Nvidia's Jensen Huang explains 'CEO math': 'The more you buy, the more you save'

Nvidia founder and CEO Jensen Huang’s net worth increased from $3 billion to $90 billion in five years.

Nvidia boss Jensen Huang calls follows a brand of math that he says is correct even if it's not accurate. "CEO Math," he calls it.

Speaking ahead of Computex, an annual technology exposition held in Taiwan, Huang said, "The more you buy, the more you save... That's called CEO math. It's not accurate, but it is correct."

He explained the concept by describing why companies should invest in both graphics processing units (GPUs) and central processing units (CPUs). While it is already common practice in the personal computing industry to the Nvidia boss explained that if combined, the two processors can work autonomously, reducing the time it takes to carry out a task from "100 units of time down to 1," he said, adding that the more you buy, the more you save.

"We add a GPU, a $500 GPU, to a $1,000 PC, and the performance increases tremendously," Business Insider quoted him as saying. "We do this in a data center. A billion-dollar data center, we add $500 million worth of GPUs, and all of a sudden, it becomes an AI factory."

Huang LAO presented a diagram showing that when companies use both the processors, their speed will increase by 100, at 1.5 times the cost.

The "CEO Math" must be working out for both Huang and Nvidia as the company is soon set to surpass Apple to become the world's second-most valuable company, as the biggest beneficiary of the surge in adoption of AI applications takes on the iPhone maker that has been the largest Wall Street firm by market value for years.

Meanwhile, Huang’s net worth increased from $3 billion to $90 billion in five years, CNBC reported.

The reliance of virtually all artificial intelligence applications such as OpenAI's ChatGPT on Nvidia's high-end chips has helped Nvidia's stock nearly triple in value over the past year to $2.68 trillion, Reuters reported.

In contrast, Apple ceded its No. 1 spot to Microsoft earlier this year as the once high-flying company grapples with weak demand for its iPhones and tough competition in China. It was last valued at $2.92 trillion.