Nvidia Inside. Hi everyone. It was a volatile week for Nvidia shareholders.

Going into CES, the annual tech trade show, some analysts on Wall Street raised expectations that CEO Jensen Huang would unveil new details about Nvidia’s next-generation of AI data center processors during his Monday evening keynote address. The speculation sparked a rally in Nvidia shares heading into the event. When no new details emerged Monday night, the stock fell 6% on Tuesday.

I found the rumors silly to begin with. Nvidia traditionally reveals information on its data center products during its annual GTC developer conference in March. Somehow Wall Street also seemed to forget that CES originally stood for the CONSUMER Electronics Show.

To that effect, Huang did announce Nvidia’s new line of RTX 50 Series gaming graphics cards based on the company’s Blackwell chip architecture. They looked impressive, especially the latest version of Nvidia’s DLSS, or Deep Learning Super Sampling, an AI graphics rendering technology, which runs on the new cards and boosts frame rates for gamers. The executive also announced Project Digits, which is effectively a desktop computer that includes a new GB10 Grace Blackwell Superchip with an Nvidia-designed Arm-based CPU and GPU that can deliver up to one petaflop of AI performance.

Digits, the first desktop computer made by Nvidia in its history, will be available in May, starting at $3,000. “Placing an AI supercomputer on the desks of every data scientist, AI researcher, and student empowers them to engage and shape the age of AI,” Huang said.

At first blush, given the expensive price point, the computer seems like a niche-oriented product for high-end engineers that won’t sell in volume.

Nvidia, meanwhile, isn’t ready yet to embrace the desktop moniker. “Project Digits is an AI appliance that runs Linux and is intended for developers,” a spokesperson told me.

But this is a small computing appliance that sits on a desk. It’s fair to call it a desktop computer.

Ultimately, I think Digits will turn out to be the most consequential announcement at this year’s CES. The computer uses a scaled-down version of Nvidia’s Grace AI server CPU technology. It’s packaged in a Mac Mini-sized form factor with the help of Taiwan-based MediaTek, which Huang commended for its expertise in building low-power chips. MediaTek is Qualcomm’s biggest rival for making mobile processors for smartphones.

Over time, the logical move for Nvidia would be to scale down this CPU further for consumer Windows laptops. By integrating its graphics expertise, MediaTek’s power-saving capabilities, and the efficiency of Arm-based CPU technology, Nvidia could create a processor that offers leading graphics for gaming and high performance for productivity, along with long battery life. While prior Arm-based Windows PCs have struggled with software compatibility, Nvidia’s top notch software engineering could make it work.

Huang strongly hinted it was likely to happen. “We architected a high-performance CPU with [MediaTek],” he said on Tuesday at a question-and-answer session with financial analysts at CES. “It was a great win-win.”

When pressed by an analyst if Digits was an iterative step toward moving into the PC market, “I’m going to have to wait to tell you that,” Huang said. “Obviously, we have plans.”

It makes financial sense for Nvidia. Despite the meager growth rates in recent years, desktop PCs and laptop computers are still a significant business for Intel and Advanced Micro Devices, the primary makers of x86-based processors. Analysts expect Intel to generate $30 billion in revenue from its client computing business in 2024, according to FactSet, while AMD has $6.7 billion in revenue in its client segment. Tens of billions of potential new revenue would be a tasty morsel for Nvidia, which is slated to make $129 billion in sales in the 12 months ending January 2025.

In the past two years, Nvidia conquered the AI data center market with the best designed, highest-performing chips. I wouldn’t bet against the company to do the same for the Windows computer market.

Nvidia wants it all. That’s likely to be good news for consumers and trouble for the PC status quo.