,boards,andproducts.We face several risks which have adversely affected or could adversely affect our ability to meet customer demand and scale our suppl
279、y chain,negatively impact longer-term demand for our products and services,and adversely affect our business operations,gross margin,revenue and/or financialresults,including:lack of guaranteed supply of wafer,component and capacity or decommitment and potential higher wafer and component prices,fro
280、m incorrectlyestimating demand and failing to place orders with our suppliers with sufficient quantities or in a timely manner;failure by our foundries or contract manufacturers to procure raw materials or provide adequate levels of manufacturing or test capacity for ourproducts;failure by our found
281、ries to develop,obtain or successfully implement high quality process technologies,including transitions to smaller geometryprocess technologies such as advanced process node technologies and memory designs needed to manufacture our products;failure by our suppliers to comply with our policies and e
282、xpectations and emerging regulatory requirements;limited number and geographic concentration of global suppliers,foundries,contract manufacturers,assembly and test providers and memorymanufacturers;loss of a supplier and additional expense and/or production delays as a result of qualifying a new fou
283、ndry or subcontractor and commencing volumeproduction or testing in the event of a loss,addition or change of a supplier;lack of direct control over product quantity,quality and delivery schedules;suppliers or their suppliers failing to supply high quality products and/or making changes to their pro
284、ducts without our qualification;delays in product shipments,shortages,a decrease in product quality and/or higher expenses in the event our subcontractors or foundries prioritize ourcompetitors or other customers orders over ours;requirements to place orders that are not cancellable upon changes in
285、demand or requirements to prepay for supply in advance;low manufacturing yields resulting from a failure in our product design or a foundrys proprietary process technology;anddisruptions in manufacturing,assembly and other processes due to closures related to heat waves,earthquakes,fires,or other na
286、tural disasters andelectricity conservation efforts.Defects in our products have caused and could cause us to incur significant expenses to remediate,which can damage our reputation and cause usto lose market share.Our hardware and software product and service offerings are complex.They have in the
287、past and may in the future contain defects or security vulnerabilities orexperience failures or unsatisfactory performance due to any number of issues in design,fabrication,packaging,materials,bugs and/or use within a system.These risks may increase as our products are introduced into new devices,ma
288、rkets,technologies and applications or as new versions are released.These risksfurther increase when we rely on partners to supply and manufacture components that are used in our products,as these arrangements reduce our direct controlover production.AI software products we or our partners offer rel
289、y on18Table of Contentstraining data that may originate from third parties and new training methods,and the resulting products may contain unknown or undetected defects and errors,or reflect unintended bias.Although arrangements with component providers may contain provisions for product defect expe
290、nse reimbursement,we generallyremain responsible to the customer for warranty product defects that may occur from time to time.Some failures in our products or services have been in thepast and may in the future be only discovered after a product or service has been shipped or used.Undiscovered vuln
291、erabilities in our products or services couldresult in loss of data or intangible property,or expose our customers to unscrupulous third parties who develop and deploy malicious software programs thatcould attack our products or services.Defects or failure of our offerings to perform to specificatio
292、ns could lead to substantial damage to the products in which ourofferings have been integrated by OEMs,ODMs,AIBs and automotive manufacturers and tier 1 automotive suppliers,and to the user of such end product.Anysuch defect may cause us to incur significant warranty,support and repair or replacemen
293、t costs as part of a product recall or otherwise,write-off the value ofrelated inventory,and divert the attention of our engineering and management personnel from our product development efforts to find and correct the issue.Ourefforts to remedy these issues may not be timely or satisfactory to our
294、customers.An error or defect in new products,releases or related software drivers aftercommencement of commercial shipments could result in failure to achieve market acceptance,loss of design wins,temporary or permanent withdrawal from aproduct or market and harm to our relationships with existing a
295、nd prospective customers and partners and consumers perceptions of our brand,which would inturn negatively impact our business operations,gross margin,revenue and/or financial results.We may be required to reimburse our customers,partners orconsumers,including for costs to repair or replace products
296、 in the field or in connection with indemnification obligations,or pay fines imposed by regulatoryagencies.For example,in fiscal year 2023,a defect was identified in a third-party component embedded in certain Data Center products.This defect has had,and otherdefects may in the future have,an advers
297、e effect on our cost and supply of components and finished goods.These costs could be significant in future periods.We recorded a net warranty liability during fiscal year 2023 primarily in connection with this defect.While we believe we have accurately recorded for warrantyobligations,we may need t
298、o record additional amounts in the future if our estimate proves to be incorrect.In general,if a product liability claim regarding any ofour products is brought against us,even if the alleged damage is due to the actions or inactions of a third party,such as within our supply chain,the cost ofdefend
299、ing the claim could be significant and would divert the efforts of our technical and management personnel and harm our business.Further,our businessliability insurance may be inadequate or future coverage may be unavailable on acceptable terms,which could adversely impact our financial results.Risks
300、 Related to Our Global Operating BusinessAdverse economic conditions may harm our business.Economic and industry uncertainty or changes,including recession or slowing growth,inflation,changes or uncertainty in fiscal,monetary or trade policy,disruptions to capital markets and the banking system,curr
301、ency fluctuations,higher interest rates,tighter credit,lower capital expenditures by businesses,including on IT infrastructure,increases in unemployment,labor shortages,and lower consumer confidence and spending,global supply chain constraints andglobal economic and geopolitical developments have in
302、 the past and/or could in the future have adverse,wide-ranging effects on our business and financialresults,including:increased costs for wafers,components,logistics,and other supply chain expenses,which have negatively impacted our gross margin in the past andmay do so in the future;increased suppl
303、y,employee,facilities and infrastructure costs and volatility in the financial markets,which have reduced and may in the future reduceour margins;decrease in demand for our products,services and technologies and those of our customers,partners or licensees;the inability of our suppliers to deliver o
304、n their supply commitments to us and our customers or our licensees inability to supply products to customersand/or end users;limits on our ability to forecast operating results and make business decisions;the insolvency of key suppliers,distributors,customers,cloud service providers,data center pro
305、viders,licensing parties or other third parties we rely on;reduced profitability of customers,which may cause them to scale back operations,exit businesses,file for bankruptcy protection and potentially ceaseoperations,or lead to mergers,consolidations or strategic alliances among other companies,wh
306、ich could adversely affect our ability to competeeffectively;andincreased credit and collectability risks,higher borrowing costs or reduced availability of capital markets,reduced liquidity,adverse impacts on ourcustomers and suppliers,failures of counterparties,including financial institutions and
307、insurers,asset impairments,and declines in the value of ourfinancial instruments.19Table of ContentsAdverse developments affecting financial institutions,such as bank failures or instability,or concerns or speculation about similar events or risks,could lead tomarket-wide liquidity problems and othe
308、r disruptions,which could impact our customers ability to fulfill their payment obligations to us,our vendors ability tofulfill their contractual obligations to us,or our ability to fulfill our own obligations.Additionally,we maintain an investment portfolio of various holdings,types,and maturities.
309、These investments are subject to general credit,liquidity,market andinterest rate risks,which may be exacerbated by market downturns or events that affect global financial markets,as described above.A majority of ourinvestment portfolio comprises USG securities.A decline in global financial markets
310、for long periods or a downgrade of the USG credit rating due to an actual orthreatened default on government debt could result in higher interest rates,a decline in the value of the U.S.dollar,reduced market liquidity or other adverseconditions.These factors could cause an unrealized or realized los
311、s position in our investments or require us to record impairment charges.International sales and operations are a significant part of our business,which exposes us to risks that could harm our business.We sell our products internationally,and we also have operations and conduct business internationa
312、lly.Our semiconductor wafers are manufactured,assembled,tested and packaged by third parties located outside of the United States,and we generated 56%of our revenue in fiscal year 2024 from salesoutside of the United States.Our sales to China decreased as a percentage of total Data Center revenue fr
313、om 19%in fiscal year 2023 to 14%in fiscal year2024.Although we have not received licenses from the USG to ship restricted products to China,we have started to ship alternatives to the China market insmall volumes.China represented a mid-single digit percentage of our Data Center revenue in the fourt
314、h quarter of fiscal year 2024 due to USG licensingrequirements and we expect China to be in a similar range in the first quarter of fiscal year 2025.The global nature of our business subjects us to a number ofrisks and uncertainties,which have had in the past and could in the future have a material
315、adverse effect on our business,financial condition and results ofoperations.These include domestic and international economic and political conditions in countries in which we and our suppliers and manufacturers dobusiness,government lockdowns to control case spread of global or local health issues,
316、differing legal standards with respect to protection of IP and employmentpractices,different domestic and international business and cultural practices,disruptions to capital markets,counter-inflation policies,currency fluctuations,natural disasters,acts of war or other military actions,terrorism,pu
317、blic health issues and other catastrophic events.Product,system security,and data protection breaches,as well as cyber-attacks,could disrupt our operations,reduce our expected revenue,increase our expenses,and significantly harm our business and reputation.Security breaches,computer malware,social-e
318、ngineering attacks,denial-of-service attacks,software bugs,server malfunctions,software or hardware failures,loss of data or other information technology assets,and other cyber-attacks are becoming increasingly sophisticated,making it more difficult to successfullydetect,defend against them or imple
319、ment adequate preventative measures.Cyber-attacks,including ransomware attacks by organized criminal threat actors,nation-states,and nation-state-supported actors,may become more prevalentand severe.Our ability to recover from ransomware attacks may be limited if our backups have been affected by th
320、e attack,or if restoring from backups isdelayed or not feasible.Individuals,groups of hackers and sophisticated organizations,including nation-states and nation-state-supported actors,and other threat actors have engagedand are expected to continue to engage in cyber-attacks.Additionally,some actors
321、 are using AI technology to launch more automated,targeted and coordinatedattacks.Due to geopolitical conflicts and during times of war or other major conflicts,we and the third parties we rely upon may be vulnerable to a heightenedrisk of cyber-attacks that could materially disrupt our ability to p
322、rovide services and products.We may also face cybersecurity threats due to error or intentionalmisconduct by employees,contractors or other third-party service providers.Certain aspects of effective cybersecurity are dependent upon our employees,contractors and/or other third-party service providers
323、 safeguarding our sensitive information and adhering to our security policies and access controlmechanisms.We have in the past experienced,and may in the future experience,security incidents arising from a failure to properly handle sensitive informationor adhere to our security policies and access
324、control mechanisms and,although no such events have had a material adverse effect on our business,there canbe no assurance that an insider threat will not result in an incident that is material to us.Furthermore,we rely on products and services provided by third-partysuppliers to operate certain cri
325、tical business systems,including without limitation,cloud-based infrastructure,encryption and authentication technology,employee email and other functions,which exposes us to supply-chain attacks or other business disruptions.We cannot guarantee that third parties andinfrastructure in our supply cha
326、in or our partners supply chains have not been compromised or that they do not contain exploitable vulnerabilities,defects orbugs that could result in a breach of or disruption to our information technology systems,including our products and services,or the third-party informationtechnology systems
327、that support our services.We may also incorporate third-party data into our AI algorithms or use open-source datasets to train ouralgorithms.These datasets may be flawed,insufficient,or contain certain biased information,and may otherwise be vulnerable to security incidents.We mayhave limited insigh
328、t into the data privacy or security practices of third-party suppliers,including for our AI algorithms.Our ability to monitor these third partiesinformation security practices is limited,and they may not have adequate information security measures in place.In addition,if one of our third-party suppl
329、ierssuffers a security incident(which has happened in the20Table of Contentspast and may happen in the future),our response may be limited or more difficult because we may not have direct access to their systems,logs and otherinformation related to the security incident.Additionally,we are incorpora
330、ted into the supply chain of a large number of entities worldwide and,as a result,if ourproducts or services are compromised,a significant number of our customers and their data could be affected,which could result in potential liability and harmour business.To defend against security incidents,we m
331、ust continuously engineer more secure products and enhance security and reliability features,which is expected toresult in increased expenses.We must also continue to develop our security measures,including training programs and security awareness initiatives,designedto ensure our suppliers have app
332、ropriate security measures in place,and continue to meet the evolving security requirements of our customers,applicableindustry standards,and government regulations.While we invest in training programs and security awareness initiatives and take steps to detect and remediatecertain vulnerabilities t
333、hat we have identified,we may not always be able to prevent threats or detect and mitigate all vulnerabilities in our security controls,systems or software,including third-party software we have installed,as such threats and techniques change frequently and may not be detected until after asecurity incident has occurred.Further,we may experience delays in developing and deploying remedial measures