May 23 (Reuters) - For chip designer Nvidia ( NVDA ),

the generative artificial intelligence boom is a gift that keeps

on giving.

After riding a demand surge sparked by Big Tech's rush to

roll out chatbots, Nvidia ( NVDA ) now expects new AI models that are

capable of creating video and engaging in human-like voice

interactions to spur more orders for its graphics processors.

"There's a lot of information in life that has to be

grounded by video, grounded by physics. So that's the next big

thing," Nvidia ( NVDA ) CEO Jensen Huang told Reuters on Wednesday.

"You've got 3D video and you've got a whole bunch of stuff

you're learning from. So those systems are going to be quite

large."

The need for more computing power to train and run advanced

AI systems has buoyed demand for Nvidia's ( NVDA ) Grace Hopper chips

such as the H200, which was first used in OpenAI's GPT-4o - a

multimodal model capable of realistic voice conversation with

the ability to interact across text and image.

Nvidia's ( NVDA ) other customers, including Google DeepMind

and Meta Platforms ( META ), have also released AI

image or video generation platforms.

The chipmaker on Wednesday forecast quarterly revenue far

above estimates, after clocking more than five-fold growth in

sales at its data center unit in the first quarter.

Nvidia ( NVDA ) rallied 9% on Thursday, with the chipmaker's bumper

revenue forecast helping lift shares across the semiconductor

sector.

"The demand is broad based and the large language models

need to be increasingly multimodal, understanding not just video

but also text, speech, 2D and 3D images," said Derren Nathan,

the head of equity analysis at Hargreaves Lansdown.

AI models for video used in the automotive industry are also

emerging as a big driver of demand for Nvidia ( NVDA ) chips.

Tesla has expanded its cluster of processors used

in AI training to about 35,000 H100s as it chases autonomous

driving, Nvidia's ( NVDA ) finance chief Colette Kress said on a

post-earnings call on Wednesday.

Kress added that the automotive industry was expected to be

the largest enterprise vertical in Nvidia's ( NVDA ) data center business

this year.

"It (video generation) is certainly one of the strong and

already proven use cases for AI and it is extending beyond just

content production," Hargreaves Lansdown's Nathan said.

(Reporting by Arsheeya Bajwa in Bengaluru and Stephen Nellis in

San Francisco; Writing by Aditya Soni; Editing by Anil D'Silva)