Nvidia's Jensen Huang Latest Article: The "Five Layers of Cake" of AI

AI Is a Five‑Layer Cake
Author: Nvidia
Translation: Peggy, BlockBeats

Original Author: Rhythm BlockBeats

Original Source:

Reprint: Mars Finance

Editor’s Note: Artificial intelligence is evolving from a cutting-edge technology into the foundational infrastructure that supports the operation of the modern economy. In its first long-form article published on its official account, Nvidia attempts to systematically analyze the industry structure of AI from first principles: from energy and chips, to data center infrastructure, to models and applications, forming a complete five-layer technology stack.

The article points out that AI is not just a competition of software or models, but a global industrial development involving energy, computing power, manufacturing, and applications. Its scale could become one of the largest infrastructure expansions in human history. Through this “five-layer cake” perspective, Nvidia aims to illustrate that the true significance of AI is not just smarter software, but an infrastructure revolution comparable in scale to electricity and the internet.

Below is the original text:

Artificial intelligence is one of the most powerful forces shaping the world today. It is not just a smart application or a single model, but an infrastructure as important as electricity and the internet.

AI operates on real hardware, real energy, and real economic systems. It transforms raw materials into scalable “intelligence.” Every company will use it, every country will build it.

To understand why AI unfolds in this way, starting from first principles and examining the fundamental changes in the computing field can be very helpful.

From “Pre-made Software” to “Real-time Generated Intelligence”

For most of computing history, software has been “pre-made.” Humans describe an algorithm first, then the computer executes instructions accordingly. Data must be carefully structured, stored in tables, and retrieved through precise queries. SQL is indispensable because it enables this entire system to function.

But AI breaks this pattern.

For the first time, we have a computer capable of understanding unstructured information. It can interpret images, read text, listen to sounds, and understand their meanings; it can infer context and intent. More importantly, it can generate intelligence in real time.

Every response is a new generation. Each answer depends on the context you provide. This is no longer software retrieving existing instructions from a database, but software reasoning in real time and generating intelligence on demand.

Because intelligence is generated in real time, the entire computing technology stack supporting it must be reinvented.

AI as Infrastructure

From an industrial perspective, AI can be broken down into a five-layer structure.

Energy

At the bottom is energy.

Real-time generated intelligence requires real-time electricity. Every token produced involves electrons moving, heat being managed, and energy being converted into computing power.

Below this layer, there is no abstraction. Energy is the first principle of AI infrastructure and the fundamental constraint on how much intelligence the system can produce.

Chips

Above energy are chips. These processors are designed to convert energy into computing power with extremely high efficiency, especially under large-scale conditions.

AI workloads demand massive parallel computing, high-bandwidth memory, and high-speed interconnects. Advances in chip technology determine the speed of AI expansion and how cheap “intelligence” ultimately becomes.

Infrastructure

Above chips is infrastructure. This includes land, power transmission, cooling systems, construction, networking, and the scheduling systems that organize tens of thousands of processors into a single machine.

These systems are essentially AI factories. They are not designed for storing information but for manufacturing intelligence.

Models

Above infrastructure are models. AI models can understand various types of information: language, biology, chemistry, physics, finance, medicine, and the real world itself.

Language models are just one category. Some of the most transformative work is happening in fields like protein AI, chemical AI, physics simulation, robotics, and autonomous systems.

Applications

At the top is the application layer, where real economic value is created. Examples include drug discovery platforms, industrial robots, legal copilots, and autonomous vehicles.

An autonomous vehicle is essentially an “AI application carried by a machine”; a humanoid robot is an “AI application carried by a body.” The underlying technology stack is the same; only the final form differs.

Thus, the five-layer structure of AI is: Energy → Chips → Infrastructure → Models → Applications. Every successful application influences all lower layers, until the power plant at the bottom supplies energy.

An Early Stage Infrastructure Buildout

We are just beginning this construction. Current investments amount to only hundreds of billions of dollars, but future needs will require trillions of dollars in infrastructure.

Globally, we are witnessing the building of: chip factories, computer assembly plants, AI factories.

Unprecedented scale is being built. This is becoming one of the largest infrastructure projects in human history.

Labor Demand in the AI Era

The workforce needed to support this buildout is enormous.

AI factories require: electricians, plumbers, pipefitters, steelworkers, network technicians, equipment installers, maintenance personnel.

These are highly skilled, well-paid jobs, and there is a severe shortage of such talent. Participating in this transformation does not necessarily require a PhD in computer science.

Meanwhile, AI is driving productivity improvements in the knowledge economy. Take radiology as an example. AI has begun assisting in medical image interpretation, yet the demand for radiologists continues to grow.

This is not contradictory.

The true role of radiologists is patient care, and image reading is just one task. As AI takes over more repetitive tasks, doctors can spend more time on judgment, communication, and treatment.

Hospital efficiency increases, allowing more patients to be served, which in turn requires more staff. Productivity creates capacity, and capacity drives growth.

What Has Changed in the Past Year?

In the past year, AI has crossed a critical threshold.

Models are now sufficiently advanced to truly perform in large-scale scenarios.

· Reasoning ability has significantly improved

· Hallucinations have been greatly reduced

· Grounding to the real world has been substantially enhanced

For the first time, AI-based applications are beginning to generate real economic value.

Clear product-market fit has emerged in areas such as drug discovery, logistics, customer service, software development, and manufacturing.

These applications are strongly driving the entire underlying technology stack.

The Role of Open-Source Models

Open-source models play a key role. The vast majority of AI models worldwide are free. Researchers, startups, enterprises, and even entire nations rely on open-source models to compete in advanced AI.

When open-source models reach cutting-edge technology, they not only change software but also activate demand across the entire stack.

DeepSeek‑R1 is a typical example. By making a powerful reasoning model widely available, it accelerates application development and increases demand for training compute, infrastructure, chips, and energy.

What Does This Mean?

Viewing AI as infrastructure clarifies everything. AI may have started with Transformers and large language models, but it is much more than that.

It is an industrial revolution that will reshape:

· How energy is produced and consumed

· How factories are built

· How work is organized

· The pattern of economic growth

AI factories are built because intelligence can now be generated in real time. Chips are redesigned because efficiency determines the speed of AI expansion. Energy is central because it limits how much intelligence the system can produce. Applications explode because models have finally crossed the “scalability” threshold.

Each layer reinforces the others.

This is why the scale of this buildout is so enormous, why it impacts so many industries, and why it will not be confined to any one country or sector.

Every company will use AI.

Every country will build AI.

We are still in the early stages.

Much infrastructure remains to be built, many workers need training, and many opportunities are yet to be realized.

But the direction is very clear.

Artificial intelligence is becoming the foundational infrastructure of the modern world.

And the choices we make today—how fast we build, how broadly we participate, and how we share responsibility—will determine what this era ultimately becomes.