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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________________________________________________

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 29, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 0-23985

NVIDIA CORPORATION

(Exact name of registrant as specified in its charter)

Delaware 94-3177549

(State or other jurisdiction of (I.R.S. Employer

Incorporation or Organization) Identification No.)

2788 San Tomas Expressway

Santa Clara, California 95051

(408) 486-2000

(Address, including zip code, and telephone number, including area code, of principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Common Stock, $0.001 par value per share NVDA The Nasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate 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 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 shorter period that the registrant was required to file such reports), and (2) has been subject 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 the preceding 12 months (or for such shorter 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," “accelerated filer," “smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐

Smaller reporting

company ☐

Emerging growth

company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial

accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting

under Section 404(b) of the 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 statements of the registrant included in the filing reflect the correction of

an error to previously issued 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 registrant’s

executive officers during the 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 29, 2022 was approximately $434.37 billion (based on the closing sales price of the

registrant's common stock as reported by the Nasdaq Global Select Market on July 29, 2022). This calculation excludes 98 million shares held by directors and executive officers of

the registrant. This calculation does not exclude shares held by such organizations whose ownership exceeds 5% of the registrant's outstanding common stock that have

represented to the registrant that they are registered investment advisers or investment companies registered under section 8 of the Investment Company Act of 1940.

The number of shares of common stock outstanding as of February 17, 2023 was 2.47 billion.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Proxy Statement for its 2023 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not

later than 120 days after the end 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.

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NVIDIA CORPORATION
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    Page
   
PART I
 
Item 1. Business  4
Item 1A. Risk Factors  15
Item 1B. Unresolved Staff Comments  33
Item 2. Properties  33
Item 3. Legal Proceedings  34
Item 4. Mine Safety Disclosures  34
  PART II  
 
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities  34
Item 6. [Reserved] 35
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations  36
Item 7A. Quantitative and Qualitative Disclosures About Market Risk  46
Item 8. Financial Statements and Supplementary Data  47
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure  47
Item 9A. Controls and Procedures  47
Item 9B. Other Information  48
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 48
   
PART III
 
Item 10. Directors, Executive Officers and Corporate Governance  48
Item 11. Executive Compensation  49
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 49
Item 13. Certain Relationships and Related Transactions, and Director Independence 50
Item 14. Principal Accountant Fees and Services  50
   
PART IV
 
Item 15. Exhibit and Financial Statement Schedules  51
Item 16. Form 10-K Summary  90
Signatures    91
2

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WHERE YOU CAN FIND MORE INFORMATION

Investors and others should note that we announce material financial information to our investors using our investor relations website, press

releases, SEC filings and public conference calls and webcasts. We also use the following social media channels as a means of disclosing

information about the company, our products, our planned financial and other announcements and attendance at upcoming investor and industry

conferences, and other matters and for complying with our disclosure obligations under Regulation FD:

NVIDIA Twitter Account (https://twitter.com/nvidia)

NVIDIA Corporate Blog (http://blogs.nvidia.com)

NVIDIA Facebook Page (https://www.facebook.com/nvidia)

NVIDIA LinkedIn Page (http://www.linkedin.com/company/nvidia)

NVIDIA Instagram Page (https://www.instagram.com/nvidia)

In addition, investors and others can view NVIDIA videos on YouTube (https://www.YouTube.com/nvidia).

The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these accounts

and the blog, in addition to following our press releases, SEC filings and public conference calls and webcasts. This list may be updated from

time to time. The information we post 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 NVIDIA's investor relations website.

Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements which are based on our management's beliefs and assumptions and on

information currently available to our management. In some cases, you can identify forward-looking statements by terms such as “may,” “will,”

“should,” “could,” “goal,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential” and similar expressions

intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may

cause our actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames

or achievements expressed or implied by the forward-looking statements. We discuss many of these risks, uncertainties and other factors in this

Annual Report on Form 10-K in greater detail under the heading “Risk Factors.” Given these 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 and with the understanding that our actual future

results may be materially different from what we expect. We hereby qualify our forward-looking statements by these cautionary statements.

Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual 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 statements reflect our beliefs and opinions on the relevant subject. These statements are

based upon information 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 such statements, such information may be limited or 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 these statements.

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PART I

ITEM 1. BUSINESS

Our Company

NVIDIA pioneered accelerated computing to help solve the most challenging computational problems. Since our original focus on PC graphics,

we have expanded to several other large and important computationally intensive fields. Fueled by the sustained demand for exceptional 3D

graphics and the scale of the gaming market, NVIDIA has leveraged its GPU architecture to create platforms for scientific computing, artificial

intelligence, or AI, data science, autonomous vehicles, or AV, robotics, metaverse and 3D internet 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 thousands of computing

cores, are essential to running deep learning 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 deep learning is

being adopted by thousands of enterprises to deliver services and products that would have been immensely difficult with traditional coding.

Some of the most recent applications of GPU-powered deep learning include recommendation systems, which are AI algorithms trained to

understand the preferences, previous decisions, and characteristics of people and products using data gathered about their interactions, large

language models, which can recognize, summarize, translate, predict and generate text and other content based on knowledge gained from

massive datasets, and generative AI, which uses algorithms that create new content, including audio, code, images, text, simulations, and

videos, based on the data they have been trained on.

NVIDIA has a platform strategy, bringing together hardware, systems, software, algorithms, libraries, and services to create unique value for the

markets we serve. While the computing requirements of these end markets are diverse, we address them with a unified underlying architecture

leveraging our GPUs and software stacks. The programmable nature of our architecture allows us to support several multi-billion-dollar end

markets with the same underlying technology by using a variety of software stacks developed either internally or by third-party developers and

partners. The large and growing number of developers across our platforms strengthens our ecosystem and increases the value of our platform

to our customers.

Innovation is at our core. We have invested over $37 billion in research and development since our inception, yielding inventions that are

essential to modern computing. Our invention of the GPU in 1999 defined modern computer graphics and established NVIDIA as the leader in

computer graphics. With our introduction of the CUDA programming model in 2006, we opened the parallel processing capabilities of our GPU

for general purpose computing. This approach significantly accelerates the most demanding high-performance computing, or HPC, applications

in fields such as aerospace, bio-science research, mechanical and fluid simulations, and energy exploration. Today, our GPUs and networking

accelerate many of the fastest supercomputers across the world. In addition, the massively parallel compute architecture of our GPUs and

associated software are well suited for deep learning and machine learning, powering the era of AI. While traditional CPU-based approaches no

longer deliver advances on the pace described by Moore’s Law, NVIDIA accelerated computing delivers performance improvements on a pace

ahead of Moore’s Law, giving the industry a path forward.

Gamers choose NVIDIA GPUs to enjoy immersive, increasingly cinematic virtual worlds. GPUs also help underpin the world’s fastest growing

spectator sport, eSports, which attracts hundreds of millions of viewers to watch top-quality live video gaming. In addition to serving the growing

number of gamers, the market for gaming GPUs is expanding because of the burgeoning population of live streamers, broadcasters, artists and

creators.

Researchers and developers use our GPUs to accelerate a wide range of important applications, from simulating molecular dynamics to climate

forecasting. With support for more than 2,800 applications - including 23 of the top 25 HPC applications - NVIDIA GPUs enable some of the most

promising areas of discovery, from climate prediction to materials science and from wind tunnel simulation to genomics. Including GPUs and

networking, NVIDIA powers over 70% of the supercomputers on the global TOP500 list, including 23 of the top 30 systems on the Green500 list.

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The world’s leading cloud service providers, or CSPs, and consumer internet companies use our GPUs and broader data center-scale

accelerated computing platforms to enable, accelerate or enrich the services they deliver to billions of end-users, including search,

recommendations, social networking, online shopping, live video, translation, AI assistants, navigation, and cloud computing.

A rapidly growing number of enterprises and startups across a broad range of industries use our GPUs and software to bring automation to the

products and services they build. The transportation industry is turning to our platforms for autonomous driving; the healthcare industry is

leveraging them for enhanced medical imaging and acceleration of drug discovery; and the financial services industry is using them for fraud

detection.

Professional designers use our GPUs and software to create visual effects in movies and to design buildings and products ranging from cell

phones to commercial aircraft.

Headquartered in Santa Clara, California, NVIDIA was incorporated in California in April 1993 and reincorporated in Delaware in April 1998.

Termination of the Arm Share Purchase Agreement

In February 2022, NVIDIA and SoftBank Group Corp., or SoftBank, announced the termination of the Share Purchase Agreement whereby

NVIDIA would have acquired Arm Limited, or Arm, from SoftBank. The parties agreed to terminate because of significant regulatory challenges

preventing the completion of the transaction. We recorded an acquisition termination cost of $1.35 billion in fiscal year 2023 reflecting the write-

off of the prepayment provided at signing.

Our Businesses

We report our business results in two segments.

The Compute & Networking segment includes our Data Center accelerated computing platform; networking; automotive AI Cockpit, autonomous

driving development agreements, and autonomous vehicle solutions; electric vehicle computing platforms; Jetson for robotics and other

embedded platforms; NVIDIA AI Enterprise and other software; and cryptocurrency mining processors, or CMP.

The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and

solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU, or vGPU, software for cloud-based

visual and virtual computing; automotive platforms for infotainment systems; and Omniverse Enterprise software for building and operating

metaverse and 3D internet applications.

Our Markets

We specialize in markets in which our computing platforms can provide tremendous acceleration for 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: Data Center, Gaming, Professional Visualization, and Automotive.

Data Center

The NVIDIA computing platform is focused on accelerating the most compute-intensive workloads, such as AI, data analytics, graphics and

scientific computing, across hyperscale, cloud, enterprise, public sector, and edge data centers. The platform consists of our energy efficient

GPUs, data processing units, or DPUs, interconnects and systems, our CUDA programming model, and a growing body of software libraries,

software development kits, or SDKs, application frameworks and services, which are either available as part of the platform or packaged and

sold separately.

For both AI and HPC applications, the NVIDIA accelerated computing platform greatly increases computer and data center performance and

power efficiency relative to conventional CPU-only approaches. In the field of AI, NVIDIA’s platform accelerates both deep learning and machine

learning workloads. Deep learning is a computer science approach where neural networks are trained to recognize patterns from massive

amounts of data in the form of images, sounds and text - in some instances better than humans - and in turn provide predictions in production

use cases. Machine learning is a related approach that leverages algorithms as well

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as data to learn how to make determinations or predictions. HPC, which includes scientific computing, uses numerical computational approaches

to solve large and complex problems.

We are engaged with thousands of organizations working on AI in a multitude of industries, from automating tasks such as consumer product

and service recommendations, to chatbots for the automation of or assistance with live customer interactions, to enabling fraud detection in

financial services, to optimizing oil exploration and drilling. These organizations include the world’s leading consumer internet and cloud services

companies, enterprises and startups seeking to implement AI in transformative ways across multiple industries. We partner with industry leaders

to help transform their applications or their computing platforms. We also have partnerships in transportation, retail, healthcare, and

manufacturing, among others, to accelerate the adoption of AI.

At the foundation of the NVIDIA accelerated computing platform are our GPUs, which excel at parallel workloads such as the training and

inferencing of neural networks. They are available in industry standard servers from every major computer maker and CSP, as well as in our

DGX AI supercomputer, a purpose-built system for deep learning and GPU accelerated applications. To facilitate customer adoption, we have

also built other ready-to-use system reference designs around our GPUs, including HGX for hyperscale and supercomputing data centers, EGX

for enterprise and edge computing, IGX for high-precision edge AI, and AGX for autonomous machines.

In fiscal year 2023, we introduced the Hopper architecture of data center GPUs, and started shipping the first Hopper-based GPU – the flagship

H100. Hopper includes a Transformer Engine, designed to accelerate the training of AI transformer models by an order of magnitude over the

prior generation. H100 is ideal for accelerating applications such as large language models, deep recommender systems, genomics and

complex digital twins.

NVIDIA will offer enterprise customers NVIDIA AI cloud services directly and through our network of partners. Examples of these services include

NVIDIA DGX Cloud, which is cloud-based infrastructure and software for training AI models, and customizable pretrained AI models. NVIDIA has

partnered with leading cloud service providers to host these services in their data centers.

Our networking solutions include InfiniBand and Ethernet network adapters and switches, related software, and cables. This has enabled us to

architect end-to-end data center-scale computing platforms that can interconnect thousands of compute nodes with high-performance

networking. While historically the server was the unit of computing, as AI and HPC workloads have become extremely large spanning thousands

of compute nodes, the data center has become the new unit of computing, with networking as an integral part.

Beyond GPUs, NVIDIA has expanded its data center processor portfolio to include DPUs, currently shipping in the market, and CPUs with

samples planned to ship in the first half of fiscal year 2024. The NVIDIA Bluefield DPU is supported by foundational data-center-infrastructure-

on-a-chip software, or DOCA, that lets developers build software-defined, hardware-accelerated networking, security, storage and management

applications for BlueField DPUs. Partners supporting Bluefield include many of the top security, storage and networking companies. We can

optimize across the entire computing, networking and storage stack to deliver data center-scale computing solutions. The Grace CPU is

designed for AI infrastructure and high-performance computing, providing the highest performance and twice the memory bandwidth and energy-

efficiency compared to today’s leading server chips.

While our approach starts with powerful chips, what makes it a full-stack computing platform is our large body of software, including the CUDA

parallel programming model, the CUDA-X collection of application acceleration libraries, Application Programming Interfaces, or APIs, SDKs and

tools, and domain-specific application frameworks. We also offer the NVIDIA GPU Cloud registry, or NGC, a comprehensive catalog of easy-to-

use, optimized software stacks across a range of domains including scientific computing, deep learning, and machine learning. With NGC, AI

developers, researchers and data scientists can get started with the development of AI and HPC applications and deploy them on DGX systems,

NVIDIA-Certified systems from our partners, or with NVIDIA’s cloud partners.

In addition to software that is delivered to customers as an integral part of our data center computing platform, we offer paid licenses to NVIDIA

AI Enterprise, a comprehensive suite of enterprise-grade AI software; and NVIDIA vGPU software for graphics-rich virtual desktops and

workstations.

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Gaming

Gaming is the largest entertainment industry, with PC gaming as the predominant platform. Many factors propel computer gaming’s growth,

including new high production value games and franchises, the continued rise of competitive gaming or eSports, social connectivity and the

increasing popularity of game streamers, modders, or gamers who create game modifications, and creators.

Our gaming platforms leverage our GPUs and sophisticated software to enhance the gaming experience with smoother, higher quality graphics.

We developed NVIDIA RTX to bring next generation graphics and AI to games. NVIDIA RTX features ray tracing technology for real-time,

cinematic-quality rendering. Ray tracing, which has long been used for special effects in the movie industry, is a computationally intensive

technique that simulates the physical behavior of light to achieve greater realism in computer-generated scenes. NVIDIA RTX also features deep

learning super sampling, or NVIDIA DLSS, our AI technology that boosts frame rates while generating beautiful, sharp images for games.

Our products for the gaming market include GeForce RTX and GeForce GTX GPUs for gaming desktop and laptop PCs, GeForce NOW cloud

gaming for playing PC games on underpowered devices, SHIELD for high quality streaming on TV, as well as system-on-chips (SOCs) and

development services for game consoles.

In fiscal year 2023, we introduced the GeForce RTX 40 Series of gaming GPUs, based on the Ada Lovelace architecture. The 40 Series features

our third generation RTX technology, third generation NVIDIA DLSS, and fourth generation Tensor Cores to deliver up to 4X the performance of

the previous generation.

Professional Visualization

We serve the Professional Visualization market by working closely with independent software vendors, or ISVs, to optimize their offerings for

NVIDIA GPUs. Our GPU computing platform enhances productivity and introduces new capabilities for critical workflows in many fields, such as

design and manufacturing and digital content creation. Design and manufacturing encompass computer-aided design, architectural design,

consumer-products manufacturing, medical instrumentation, 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 physically accurate shadows,

reflections and refractions 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.

Digital images used in product design need to mirror reality. This requires simulating the physical behavior of light and materials, or physically-

based rendering. NVIDIA Omniverse is a virtual world simulation and collaboration platform for 3D workflows, such as building and operating

metaverse and 3D internet applications, available as a software subscription for enterprise use and free for individual use. Omniverse, virtual

reality, or VR, and augmented reality, or AR, are being incorporated in a growing number of enterprise applications. Virtual car showrooms,

surgical training, architectural walkthroughs, and bringing historical scenes to life all deploy these technologies, powered by our GPUs.

Automotive

NVIDIA’s Automotive market is comprised of AV, AI cockpit, electric vehicle computing platforms, and infotainment platform solutions. Leveraging

our technology leadership in AI and building on our long-standing automotive relationships, we are delivering a complete end-to-end solution for

the AV market under the DRIVE Hyperion brand. NVIDIA has demonstrated multiple 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, assisting the human driver while creating a safer driving experience.

NVIDIA is working with several hundred partners in the automotive ecosystem including automakers, 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 computing architecture starts with training deep neural networks using our GPUs, and then running a full perception,

fusion, planning and control stack within the vehicle on the NVIDIA DRIVE Hyperion platform. The DRIVE Hyperion platform consists of the high-

performance, energy efficient DRIVE AGX computing hardware, a reference sensor set that supports full self-driving capability as well as an

open, modular DRIVE Software

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platform. The DRIVE Software platform includes DRIVE Chauffeur for autonomous driving, mapping and parking services, Drive Concierge for

intelligent in-vehicle experiences, and real time conversational AI capability based on NVIDIA Omniverse Avatar software.

In addition, we offer a scalable data center-based simulation solution, NVIDIA DRIVE Sim, based on NVIDIA Omniverse software, for digital

cockpit development, as well as for testing and validating a self-driving platform. NVIDIA's unique end-to-end, software-defined approach is

designed for continuous innovation and continuous development, enabling cars to receive over-the-air updates to add new features and

capabilities throughout the life of a vehicle.

Business Strategies

NVIDIA’s key strategies that shape our overall business approach include:

Advancing the NVIDIA accelerated computing platform. NVIDIA’s accelerated computing platform can solve complex problems in

significantly less time and with lower power consumption than alternative computational approaches. Indeed, it can help solve problems that

were previously deemed unsolvable. We work to deliver continued performance leaps that outpace Moore’s Law by leveraging innovation across

the architecture, chip design, system, interconnect, and software layers. This full-stack innovation approach allows us to deliver order-of-

magnitude 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, we address them with a unified underlying

architecture leveraging our GPUs, CUDA and networking technologies as the fundamental building blocks. The programmable nature of our

architecture allows us to make leveraged investments in research and development: we can support several multi-billion-dollar end markets with

shared underlying technology by using a variety of software stacks developed either internally or by third-party developers and partners. We

utilize this 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 deep

learning and machine learning, addressing both training and inferencing. This includes GPUs, interconnects, systems, our CUDA programming

language, algorithms, libraries, and other software. GPUs are uniquely suited to AI, and we will continue to add AI-specific features to our GPU

architecture to further extend our leadership position. Our AI technology leadership is reinforced by our large and expanding ecosystem in a

virtuous cycle. Our GPU platforms are available from virtually every major server maker and CSP, as well as on our own AI supercomputer.

There are 3.8 million developers worldwide using CUDA and our other software tools to help deploy our technology in our target markets. We

evangelize AI through partnerships with hundreds of universities and over 13,000 startups through our Inception program. Additionally, our Deep

Learning Institute provides instruction on the latest techniques on how to design, train, and deploy neural networks in applications using our

accelerated computing platform.

Extending our technology and platform leadership in computer graphics. We believe that computer graphics is fundamental to the

continued expansion and evolution of computing. We apply our research and development resources to enhance the user experience for

consumer entertainment and professional visualization applications, and create new virtual world and simulation capabilities. Our technologies

are instrumental in driving gaming forward, as developers leverage our libraries and algorithms to deliver an optimized gaming experience on our

GeForce platform. Our computer graphics platforms leverage not only our industry-leading GeForce and NVIDIA RTX GPUs, but also optimized

software stacks. For example, GeForce Experience enhances each gamer’s experience by optimizing their PC’s settings, as well as enabling the

recording and sharing of gameplay. Our Studio drivers enhance and accelerate a number of popular creative applications. Omniverse is real-

time 3D design collaboration and virtual world simulation software that empowers artists, designers and creators to connect and collaborate in

leading design applications. We also enable interactive graphics applications - such as games, movie and photo editing and design software - to

be accessed by almost any device, almost anywhere, 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 AV will soon revolutionize the transportation industry. In our

view, AI is the key technology enabler of this opportunity, as the algorithms required for autonomous driving - such as perception, localization,

and planning - are too complex for legacy hand-coded approaches and will use multiple trained neural networks instead. Therefore, we provide a

full functionally safe AI-based hardware and software solution for the AV market under the DRIVE brand, which we are bringing to market

through our partnerships with automotive original equipment manufacturers, or

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OEMs, tier-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 to any over-the-air software updates. We believe our comprehensive, top-to-

bottom and end-to-end approach will enable 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 that can be accessed by our customers and partners through

license and development agreements when they desire to build such capabilities directly into their own products, or have us do so through a

custom development. Such license and development arrangements can further enhance the reach of our technology.

Sales and Marketing

Our worldwide sales and marketing strategy is key to achieving our objective of providing markets with our high-performance and efficient

computing platforms and software. Our sales and marketing teams, located across our global markets, work closely with end customers and

various industry ecosystems through our partner network. Our partner network incorporates each industry's respective OEMs, original device

manufacturers, or ODMs, system builders, add-in board manufacturers, or AIBs, retailers/distributors, ISVs, internet and CSPs, automotive

manufacturers and tier-1 automotive suppliers, mapping companies, start-ups, and other ecosystem participants.

Members of our sales team have technical expertise and product and industry knowledge. We also employ a team of application engineers and

solution architects to assist our partner network in designing, testing, and qualifying system designs that incorporate our platforms. We believe

that the depth and quality of our design support are key to improving our partner network’s time-to-market, maintaining a high level of customer

satisfaction, 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 establish and maintain strong relationships

in the software development community. Engineering and marketing personnel engage with key software developers to promote and discuss our

platforms, as well as to ascertain individual product requirements and solve technical problems. Our developer program makes our products

available to developers prior to launch in order to encourage the development of AI frameworks, SDKs, and APIs for software applications and

game titles that are optimized for our platforms. Our Deep Learning Institute provides in-person and online training for developers in industries

and organizations around the world to build AI and accelerated computing applications that leverage our platforms.

As NVIDIA’s business has evolved from a focus primarily on gaming products to broader markets, and from chips to platforms, systems and

software, so, too, have our avenues to market. Thus, in addition to sales to customers in our partner network, certain of our products are also

sold direct to CSPs, enterprise customers, retail channels and consumers.

Seasonality

Our computing platforms serve a diverse set of markets such as consumer gaming, enterprise and cloud data centers, professional workstations,

and automotive. Our consumer products typically see stronger revenue in the second half of our fiscal year. In addition, based on the production

schedules of key customers, some of our products for notebooks and game consoles typically generate stronger revenue in the second and third

quarters, and weaker revenue in the fourth and first quarters. In fiscal year 2023, our supply exceeded our demand in several areas, and our

revenue did not follow historical seasonal patterns. Historical seasonality trends may not repeat.

Manufacturing

We do not manufacture semiconductors used for our products. Instead, we utilize a fabless manufacturing strategy, whereby we employ key

suppliers for all phases of the manufacturing process, including wafer fabrication, assembly, testing, and packaging. This strategy uses the

expertise of industry-leading suppliers that are certified by the International Organization for Standardization in such areas as fabrication,

assembly, quality control and assurance, reliability, and testing. Additionally, we can avoid many of the significant costs and risks associated with

owning and operating manufacturing operations. While we may directly procure certain raw materials used in the production of our products,

such as memory, substrates and a variety of components, our suppliers are responsible for procurement of most of the raw materials used in the

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production of our products. As a result, we can focus our resources on product design, additional quality assurance, marketing, and customer

support. We have placed non-cancellable inventory orders for certain product components in advance of our historical lead times, paid premiums

and provided deposits to secure future supply and capacity and may need to continue to do so in the future.

We have expanded our supplier relationships to build redundancy and resilience in our operations. We utilize suppliers, such as Taiwan

Semiconductor Manufacturing Company Limited and Samsung Electronics Co. Ltd, to produce our semiconductor wafers. We then utilize

independent subcontractors and contract manufacturers, such as Amkor Technology, BYD Auto Co. Ltd., or BYD Auto, Hon Hai Precision

Industry Co., or Hon Hai, King Yuan Electronics Co., Ltd., Omni Logistics, LLC, Siliconware Precision Industries Company Ltd., and Wistron

Corporation to perform assembly, testing, and packaging of most of our products and platforms. We use contract manufacturers such as Flex

Ltd., Jabil Inc., and Universal Scientific Industrial Co., Ltd., to manufacture our standard and custom adapter card products and switch systems,

and Fabrinet to manufacture our networking cables. We purchase substrates from Ibiden Co. Ltd., Kinsus Interconnect Technology Corporation,

and Unimicron Technology Corporation, and memory from Micron Technology, Samsung Semiconductor, Inc., or Samsung, and SK Hynix. We

often consign key components or materials such as the GPU, SoC, memory, and integrated circuit to the contract manufacturers.

We typically receive semiconductor products from our subcontractors, perform incoming quality assurance and configuration using test

equipment purchased from industry-leading suppliers such as Advantest America Inc. and Chroma ATE Inc., and then ship the semiconductors

to contract manufacturers, such as BYD Auto and Hon Hai, distributors, motherboard and add-in card, or AIC, customers from our third-party

warehouses in Hong Kong, Israel, and the United States. Generally, these manufacturers assemble and test the boards based on our design kit

and test specifications, and then ship our products to retailers, system builders, or OEMs as motherboard and AIC solutions.

Competition

The market for our products is intensely competitive and is characterized by rapid technological change and evolving industry standards. We

believe that the principal competitive factors in this market are performance, breadth of product offerings, access to customers and partners and

distribution channels, software support, conformity to industry standard APIs, manufacturing capabilities, processor pricing, and total system

costs. We believe that our ability to remain competitive 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 to deliver consistent volumes of our products at acceptable levels of quality and at

competitive prices. We expect competition to increase from both existing competitors and new market entrants with products that may be lower

priced than ours or may provide better performance or additional features not provided by our products. In addition, it is possible that new

competitors or alliances among competitors could emerge and acquire significant market share.

A significant source of competition comes from companies that provide or intend to provide GPUs, CPUs, DPUs, embedded SoCs, and other

accelerated, AI computing processor products, and providers of semiconductor-based high-performance interconnect products based on

InfiniBand, Ethernet, Fibre Channel and proprietary technologies. Some of our competitors may have greater marketing, financial, distribution

and manufacturing resources than we do and may be more able to adapt to customer or technological changes. We expect an increasingly

competitive environment in the future.

Our current competitors include:

• suppliers and licensors of hardware and software for discrete and integrated GPUs, custom chips and other accelerated computing

solutions, including solutions offered for AI, such as Advanced Micro Devices, Inc., or AMD, and Intel Corporation, or Intel;

• large cloud services companies with internal teams designing chips and software that incorporate accelerated or AI computing

functionality as part of their internal solutions or platforms, such as Alibaba Group, Alphabet Inc., Amazon, Inc., and Baidu, Inc.;

• suppliers of Arm-based CPUs and companies that incorporate CPUs as part of their internal solutions or platforms;

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• suppliers of SoC products that are used in servers or embedded into automobiles, autonomous machines, and gaming devices, 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 internal use, such as Tesla, Inc.; and

• suppliers of interconnect, switch cable solutions, and DPUs such as AMD, Applied Optoelectronics, Inc., Arista Networks, Broadcom,

Cisco Systems, Inc., or Cisco, Hewlett Packard Enterprise Company, Intel, Juniper Networks, Inc., Lumentum Holdings, and Marvell

Technology Group, as well as internal teams of system vendors and large cloud services companies.

Patents and Proprietary Rights

We rely primarily on a combination of patents, trademarks, trade secrets, employee and third-party nondisclosure agreements, and licensing

arrangements to protect our IP in the United States and internationally. Our currently issued patents have expiration dates from March 2023 to

June 2045. We have numerous patents issued, allowed, and pending in the United States and in foreign jurisdictions. Our patents and pending

patent applications primarily relate to our products and the technology used in connection with our products. We also rely on international

treaties, 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 products or IP rights to the same extent as the laws of the United

States. This decreased protection makes the possibility of piracy of our technology and products more likely. We continuously assess whether

and where to seek formal protection for particular innovations and technologies based on such factors as:

• the location in which our products are manufactured;

• our strategic technology or product directions in different countries;

• the degree to which IP laws exist and are meaningfully enforced in different jurisdictions; and

• the commercial significance of our operations and our competitors' operations in particular countries and regions.

We have licensed technology from third parties and expect to continue to enter into such license agreements.

Government Regulations

Our 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 announced new license requirements that impact certain exports to China

(including Hong Kong and Macau) and Russia of some of our data center products. The impact of the new license requirements is difficult to

quantify, and it may be challenging for us to manage our operations and forecast our operating results due to these requirements. Refer to “Item

1A. Risk Factors- Risks Related to Regulatory, Legal, Our Stock and Other Matters” for a discussion of this potential impact.

Additionally, our acquisitions may be subject to government regulatory reviews, and the cost to comply with such regulations or costs incurred

where regulatory challenges prevent the completion of an acquisition could have a material impact on our business. In February 2022, we

announced the termination of the Share Purchase Agreement by which we would have acquired Arm due to significant regulatory challenges

preventing the completion of the transaction. We recorded an acquisition termination cost of $1.35 billion in fiscal year 2023 reflecting the write-

off of the prepayment provided at signing.

Compliance with laws, rules, and regulations has not otherwise had a material effect upon our capital expenditures, results of operations, or

competitive position and we do not currently anticipate material capital expenditures for environmental control facilities. Compliance with existing

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, business acquisitions, foreign exchange controls and cash repatriation restrictions, data privacy

requirements, competition and antitrust, advertising, employment, product regulations, cybersecurity, environmental, health and safety

requirements, the responsible use of AI,

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climate change, cryptocurrency, and consumer laws, could increase our costs, impact our competitive position, and otherwise may have a

material adverse impact on our business, financial condition and results of operations in subsequent periods. Refer to “Item 1A. Risk Factors” for

a discussion of these potential impacts.

Environmental, Social and Corporate Governance

NVIDIA invents computing technologies that improve lives and address global challenges. Our goal is to integrate sound environmental, social

and corporate governance, or ESG, principles and practices into every aspect of the Company. The Nominating and Corporate Governance

Committee of our Board of Directors is responsible for reviewing and discussing with management our practices related to ESG. We assess our

programs annually in consideration of stakeholder expectations, market trends, and business risks and opportunities. These issues are important

for our continued business success and reflect the topics of highest concern to NVIDIA and our stakeholders.

The following section and the Human Capital Management Section below provide an overview of our principles and practices. More information

can be found on the Corporate Responsibility section of our website and in our annual Corporate Responsibility Report, or CR Report.

Information contained on our website or in our annual CR Report is not incorporated by reference into this or any other report we file with the

Securities and Exchange Commission, or the SEC. Refer to “Item 1A. Risk Factors” for a discussion of risks and uncertainties we face related to

ESG.

Climate Change

In the area of sustainability, we address our climate impacts across our product lifecycle and assess risks, including current and emerging

regulations and market impacts.

In our CR Report published in July 2022, we published metrics related to our environmental impact for fiscal year 2022. Fiscal year 2023 metrics

are expected to be published in the first half of fiscal year 2024. There has been no material impact to our capital expenditures, results of

operations or competitive position associated with global sustainability regulations, compliance, or costs from sourcing renewable energy. By the

end of fiscal year 2025, our goal is to purchase or generate enough renewable energy to match 100% of our global electricity usage for our

offices and data centers.

Whether it is creation of technology to power next-generation laptops or designs to support high-performance supercomputers, improving energy

efficiency is important in our research, development, and design processes. GPUs are inherently more energy efficient than other forms of

computing because they are optimized for throughput, performance per watt, and certain AI workloads. The energy efficiency of our products is

evidenced by our continued strong presence on the Green500 list of the most energy-efficient systems. We powered 23 of the top 30 most

energy efficient systems, including the top supercomputer, on the November 2022 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 makers to do ultra-high-resolution predictions of the impact of climate change and explore mitigation and adaptation strategies.

Human Capital Management

We 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 year 2023, we had 26,196 employees in 35 countries, 19,532 were engaged in research and development and 6,664 were engaged in

sales, marketing, operations, and administrative positions.

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.

Recruitment

As the demand for global technical talent continues to be competitive, we have grown our technical workforce and have been successful in

attracting top talent to NVIDIA. We have attracted strong talent globally with our differentiated hiring strategies for university, professional,

executive and diverse recruits. The COVID-19 pandemic created expanded hiring opportunities in new geographies and provided increased

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flexibility for employees to work from locations of their choice. Our workforce is about 80% technical and about 50% hold advanced degrees.

Earlier in fiscal year 2023, we slowed our hiring to focus on our current employees and manage costs. We maintain a connection for global talent

from universities through on-campus collaborations with professors and student organizations, as well as engagement with technical

organizations and participation at industry conferences. Our own employees help to surface top talent, with over 37% of our new hires in fiscal

year 2023 coming from employee referrals.

Development and Retention

To support employee development, we provide opportunities to learn on-the-job through training programs, one on one coaching and ongoing

feedback. We have a library of live and on-demand learning experiences that include workshops, panel discussions, and speaker forums. We

curate learning paths focused on our most common development needs and constantly upgrade our offerings to ensure that our employees are

exposed to the most current programs and technologies available. We offer tuition reimbursement programs to subsidize educational programs

and advanced certifications. We encourage internal mobility through career coaching that advises employees on developmental activities and

internal transfer opportunities. We have implemented specifically designed mentoring and development programs for women and employees

from traditionally underrepresented groups to ensure widespread readiness for future advancement.

To evaluate employee sentiment and engagement, we use pulse surveys, a suggestion box, and an anonymous third-party platform. Pulse

surveys help us gain insight into employee experience and provide ideas so that we can prioritize areas to take action. The suggestion box is an

always-on, interactive tool where employees share their thoughts about making our company a better place to work. The anonymous third-party

platform is designed to protect the identity of the reporter and provide a mechanism for reporters to follow an investigation and receive

responses.

We want NVIDIA to be a place where people can build their careers over their lifetime. Our employees tend to come and stay. In fiscal year

2023, our overall turnover rate was 5.3%.

Compensation, Benefits, and Well-Being

Our compensation program rewards performance and is structured to encourage employees to invest in the Company’s future. Employees

receive equity, except where 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 their interests with those of our shareholders.

We offer comprehensive benefits to support our employees’ and their families’ physical health, well-being and financial health, including 401(k)

programs in the U.S., statutory pension programs outside the U.S., our employee stock purchase program, flexible work hours and time off, and

programs to address mental health, stress, and time-management challenges. We evaluate our benefit offerings globally and aim to provide

comparable support across the regions where we operate. We are committed to providing tailored benefits based on community needs, including

assistance for military members, additional mental health benefits, and support for new birth parents, and those who wish to become parents.

Diversity and Inclusion

We believe that diverse teams fuel innovation, and we are committed to creating an inclusive culture that supports all employees.

When recruiting for new talent or managing current talent, we focus on recruiting, developing, and retaining a more diverse workforce with a

focus on those historically underrepresented in the technology field, including women, Black/African American, and Hispanic/Latino candidates.

To this end, we have been:

• Partnering with institutions and professional organizations serving historically underrepresented communities;

• Assigning dedicated recruiting teams to shepherd underrepresented candidates through the interview process;

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• Embedding inclusion recruiting partners throughout the business to help align candidates with internal opportunities;

• Supporting the development of women employees through programs aimed at building a pipeline of future leaders;

• Providing peer support and executive sponsors for nine internal community resource groups;

• Providing training and education to managers and peers on fostering supportive environments and recruiting for diversity;

• Ensuring we have and review a diverse pool of candidates for requisitions; and

• Measuring year over year progress and providing leadership visibility on diversity efforts.

As of the end of fiscal year 2023, our global workforce was 80% male, 19% female, and 1% not declared, with 6% of our workforce in the United

States composed of Black or African American and Hispanic or Latino employees.

Health and COVID-19

We supported our people and their families in making their health and safety a top priority during fiscal year 2023 and throughout the COVID-19

pandemic to keep our workforce safe.

Hybrid Working Environment

We support a hybrid work environment, understanding that many employees want the flexibility to work in the office or from home, and make that

decision based on the conditions around them at any point in time.

Steps we took to support employees working from home include:

• Home-focused health and well-being programs;

• Learning and development resources on how to work, lead and manage remotely; and

• Opportunities for employees to socially connect with one another virtually.

During fiscal year 2024, we will continue a flexible work environment and have instituted Company-wide “rest days” for employees to recharge.

Information About Our Executive Officers

The following sets forth certain information regarding our executive officers, their ages and positions as of February 17, 2023:

Name Age Position

Jen-Hsun Huang 60 President and Chief Executive Officer

Colette M. Kress 55 Executive Vice President and Chief Financial Officer

Ajay K. Puri 68 Executive Vice President, Worldwide Field Operations

Debora Shoquist 68 Executive Vice President, Operations

Timothy S. Teter 56 Executive Vice President and General Counsel

Jen-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 our inception. From 1985 to 1993, Mr. Huang was employed at LSI Logic Corporation, a computer chip manufacturer, where he held a

variety of positions including as Director of Coreware, the business unit responsible for LSI's SOC. From 1983 to 1985, Mr. Huang was a

microprocessor designer for AMD, a semiconductor company. Mr. Huang holds a 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 Senior Vice President and Chief Financial Officer of the Business Technology and Operations Finance organization at Cisco Systems,

Inc., a networking equipment company, since 2010. At Cisco, Ms. Kress was responsible for financial strategy, planning, reporting and business

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development for all business segments, engineering and operations. From 1997 to 2010 Ms. Kress held a variety of positions at Microsoft

Corporation, or Microsoft, a software company, including, beginning in 2006, Chief Financial Officer of the Server and Tools division, where Ms.

Kress was responsible for financial strategy, planning, reporting and business development for the division. Prior to joining Microsoft, Ms. Kress

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 President, Worldwide Sales and became Executive Vice President, Worldwide Field

Operations in 2009. Prior to 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, and product development

positions at Hewlett-Packard Company, an information technology company, Booz Allen Hamilton Inc., a management and technology consulting

company, and Texas Instruments Incorporated. Mr. Puri holds a B.S.E.E. degree from the University of Minnesota, an M.S.E.E. degree from the

California Institute 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 JDS Uniphase Corp., a provider of

communications test and measurement solutions 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 laser

equipment. Previously, she worked at Quantum Corp., a data protection company, as President of the Personal Computer Hard Disk Drive

Division, and at Hewlett-Packard Corp. Ms. Shoquist holds a B.S. degree in Electrical Engineering from Kansas State University and a B.S.

degree in Biology from Santa Clara University.

Timothy S. Teter joined NVIDIA in 2017 as Senior Vice President, General Counsel and Secretary and became Executive Vice President,

General Counsel and Secretary 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 patent and technology 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 Information

Our 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 furnished pursuant 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 through our website, http://www.nvidia.com, as soon as reasonably practicable after we electronically file such material with, or

furnish it to, the Securities and Exchange Commission, or the SEC. The SEC’s website, http://www.sec.gov, contains reports, proxy and

information statements, and other information regarding issuers that 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 FACTORS

In evaluating NVIDIA, the following risk factors should be considered in addition to the other information in this Annual Report on Form 10-K.

Purchasing or owning NVIDIA common stock involves investment risks including, but not limited to, the risks described below. Any one of the

following risks could harm our business, financial condition, results of operations or reputation, which could cause our stock price to decline, and

you may lose all or a part of your investment. Additional risks, trends and uncertainties not presently known to us or that we currently believe are

immaterial may also harm our business, financial condition, results of operations or reputation.

Risk Factors Summary

Risks Related to Our Industry and Markets

• Failure to meet the evolving needs of our industry and markets may adversely impact our financial results.

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• Competition in our current and target markets could cause us to lose market share and revenue.

Risks Related to Demand, Supply and Manufacturing

• Failure to estimate customer demand properly has led and could lead to mismatches between supply and demand.

• Dependency on third-party suppliers and their technology reduces our control over product quantity and quality, manufacturing yields,

development, enhancement, and product delivery schedules and could harm our business.

• Defects in our products have caused and could cause us to incur significant expenses to remediate and can damage our business.

Risks Related to Our Global Operating Business

• Adverse economic conditions may harm our business.

• International operations are a significant part of our business, and economic, political, business, and other changes in the regions in

which we operate may expose 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 and reputation.

• Business disruptions 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 a limited number of customers and could be adversely affected if we lose or are

prevented from selling to any of these customers.

• We may be unable to attract, retain and motivate our executives and key employees.

• Modification or interruption of our business processes and information systems may disrupt our business, processes and internal

controls.

• The COVID-19 pandemic has affected and could continue to have a material adverse impact on our financial condition and results of

operations.

• Our operating results have in the past fluctuated and may in the future fluctuate, and if our operating results are below the expectations

of securities analysts or investors, our stock price could decline.

Risks Related to Regulatory, Legal, Our Stock and Other Matters

• We 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 environmental, social and governance responsibilities could

result in financial, reputational and operational harm.

• Issues relating to the responsible use of our technologies, including AI, may result in reputational and financial harm and liability.

• Adequately protecting our IP rights could be costly, and our ability to compete could be harmed if we are unsuccessful or if we are

prohibited from making or selling our products.

• We are subject to stringent and changing data privacy and security laws, rules, regulations, and other obligations. Privacy or security

concerns relating to our products and services could damage our reputation, deter customers, or result in legal or regulatory

proceedings and liability.

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• Our operating results may be adversely impacted by additional tax liabilities, higher than expected tax rates and other tax-related

factors.

• Our business is exposed to the risks associated with litigation, investigations and regulatory proceedings.

• Our indebtedness could adversely affect our financial position and cash flows from operations and prevent us from implementing our

strategy or fulfilling our contractual obligations.

• Delaware law, provisions in our governing documents, and our agreement with Microsoft could delay or prevent a change in control.

Risk Factors

Risks Related to Our Industry and Markets

Failure 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 industry

standards.

Our success depends on our ability to:

• timely identify industry changes, adapt our strategies, and develop new or enhance existing products and technologies that meet the

evolving needs of these markets, including due to unexpected changes in industry standards or disruptive technological innovation that

could render our products incompatible with products developed by other companies;

• develop new products and technologies through investments in research and development;

• launch new offerings with new business models including standalone software, cloud solutions, and software-, infrastructure-, or

platform-as-a-service solutions;

• expand the ecosystem for our products and technologies;

• meet evolving and prevailing customer and industry safety and compliance standards;

• manage product and software lifecycles to maintain customer and end user satisfaction;

• develop, acquire, and maintain the internal and external infrastructure needed to scale our business, including our acquisitions

integrations, customer support, e-commerce, IP licensing capabilities and cloud service capacity; and

• complete technical, financial, compliance, sales and marketing investments for some of the above activities.

We invest in research and development in markets where we have a limited operating history, which may not produce meaningful revenue for

several years, 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 adversely affected. Obtaining design wins may involve a lengthy process and depend on our ability to anticipate and provide

features and functionality that customers will demand. They also do not guarantee revenue. Failure to obtain a design win may prevent us from

obtaining future design wins in subsequent generations. We cannot ensure that the products and technologies we bring to market will provide

value to our customers and partners. If we fail any of these key success criteria, our financial results may be harmed.

We will offer enterprise customers NVIDIA AI cloud services directly and through our network of partners. Examples of these services include

NVIDIA DGX Cloud, which is cloud-based infrastructure and software for training AI models, and customizable pretrained AI models. NVIDIA has

partnered with leading cloud service providers to host these services in their data centers, and we entered into multi-year cloud service

agreements in the second half of fiscal year 2023 to support these offerings and our research and development activities. NVIDIA AI cloud

services may not be successful and will take time, resources and investment. We also offer or plan to offer standalone software solutions for AI

including NVIDIA AI Enterprise, NVIDIA Omniverse, NVIDIA DRIVE for automotive, and several other software solutions. These new

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business models or strategies may not be successful and we may fail to sell any meaningful standalone software or as-a-service solutions. We

may incur significant costs and may not achieve any significant revenue from these offerings.

Competition in our current and target markets could cause us to lose market share and revenue.

Our target markets remain competitive, and competition may intensify with expanding and changing product and service offerings, industry

standards, customer needs, new entrants and consolidations. Our competitors’ products, services and technologies, including those mentioned

above in this Annual Report on Form 10-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 prices for our products. Some of our competitors operate their own fabrication facilities, have

longer operating histories, larger customer bases, more comprehensive IP portfolios and patent protections, new designs and more design wins,

and greater financial, sales, marketing and distribution resources than we do. These competitors may be able to acquire market share and/or

prevent us from doing so, more effectively identify and capitalize upon opportunities in new markets and end user customer trends, more quickly

transition their products, and secure sufficient foundry capacity and packaging materials during a supply-constrained environment, which could

harm our business. Some of our customers have in-house expertise and internal development capabilities similar to 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 compete with our AI

cloud service offerings, and we may not be able to establish market share sufficient to achieve scale necessary to meet our business objectives.

If we are unable to successfully compete in this environment, demand for our products, services and technologies could decrease, which would

cause our revenue to decline.

Risks Related to Demand, Supply and Manufacturing

Failure to estimate customer demand properly has led and could lead to mismatches between supply and demand.

We use third parties to manufacture and assemble our products, and we have had and may in the future have long manufacturing lead times.

We are not provided guaranteed wafer, component 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 ultimately inaccurate, as we have experienced from time to time, there could be a

significant mismatch between supply and demand. This mismatch has resulted in both product shortages and excess 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 commitments, we may not be able to secure sufficient commitments for capacity to address our

business needs or our long-term demand expectations may change. Additionally, our ability to sell certain products has been and could be

impeded if components from third parties that are necessary for the finished product are not available. In periods of shortages impacting the

semiconductor industry and/or limited supply or capacity in our supply chain, the lead times on our orders may be extended. We have previously

experienced extended lead times of more than 12 months. We have paid premiums and provided deposits to secure future supply and capacity,

which have increased our product costs and may continue to do so. We may not have the ability to reduce our supply commitments at the same

rate or at all if our revenue declines.

Demand for our products is based on many factors in addition to the lead times described above that 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 demand for our products and impact the timing and volume of our revenue, including:

• competing technologies and competitor product releases and announcements;

• changes in business and economic conditions resulting in decreased end demand;

• sudden or sustained government lockdowns or actions to control case spread of COVID-19 or other global or local health issues;

• rapidly changing technology or customer requirements;

• time to market;

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• new product introductions and transitions resulting in less demand 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 AI cloud service offerings;

• the demand for cryptocurrency mining; or

• government actions or changes in governmental policies, such as increased restrictions on gaming usage.

Our supply, which includes inventory on hand, purchase obligations and prepaid supply agreements, has grown significantly due to current

supply chain conditions, complexity of our products, and recent reductions in demand. At the end of fiscal year 2023, purchase obligations and

prepaid supply agreements represented more than half of our total supply. We may incur inventory provisions if our inventory or supply

commitments are misaligned with demand for our products.

Our demand predictions may not be correct, as we have experienced from time to time. Product transitions are complex and frequently

negatively impact our revenue as we often ship both new and legacy architecture products simultaneously and we and our channel partners

prepare to ship and support new products. Our architecture transitions of Data Center, Professional Visualization, and Gaming products may

impair our ability to predict demand and impact our supply mix. Qualification time for new products, customers anticipating product transitions

and channel partners reducing channel inventory of legacy architectures ahead of new product introductions can create reductions or volatility in

our revenue. We have experienced and may in the future experience reduced demand for current generation architectures when customers

anticipate transitions, and we may be unable to sell multiple product architectures at the same time for current and future architecture transitions.

While we have managed prior product transitions and have previously sold multiple product architectures at the same time, these transitions are

difficult and prior trends may not continue. If we are unable to execute our architectural transitions as planned for any reason, our financial

results may be negatively impacted.

We sell most of our products through channel partners, who sell to distributors, retailers, and/or end customers. As a result, the decisions made

by our channel partners, distributors, retailers, and in response to changing market conditions and changes in end user demand for our products

have impacted and could in the future continue to impact our ability to 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 lead-time or capacity to

increase production and we may not be able to obtain sufficient inventory to fill orders on a timely basis. Even if we are able to increase

production levels to meet customer demand, we may not be able to do so in a cost-effective or timely manner, or our contract manufacturers

may experience supply constraints. If we fail to fulfill our customers’ orders on a timely basis, or at all, our customer relationships could be

damaged, we could lose revenue and market share and our reputation could be harmed.

If we overestimate our customers’ future demand for our products, or if customers cancel or defer orders or choose to purchase from our

competitors, we may not be able to reduce our inventory or other contractual purchase commitments. In the past, we have experienced a

reduction in average selling prices, including due to channel pricing programs that we have implemented and may continue to implement, as a

result of our overestimation of future demand, and we may need 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 to continue to do so for other products in the future. We have also

written-down our inventory, incurred cancellation penalties, and recorded impairments. These impacts were amplified by our placement of non-

cancellable and non-returnable purchasing terms, well in advance of our historical lead times and could be exacerbated if we need to make

changes to the design of future products. The risk of these impacts has increased as our purchase obligations and prepaids have grown and

become a greater portion of our total supply while our

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revenue has sequentially declined. All of these factors may negatively impact our gross margins and financial results.

We build technology and products for use cases and applications that may be new or may not yet exist. Examples include our Omniverse

platform and third-party large language models and generative models. Our demand estimates for these use cases and applications can be

incorrect and create volatility in our revenue or supply levels, and we may not be able to generate any revenue from these use cases and

applications.

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 if we experience other supply constraints caused by natural disasters, pandemics or other events, such as the COVID-19

pandemic. In addition, geopolitical tensions, such as those involving Taiwan and China, which comprise a significant portion of our revenue and

where we have suppliers, contract manufacturers, and assembly partners who are critical to our supply continuity, could have a material adverse

impact on us.

The use of our GPUs for other than that for which they were designed and marketed, including new and unexpected use cases, has impacted

and can in the future impact demand for our products, including by leading to inconsistent spikes and drops in demand. For example, a number

of years ago, our Gaming GPUs began to be used for digital currency mining, including blockchain-based platforms such as Ethereum. It is

difficult for us to estimate with any reasonable degree of precision, the past or current impact of cryptocurrency mining, or forecast the future

impact of cryptocurrency mining, on demand for our products. Volatility in the cryptocurrency market, including new compute technologies, price

changes in cryptocurrencies, government cryptocurrency policies and regulations, new cryptocurrency standards, and changes in the method of

verifying blockchain transactions, has impacted and can in the future impact cryptocurrency mining and demand for our products and can further

impact our ability to estimate demand for our products. Changes to cryptocurrency standards and processes including, but not limited to, the

recently implemented Ethereum 2.0 merge may decrease the usage of GPUs for Ethereum mining as well as create increased aftermarket sales

of our GPUs, which could negatively impact retail prices for our GPUs and reduce demand for our new GPUs. We previously introduced Lite

Hash Rate, or LHR, GeForce GPUs with limited Ethereum mining capability and provided CMP products in an effort to address demand from

gamers and direct miners to CMP. With the Ethereum 2.0 merge, NVIDIA Ampere and Ada Lovelace architectures no longer include LHR. In

addition, our new products or previously sold products may be resold online or on the unauthorized “gray market,” which also makes demand

forecasting difficult. Gray market products and reseller marketplaces compete with our new products and distribution channels.

Additionally, we depend on developers and other third parties to build accelerated computing applications that leverage our platforms. We also

rely on third-party content providers and publishers to make their content available on our platforms such as GeForce NOW. Failure by

developers to build applications that leverage our platforms, or failure by third-party content providers or 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 affect customer demand.

Dependency on third-party suppliers and their technology to manufacture, assemble, test, package or design our products reduces

our control over product quantity and quality, manufacturing yields, development, enhancement 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 package our products, but instead contract with independent subcontractors. We also rely on third-party software development tools to assist

us in the design, simulation and verification of new products or product enhancements. The design requirements necessary to meet consumer

demands for greater functionality from our products may exceed the capabilities of available software development tools. We face several risks

which have adversely affected or could adversely affect our ability to meet customer demand and scale our supply chain, negatively impact

longer-term demand for our products and services, and adversely affect our business operations, gross margin, revenue and/or financial results,

including:

• lack of guaranteed supply of wafer, component and capacity or decommitment and potential higher wafer and component prices, from

incorrectly estimating demand and failing to place orders with our suppliers with sufficient quantities or in a timely manner;

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• failure by our foundries or contract manufacturers to procure raw materials or to provide adequate levels of manufacturing or test

capacity for our products;

• failure by our foundries to develop, obtain or successfully implement high quality process technologies, including transitions to smaller

geometry process technologies such as advanced process node technologies and memory designs needed to manufacture our

products;

• limited number and geographic concentration of global suppliers, foundries, contract manufacturers, assembly and test providers, and

memory manufacturers;

• loss of a supplier and additional expense and/or production delays as a result of qualifying a new foundry or subcontractor and

commencing volume production or testing in the event of a loss of or a decision to add or change 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 products 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 our competitors’ or other customers’ orders over ours;

• requirements to place orders that are not cancellable upon changes in demand or requirements to prepay for supply in advance;

• low manufacturing yields resulting from a failure in our product design or a foundry’s proprietary process technology; and

• disruptions in manufacturing, assembly and other processes due to closures related to heat waves or other natural disasters and

electricity 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 us to lose market share.

Our hardware and software product offerings are complex and they have in the past and may in the future contain defects or security

vulnerabilities, or experience failures or unsatisfactory performance due to any number of issues in design, fabrication, packaging, materials

and/or use within a system. These risks may increase as our products are introduced into new devices, markets, technologies and applications

or as new versions are released. These risks further increase when we rely on partners to supply and manufacture components that are used in

our products, as these arrangements reduce our direct control over production. Although arrangements with component providers may contain

provisions for product defect expense reimbursement, we generally remain 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 the past and may in the future be only discovered after a product

or service has been shipped or used. Undiscovered vulnerabilities in our products or services could result in loss of data or intangible property,

or expose our end customers to unscrupulous third parties who develop and deploy malicious software programs that could attack our products

or services. Defects or failure of our products to perform to specifications could lead to substantial damage to the products or the product in

which our device has been integrated by OEMs, ODMs, AIBs and automotive manufacturers and tier 1 automotive suppliers, and to the user of

such end product. Any such defect may cause us to incur significant warranty, support and repair or replacement costs as part of a product recall

or otherwise, write-off the value of related inventory, and divert the attention of our engineering and management personnel from our product

development efforts to find and correct the issue. Our efforts to remedy these issues may not be timely or satisfactory to our customers. An error

or defect in new products, releases, or related software drivers after commencement of commercial shipments could result in failure to achieve

market acceptance, loss of design wins, temporary or permanent withdrawal from a product or market, and harm to our relationships with

existing and prospective customers and partners and consumers’ perceptions of our brand, which would in turn negatively impact our business

operations, gross margin, revenue and/or financial results. We may be required to reimburse our customers, partners or consumers, including for

costs to repair or replace products in the field or in connection with indemnification obligations, or pay fines imposed by regulatory agencies.

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For example, a defect was identified in a third-party component embedded in certain Data Center products. This defect has had, and other

defects may in the future have, an adverse 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 warranty obligations, we may need to record additional amounts in the future if our estimate proves to be incorrect. In

general, if a product liability claim regarding any of our 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 of defending the claim could be significant and would divert the efforts of our

technical and management personnel and harm our business. Further, our business liability insurance may be inadequate or future coverage

may be unavailable on acceptable terms, which could adversely impact our financial results.

Risks Related to Our Global Operating Business

Adverse 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, currency 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, have in the past

and/or could in the future have adverse, wide-ranging effects on our business and financial results, including:

• increased costs for wafers, components, logistics, and other supply chain expenses, which have negatively impacted our gross margin

and may continue to do so;

• increased supply, employee, facilities and infrastructure costs and volatility in the financial markets, which have reduced and may in the

future reduce our 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 on their supply commitments to us and our customers’ or our licensees’ inability to supply products

to customers and/or end users;

• limits on our ability to forecast operating results and make business decisions;

• the insolvency of key suppliers, distributors, customers or licensing parties; reduced profitability may also cause some customers to

scale back operations, exit businesses, or file for bankruptcy protection and potentially cease operations; lead to mergers, consolidations

or strategic alliances among other companies, which could adversely affect our ability to compete effectively; and

• increased credit and collectability risks, higher borrowing costs or reduced availability of capital markets, reduced liquidity, adverse

impacts on our suppliers, failures of counterparties including financial institutions and insurers, asset impairments, and declines in the

value of our financial instruments.

International operations are a significant part of our business, which exposes us to us to risks that could harm our business.

We conduct our business and have offices worldwide. Our semiconductor wafers are manufactured, assembled, tested and packaged by third

parties located outside of the United States, and we generated 69% of our revenue during fiscal year 2023 from sales outside of the United

States. The global nature of our business subjects us to a number of risks and uncertainties, which have had in the past and could in the future

have a material adverse effect on our business, financial condition and results of operations, including domestic and international economic and

political conditions between countries in which we and our suppliers and manufacturers do business, government lockdowns to control case

spread of COVID-19 or other global or local health issues, differing legal standards with respect to protection of IP and employment practices,

domestic and international business and cultural practices that differ, disruptions to capital markets, counter-inflation policies, and/or currency

fluctuations, and natural disasters, acts of war or other military actions, terrorism, public health issues, and other catastrophic events.

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Product, system security, and data protection breaches, as well as cyber-attacks, could disrupt our operations, reduce our expected

revenue and increase our expenses, which could adversely affect our stock price and damage our reputation.

Security breaches, computer malware, social-engineering 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 increasingly sophisticated, making it more

difficult to successfully detect, defend against them or implement adequate preventative measures.

Cyber-attacks, including ransomware attacks by organized criminal threat actors, nation-states, and nation-state-supported actors, may become

more prevalent and severe. Our ability to recover from ransomware attacks may be limited if our backups have been affected by the attack, or if

restoring from backups is delayed or not feasible.

Threat actors, sophisticated nation-states, and nation-state-supported actors now engage and are expected to continue to engage in cyber-

attacks. Due to increasing geopolitical conflicts and during times of war or other major conflicts, we and the third parties upon which we rely may

be vulnerable to a heightened risk of cyber-attacks that could materially disrupt our ability to provide services and products. Furthermore, we rely

on products and services provided by third-party suppliers to operate certain critical 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 and infrastructure in our supply chain or our partners’ supply chains have not been

compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology

systems, including our products and services, or the third-party information technology systems that support our services. Our ability to monitor

these third parties’ information security practices is limited, and these may not have adequate information security measures in place. In

addition, if one of our third-party suppliers suffers a security breach, our response may be limited or more difficult because we may not have

direct access to their systems, logs and other information related to the security breach. Additionally, we are incorporated into the supply chain of

a large number of entities worldwide and, as a result, if our products or services are compromised, a significant number of our customers and

their data could be affected, which could result in potential liability and harm our business.

To defend against cyber-attacks, we must continuously engineer more secure products and enhance security and reliability features, which is

expected to result in increased expenses. We must also continue to develop our security measures, ensure our suppliers have appropriate

security measures in place, and continue to meet the evolving security requirements of our customers, applicable industry standards, and

government regulations. While we take steps to detect and remediate certain vulnerabilities that we have identified, we may not always be able

to detect 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 a security incident has occurred. Further, we may experience delays in

developing and deploying remedial measures designed to address identified vulnerabilities. These vulnerabilities could result in reputational and

financial harm.

We hold confidential and proprietary information, including information from partners and customers. Breaches of our security measures, along

with reported or perceived vulnerabilities or unapproved dissemination of proprietary information or sensitive or confidential data about us or third

parties could expose us and the parties affected to a risk of loss or misuse of this information, potentially resulting in litigation and subsequent

liability, regulatory inquiries or actions, damage to our brand and reputation or other harm, including financial, to our business. For example, we

hold propriety game source code from third-party partners in our GFN service. Breaches of our GFN security measures, which have happened in

the past, could expose our partners to a risk of loss or misuse of this source code, damage both us and our partners, and expose NVIDIA to

potential litigation and liability. If we or a third party we rely on experience a security incident, which has occurred in the past, or are perceived to

have experienced a security incident, we may experience adverse consequences, including government enforcement actions, additional

reporting requirements and/or oversight, restrictions on processing data, litigation, indemnification obligations, reputational harm, diversion of

funds, financial loss, loss of data, material disruptions in our systems and operations, supply chain, and ability to produce, sell and distribute our

goods and services, and other similar harms. Inability to fulfill orders, delayed sales, lower margins or lost customers as a result of these

disruptions could adversely affect our financial results, stock price and reputation.

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Business disruptions could harm our operations, lead to a decline in revenue and increase our costs.

Our worldwide operations could be disrupted by natural disasters and extreme weather conditions, power or water shortages,

telecommunications failures, cloud service provider outages, terrorist attacks, or acts of violence, political and/or civil unrest, acts of war or other

military actions, epidemics or pandemics and other natural or man-made disasters and catastrophic events. Our corporate headquarters, a large

portion of our current data center capacity, and a portion of our research and development activities are located in California, and other critical

business operations, finished goods inventory, and some of our suppliers are located in Asia, making our operations vulnerable to natural

disasters such as earthquakes, wildfires, or other business disruptions occurring in these geographical areas. Catastrophic events can also have

an impact on third-party vendors who provide us critical infrastructure services for IT and research and development systems and personnel.

Geopolitical and domestic political developments and other events beyond our control, can increase economic volatility globally. Political

instability, changes in government or adverse political developments in or around any of the major countries in which we do business would also

likely harm our business, financial condition and results of operations. Worldwide geopolitical tensions and conflicts, including but not limited to

China, Hong Kong, Israel, Korea and Taiwan where the manufacture of our product components and final assembly of our products are

concentrated may result in changing regulatory requirements, and other disruptions that could impact our operations and operating strategies,

product demand, access to global markets, hiring, and profitability. For example, other countries have restricted and may continue in the future to

restrict business with the State of Israel, where we have engineering, sales support operations and manufacturing, and companies with Israeli

operations, including by economic boycotts. Our operations could be harmed and our costs could increase if manufacturing, logistics or other

operations are disrupted for any reason, including natural disasters, high heat events or water shortages, information technology system failures,

military actions or economic, business, labor, environmental, public health, or political issues. The ultimate impact on us, our third-party foundries

and other suppliers of being located and consolidated in certain geographical areas is unknown. In the event a disaster, war or catastrophic

event affects us, the third-party systems on which we rely, or our customers, our business could be harmed as a result of declines in revenue,

increases in expenses, and substantial expenditures and time spent to fully resume operations. All of these risks and conditions could materially

adversely affect our future sales and operating results.

Climate change may have a long-term impact on our business.

Climate change may have an increasingly adverse impact on our business and those of our customers, partners and vendors. Water and energy

availability and reliability in the communities where we conduct business is critical, and certain of our facilities may be vulnerable to the impacts

of extreme weather events. Extreme heat and wind coupled with dry conditions in Northern California may lead to power safety shut offs due to

wildfire risk, which can have adverse implications for our Santa Clara, California headquarter offices and data centers, including impairing the

ability of our employees to work effectively. Climate change, its impact on our supply chain and critical infrastructure worldwide, and its potential

to increase political instability in regions where we, our customers, partners and our vendors do business, may disrupt our business and cause

us to experience higher attrition, losses and costs to maintain or resume operations. Although we maintain insurance coverage for a variety of

property, casualty, and other risks, the types and amounts of insurance we obtain vary depending on availability and cost. Some of our policies

have large deductibles and broad exclusions, and our insurance providers may be unable or unwilling to pay a claim. Losses not covered by

insurance may be large, which could harm our results of operations and financial condition.

Our business and those of our suppliers and customers, may also be subject to climate-related laws, regulations and lawsuits. Regulations such

as carbon taxes, fuel or energy taxes, and pollution limits could result in greater direct costs, including costs associated with changes to

manufacturing processes or the procurement of raw materials used in manufacturing processes, increased capital expenditures to improve

facilities and equipment, and higher compliance and energy costs to reduce emissions, as well as greater indirect costs resulting from our

customers, suppliers or both incurring additional compliance costs that are passed on to us. These costs and restrictions could harm our

business and results of operations by increasing our expenses or requiring us to alter our operations and product design activities. Stakeholder

groups may find us insufficiently responsive to the implications of climate change, and therefore we may face legal action or reputational harm.

We may not achieve our stated goal to source 100% of our global electricity use from renewable energy by the end of fiscal year 2025, which

could harm our reputation, or we may incur additional,

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unexpected costs to achieve such a goal. We may also experience contractual disputes due to supply chain delays arising from climate change-

related disruptions, which could result in increased litigation and costs.

We also face risks related to business trends that may be influenced by climate change concerns. We may face decreased demand for

computationally powerful but energy intensive products, such as our GPUs, despite their energy efficient design and operation, and/or increased

consumer or customer expectations around the energy efficiency of our products, could negatively impact our business.

We may not be able to realize the potential benefits of business investments or acquisitions, and we may not be able to successfully

integrate acquisition targets, which could hurt our ability to grow our business, develop new products or sell our products.

We have acquired and invested and may continue to do so in businesses that offer products, services and technologies that we believe will help

expand or enhance our existing strategic objectives. Acquisitions or investments involve significant challenges and risks and could impair our

ability to grow our business, develop new products or sell our products and ultimately could have a negative impact on our financial results. If we

pursue a particular transaction, we may limit our ability to enter into other transactions that could help us achieve our other strategic objectives. If

we are unable to timely complete acquisitions, including due to delays and challenges in obtaining regulatory approvals, we may be unable to

pursue other transactions, we may not be able to retain critical talent from the target company, technology may evolve and make the acquisition

less attractive, and other changes can take place which could reduce the anticipated benefits of the transaction and negatively impact our

business. For example, in February 2022, NVIDIA and SoftBank announced the termination of the Share Purchase Agreement whereby NVIDIA

would have acquired Arm from SoftBank due to significant regulatory challenges preventing the completion of the transaction. We recorded in

operating expenses a $1.35 billion charge in fiscal year 2023 reflecting the write-off of the prepayment provided at signing. Regulators could also

impose conditions that reduce the ultimate value of our acquisitions. In addition, to the extent that our perceived ability to consummate

acquisitions has been harmed, future acquisitions may be more difficult, complex or expensive. Further, if we hold investments in publicly traded

companies, they could create volatility in our results and may generate losses up to the value of the investment.

Additional risks related to acquisitions or strategic investments include, but are not limited to:

• difficulty in integrating the technology, systems, products, policies, processes, or operations and integrating and retaining the employees,

including key personnel, of the acquired business;

• diversion of capital and other resources, including management’s attention;

• assumption of liabilities and incurring amortization expenses, impairment charges to goodwill or write-downs of acquired assets;

• integrating accounting, forecasting and controls, procedures and reporting cycles;

• coordinating and integrating operations, particularly in countries in which we do not currently operate;

• difficulty in realizing a satisfactory return and uncertainties to realize the benefits of an acquisition or strategic investment, if at all;

• difficulty or inability in obtaining governmental, regulatory approval or restrictions or other consents and approvals or financing;

• stock price impact, fines, fees or reputation harm if we are unable to obtain regulatory approval for an acquisition or are otherwise

unable to close an acquisition;

• legal proceedings initiated as a result of an acquisition or investment;

• potential issuances of debt to finance our acquisitions, resulting in increased debt, increased interest expense, and compliance with debt

covenants or other restrictions;

• the potential for our acquisitions to result in dilutive issuances of our equity securities;

• the potential variability of the amount and form of any performance-based consideration;

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• negative changes in general economic conditions in the regions or the industries in which we or our target operate;

• exposure to additional cybersecurity risks and vulnerabilities;

• potential failure of our due diligence processes to identify significant issues with the assets or company in which we are investing or are

acquiring; and

• impairment of relationships with, or loss of our or our target’s employees, vendors and customers.

For example, when integrating acquisition target systems into our own, we have experienced and may continue to experience challenges

including lengthy and costly systems integration, delays in purchasing and shipping products, difficulties with system integration via electronic

data interchange and other processes with our key suppliers and customers, and training and change management needs of integration

personnel. These challenges have impacted our results of operations and may continue to do so in the future.

We receive a significant amount of our revenue from a limited number of customers and our revenue could be adversely affected if we

lose or are prevented from selling to any of these customers.

We receive a significant amount of our revenue from a limited number of customers within our distribution and partner network. With several of

these distributors and partners, we are selling multiple target market platforms through their channels. Our operating results depend on sales

within our partner network, as well as the ability of these partners to sell products that incorporate our processors. In the future, these partners

may decide to purchase fewer products, not to incorporate our products into their ecosystem, or to alter their purchasing patterns in some other

way. Because most of our sales are made on a purchase order basis, our customers can cancel, change or delay product purchase

commitments with little or no notice to us and without penalty. Our partners or customers may develop their own solutions; our customers may

purchase products from our competitors; and our partners may discontinue sales or lose market share in the markets for which they purchase

our products, all of which may alter partners’ or customers’ purchasing patterns. The loss of any of our large customers, a significant reduction in

purchases by them, our inability to sell to a customer due to U.S. or other countries’ trade restrictions, or any difficulties in collecting accounts

receivable would likely harm our financial condition and results of operations.

If we are unable to attract, retain and motivate our executives and key employees, our business may be harmed.

To be competitive and execute our business strategy successfully, we must attract, retain and motivate our executives and key employees and

recruit and develop diverse talent. Labor is subject to external factors that are beyond our control, including our industry’s highly competitive

market for skilled workers and leaders, cost inflation, the COVID-19 pandemic and workforce participation rates. Changes in immigration and

work permit regulations or in their administration or interpretation could impair our ability to attract and retain qualified employees. Competition

for personnel results in increased costs in the form of cash and stock-based compensation, and in times of stock price volatility, as we have

experienced in the past and may experience in the future, the retentive value of our stock-based compensation may decrease. Additionally, we

are highly dependent on the services of our longstanding executive team. Failure to ensure effective succession planning, transfer of knowledge

and smooth transitions involving executives and key employees could hinder our strategic planning and execution and long-term success.

Our business is dependent upon the proper functioning of our business processes and information systems and modification or

interruption of such systems may disrupt our business, processes and internal controls.

We rely upon internal processes and information systems to support key business functions, including our assessment of internal controls over

financial reporting as required by Section 404 of the Sarbanes-Oxley Act. The efficient operation and scalability of these processes and systems

is critical to support our growth. In fiscal year 2023, we continued the implementation of accounting and consolidation functionality related to a

new enterprise resource planning, or ERP, system. Any ERP system problems upon implementation, such as quality issues or programming

errors, could impact our continued ability to successfully operate our business or to timely and accurately report our financial results. These

changes may be costly and disruptive to our operations and could impose substantial demands on management time. Failure to implement new

or updated controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting

obligations.

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Identification of material weaknesses in our internal controls, even if quickly remediated once disclosed, may cause investors to lose confidence

in our financial statements and our stock price may decline. Remediation of any material weakness could require us to incur significant

expenses, and if we fail to remediate any material weakness, our financial statements may be inaccurate, we may be required to restate our

financial statements, our ability to report our financial results on a timely and accurate basis may be adversely affected, our access to the capital

markets may be restricted, our stock price may decline, and we may be subject to sanctions or investigation by regulatory authorities.

The COVID-19 pandemic has affected and could continue to have a material adverse impact on our financial condition and results of

operations.

The COVID-19 pandemic has impacted and may continue to impact our workforce and operations and those of our customers, partners, vendors

and suppliers. COVID-19-related disruptions have created and may continue to create supply chain and logistics constraints, and COVID-19

containment around the world has put restrictions on, among other areas, manufacturing facilities, commerce, and support operations.

Restrictions may be imposed or reinstated as the pandemic resurfaces, such as lockdown measures due to COVID-19 containment efforts in

China. End customer sales for our products in China have been negatively impacted by lockdowns and this impact may continue if lockdowns

return. COVID-19 has also resulted in, and may continue to result in, disruption of and volatility in global financial markets, which could impact

overall technology spending or negatively affect our stock price and liquidity. All of these factors have had or could in the future have a material

negative impact on our business.

We modified our business and workforce practices in response to COVID-19, including with respect to flexible work and social distancing

measures, and we may take further actions as required by government regulations or in the best interests of our employees, customers, partners

and suppliers. These and other measures have caused and may in the future cause us to incur incremental expenses and costs.

The extent of the impact of the COVID-19 pandemic on our operational and financial performance and our ability to timely execute our business

strategies may continue to be difficult to measure and predict. The impact of COVID-19 can also exacerbate other risks discussed in these risk

factors.

Our operating results have in the past fluctuated and may in the future fluctuate, and if our operating results are below the

expectations of securities analysts or investors, our stock price could decline.

Our operating results have in the past fluctuated and may continue to fluctuate due to numerous factors described in these risk factors.

Therefore, investors should not rely on past comparisons of our results of operations as an indication of our future performance. Additional

factors that could affect our results of operations include, but are not limited to:

• our ability to adjust spending to offset revenue shortfalls due to the multi-year development cycle for some of our products and services;

• our ability to comply with our customers’ contractual obligations;

• our extended payment term arrangements with certain customers, the inability of some customers to make required payments, our

ability to obtain credit insurance for these customers and their extended payment terms, and customer bad debt write-offs;

• our vendors' payment requirements;

• unanticipated costs associated with environmental liabilities; and

• changes in financial accounting standards or interpretations of existing standards.

Any one or more of the factors discussed above could prevent us from achieving our anticipated future financial results. For example, we have

granted and may continue to grant extended payment terms to some customers, particularly during macroeconomic downturns, which could

impact our ability to collect payment. Our vendors have requested and may continue to ask for shorter payment terms, which may impact our

cash flow generation. These arrangements reduce the cash we have available for general business operations. Failure to meet our expectations

or the expectations of our investors or security analysts is likely to cause our stock price to decline, as it has in the past, or experience

substantial price volatility.

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Risks Related to Regulatory, Legal, Our Stock and Other Matters

Our operations could be affected by the complex laws, rules and regulations to which our business is subject, and political and other

actions may adversely impact our business.

We are subject to laws and regulations domestically and worldwide, affecting our operations in areas including, but not limited to, IP ownership

and infringement; taxes; import and export requirements and tariffs; anti-corruption, including the Foreign Corrupt Practices Act; business

acquisitions; foreign exchange controls and cash repatriation restrictions; data privacy requirements; competition and antitrust; advertising;

employment; product regulations; cybersecurity; environmental, health, and safety requirements; the responsible use of AI; climate change;

cryptocurrency; and consumer laws. Compliance with such requirements can be onerous and expensive, could impact our competitive position,

and may negatively impact our business operations and ability to manufacture and ship our products. There can be no assurance that our

employees, contractors, suppliers, customers or agents will not violate applicable laws or the policies, controls, and procedures that we have

designed to help ensure compliance with such laws, and violations could result in fines, criminal sanctions against us, our officers, or our

employees, prohibitions on the conduct of our business, and damage to our reputation. Changes to the laws, rules and regulations to which we

are subject, or changes to their interpretation and enforcement could lead to materially greater compliance and other costs and/or further

restrictions on our ability to manufacture and supply our products and operate our business. For example, we may face increased compliance

costs as a result of changes or increases in anti-competition legislation, regulation, administrative rule making, increased focus from regulators

on cybersecurity vulnerabilities and risks, and enforcement activity resulting from growing public concern over concentration of economic power

in corporations. Revisions to laws or regulations or their interpretation and enforcement could also result in increased taxation, trade sanctions,

the imposition of or increase to import duties or tariffs, restrictions and controls on imports or exports, or other retaliatory actions, which could

have an adverse effect on our business plans or impact the timing of our shipments. Additionally, changes in the public perception of

governments in the regions where we operate or plan to operate could negatively impact our business and results of operations.

Government actions, including trade protection and national security policies of U.S. and foreign government bodies, such as tariffs, import or

export regulations, including deemed export restrictions, trade and economic sanctions, decrees, quotas or other trade barriers and restrictions

could affect our ability to ship products, provide services to our customers and employees, do business without an export license with entities on

the U.S. Department of Commerce’s U.S. Entity List or other U.S. government restricted parties lists (which is expected to change from time to

time), and generally fulfill our contractual obligations and have a material adverse effect on our business. If we were ever found to have violated

export control laws or sanctions of the U.S. or similar applicable non-U.S. laws, even if the violation occurred without our knowledge, we may be

subject to various penalties available under the laws, any of which could have a material and adverse impact on our business, operating results

and financial condition.

For example, in response to the war in Ukraine, the United States and other jurisdictions imposed economic sanctions and export control

measures which blocked the passage of our products, services and support into Russia, Belarus, and certain regions of Ukraine. In fiscal year

2023, we stopped direct sales to Russia and closed business operations in Russia. Concurrently, the war in Ukraine has impacted end customer

sales in EMEA and may continue to do so in the future.

The increasing focus on the strategic importance of AI technologies has already resulted in regulatory restrictions that target products and

services capable of enabling or facilitating AI, and may in the future result in additional restrictions impacting some or all of our product and

service offerings. Such restrictions could include additional unilateral or multilateral export controls on certain products or technology, including

but not limited to AI technologies. As geopolitical tensions have increased, semiconductors associated with AI, including GPUs and associated

products, are increasingly the focus of export control restrictions proposed by stakeholders in the U.S. and its allies, and it is likely that additional

unilateral or multilateral controls will be adopted. Such controls may be very broad in scope and application, prohibit us from exporting our

products to any or all customers in one or more markets, including but not limited to China, and could negatively impact our manufacturing,

testing, and warehousing locations and options, or could impose other conditions that limit our ability to serve demand abroad and could

negatively and materially impact our business, revenue, and financial results. Export controls targeting GPUs and semiconductors associated

with AI, which are increasingly likely, would restrict our ability to export our technology, products, or services even though competitors may not be

subject to similar restrictions, creating a competitive disadvantage for us and

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negatively impacting our business and financial results. Increasing use of economic sanctions may also impact demand for our products or

services, negatively impacting our business and financial results. Additional unilateral or multilateral controls are also likely to include deemed

export control limitations that negatively impact the ability of our research and development teams to execute our roadmap or other objectives in

a timely manner. Additional export restrictions may not only impact our ability to serve overseas markets, but also provoke responses from

foreign governments, including China, that negatively impact our supply chain or our ability to provide our products and services to customers in

all markets worldwide, which could also substantially reduce our revenue.

During the third quarter of fiscal year 2023, the U.S. government, or USG, announced new export restrictions and export licensing requirements

targeting China’s semiconductor and supercomputing industries. These restrictions impact exports of certain chips, as well as software,

hardware, equipment, and technology used to develop, produce, and manufacture certain chips, to China (including Hong Kong and Macau) and

Russia, and specifically impact our A100 and H100 integrated circuits, DGX or any other systems or boards which incorporate A100 or H100

integrated circuits and our A100X. The new license requirements also apply to any future NVIDIA integrated circuit achieving certain peak

performance and chip-to-chip I/O performance thresholds, as well as any system or board that includes those circuits. There are also now

licensing requirements to export a wide array of products, including networking products, destined for certain end users and for certain end uses

in China.

We are required to transition certain operations out of China (including Hong Kong), which could be costly and time consuming, and adversely

affect our research and development and supply and distribution operations, as well as our revenue, during any such transition period.

We have engaged with customers in China to provide alternative products not subject to the new license requirements, such as our new A800

offering. To the extent that a customer requires products covered by the new license requirements, we may seek a license for the customer but

have no assurance that the USG will grant any exemptions or licenses for any customer, or that the USG will act on them in a timely manner.

The new requirements may have a disproportionate impact on NVIDIA and may disadvantage NVIDIA against certain of our competitors who sell

products that are not subject to the new restrictions or may be able to acquire licenses for their products.

Management of these new license and other requirements is complicated and time consuming. Our results and competitive position may be

harmed if customers in China do not want to purchase our alternative product offerings, if customers purchase product from competitors, if

customers develop their own internal solution, if we are unable to provide contractual warranty or other extended service obligations, if the USG

does not grant licenses in a timely manner or denies licenses to significant customers, or if we incur significant transition costs. Additionally, if we

are unable to sell our alternative product offerings in China, we may have excess inventory, harming our results. Even if the USG grants any

requested licenses, the licenses may be temporary or impose burdensome conditions that we cannot or choose not to fulfill. The new

requirements may benefit certain of our competitors, as the licensing process will make our pre-sale and post-sale technical support efforts more

cumbersome and less certain, and encourage customers in China to pursue alternatives to our products, including semiconductor suppliers

based in China, Europe, and Israel.

Additionally, restrictions imposed by the Chinese government on the duration of gaming activities and access to games may adversely affect our

Gaming revenue, and increased oversight of digital platform companies may adversely affect our Data Center revenue.

Increased scrutiny from shareholders, regulators and others regarding our environmental, social and governance responsibilities

could result in additional costs or risks and adversely impact our reputation and willingness of customers and suppliers to do

business with us.

Shareholder advocacy groups, certain investment funds, other market participants, shareholders and customers have placed increased

importance on the implications of the social and environmental cost of their investments and these parties, as well as government regulators,

have focused increasingly on corporate ESG and sustainability practices and disclosures, including those associated with climate change and

human rights. Stakeholders may not be satisfied with our ESG practices or the speed of their adoption. Additionally, our ESG practices, oversight

of ESG practices, or disclosure controls may not meet evolving shareholder, regulator, or other industry stakeholder expectations, or we may fail

to meet sustainability disclosure or ESG reporting standards. We could also incur additional costs and require additional resources to monitor,

report, and comply with various ESG practices, choose not to conduct business with potential

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customers, or discontinue or not expand business with existing customers due to our policies. These factors may negatively harm our brand,

reputation and business activities or expose us to liability.

Issues relating to the responsible use of our technologies, including AI in our offerings, may result in reputational and financial harm

and liability.

Concerns relating to the responsible use of new and evolving technologies, such as AI, in our products and services may result in reputational

and financial harm and liability, and may cause us to incur costs to resolve such issues. We are increasingly building AI capabilities into many of

our products and services. AI poses emerging ethical issues and presents risks and challenges that could affect its adoption, and therefore our

business. If we enable or offer solutions that draw controversy due to their perceived or actual impact on society, such as AI solutions that have

unintended consequences or are controversial because of their impact on human rights, privacy, employment, or other social, economic, or

political issues, or if we are unable to develop effective internal policies and frameworks relating to the responsible development and use of AI

models and systems offered through our sales channels, we may experience brand or reputational harm, competitive harm or legal liability.

Compliance with government regulation in the area of AI ethics may also increase the cost of related research and development, and changes in

AI-related regulation could disproportionately impact and disadvantage us and require us to change our business practices, which may

negatively impact our financial results. Our failure to address concerns relating to the responsible use of AI by us or others could undermine

public confidence in AI and slow adoption of AI in our products and services or cause reputational harm.

Actions to adequately protect our IP rights could result in substantial costs to us and our ability to compete could be harmed if we are

unsuccessful or if we are prohibited from making or selling our products.

From time to time, we are involved in lawsuits or other legal proceedings alleging patent infringement or other IP rights violations by us, our

employees or parties that we have agreed to indemnify. An unfavorable ruling could include significant damages, invalidation of one or more

patents, indemnification of third parties, payment of lost profits, or injunctive relief. Claims that our products or processes infringe the IP rights of

others, regardless of their merit, could cause us to incur significant costs to respond to, defend, and resolve such claims, and they may also

divert the efforts and attention of management and technical personnel.

We may commence legal proceedings to protect our IP rights, which may increase our operating expenses. We could be subject to countersuits

as a result. If infringement claims are made against us or our products are found to infringe a third party’s IP, we or one of our indemnitees may

have to seek a license to the third party’s IP rights. If we or one of our indemnitees is unable to obtain such a license, on acceptable terms or at

all, we could be subject to substantial liabilities or have to suspend or discontinue the manufacture and sale of one or more of our products. We

may also have to make royalty or other payments, or cross license our technology. If these arrangements are not concluded on commercially

reasonable terms, our business could be negatively impacted. Furthermore, the indemnification of a customer or other indemnitee may increase

our operating expenses and negatively impact our operating results.

We rely on patents, trademarks, trade secrets, employee and third-party nondisclosure agreements, licensing arrangements, and the laws of the

countries in which we operate to protect our IP. Foreign laws may not protect our products or IP rights to the same extent as United States law.

This makes the possibility of piracy of our technology and products more likely. The theft or unauthorized use or publication of our trade secrets

and other confidential information could harm our competitive position and reduce acceptance of our products; as a result, the value of our

investment in research and development, product development, and marketing could be reduced. We also may face risks to our IP if our

employees are hired by competitors. We continuously assess whether and where to seek formal protection for existing and new innovations and

technologies but cannot be certain whether our applications for such protections will be approved, and, if approved, whether they will be

enforceable.

We are subject to stringent and changing data privacy and security laws, rules, regulations, and other obligations. Privacy or security

concerns relating to our products and services could damage our reputation, deter current and potential customers, or result in legal

or regulatory proceedings and liability.

We may process sensitive, confidential or personal data or information that is subject to privacy and security laws, regulations, industry

standards, external and internal policies, contracts and other obligations that govern the processing of such data by us and on our behalf.

Concerns about our practices or the ultimate use

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of our products and services with regard to the collection, use, retention, security or disclosure of personal information or other privacy-related

matters, including for use in AI, even if unfounded, could damage our reputation and adversely affect our operating results. The theft, loss, or

misuse of personal data in our possession or by one of our partners could result in damage to our reputation, regulatory proceedings, disruption

of our business activities or increased security costs and costs related to defending legal claims.

In the United States, federal, state and local authorities have enacted numerous data privacy and security laws, including for data breach

notification, personal data privacy, and consumer protection. The California Consumer Privacy Act of 2018, or CCPA, gives California residents

the right to access, delete and opt-out of certain sharing of their personal information, and to receive detailed information about how it is used

and shared. The CCPA allows for statutory fines of up to $7,500 per violation and the law created a private right of action for certain data

breaches. The California Privacy Rights Act of 2020, or CPRA, became operative in 2023, and restricts the use of certain categories of sensitive

personal information; further restricts the use of cross-contextual advertising techniques; restricts the retention of personal information; expands

the types of data breaches subject to the private right of action; and establishes the California Privacy Protection Agency which can impose

administrative fines for noncompliance. Virginia, Colorado, Utah and Connecticut have each passed their own privacy legislation which differ

from the CPRA and each become effective in 2023. Similar laws are being considered in several other states, as well as at the federal and local

levels. Additionally, several states and localities have enacted measures related to the use of artificial intelligence and machine learning in

products and services. If we become subject to additional data privacy laws, the risk of enforcement action against us could increase.

Worldwide regulatory authorities are also considering and have approved various legislative proposals concerning data protection. The

European Union adopted the General Data Protection Regulation, or GDPR, and the United Kingdom similarly adopted the U.K. GDPR,

governing the strict handling of personal data of persons within the European Economic Area, or EEA, and the United Kingdom, respectively,

including its use and protection and the ability of persons whose data is stored to access, correct, and delete such data about themselves. If we

are found not to comply, we could be subject to penalties of up to €20 million or 4% of worldwide revenue, whichever is greater, and classes of

individuals or consumer protection organizations may initiate litigation related to our processing of their personal data. Furthermore, there exists

a proposed European regulation related to AI that, if adopted, could impose onerous obligations that may disproportionately impact and

disadvantage us and require us to change our business practices.

In the ordinary course of business, we may transfer personal data from Europe, China, and other jurisdictions to the United States or other

countries. Certain jurisdictions have enacted data localization laws and cross-border personal data transfer laws. For example, the GDPR

generally restricts the transfer of personal data to countries outside of the EEA. The European Commission released a set of “Standard

Contractual Clauses” designed for entities to validly transfer personal data out of the EEA to jurisdictions that the European Commission has not

found to provide an adequate level of protection, including the United States. While the European Union and United States governments have

recently announced an agreement in principle on a new bilateral cross-border transfer mechanism, it is uncertain whether this agreement will be

overturned in court like the previous two European Union-United States bilateral cross-border transfer agreements. These mechanisms are

subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the

United States. Other jurisdictions have enacted or are considering similar cross-border personal data transfer laws and local personal data

residency laws, any of which would increase the cost and complexity of doing business and could result in fines from regulators. For example,

China law imposes various requirements relating to data processing and data localization. Data broadly defined as important under China law,

including personal data, may not be transferable outside of China without prior assessment and approval by the Cyberspace Administration of

China, or CAC. Compliance with these requirements, including CAC assessments and any deemed failures of such assessments, could cause

us to incur liability, prevent us from using data collected in China, or impact our ability to transfer data outside of China. The inability to import

personal data to the United States could significantly and negatively impact our business operations, limit our ability to collaborate with parties

that are subject to European, China, and other data privacy and security laws, or require us to increase our personal data processing capabilities

in Europe and/or elsewhere at significant expense. Some European regulators have prevented companies from transferring personal data out of

Europe for allegedly violating the GDPR’s cross-border data transfer limitations, which could negatively impact our business.

We may also be bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be

successful or may be claimed to be non-compliant. For example,

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certain privacy laws, such as the GDPR and the CCPA, require our customers to impose specific contractual restrictions on their service

providers. We sometimes host personal data in collaboration with our customers, and if a breach exposed or altered that personal data, it could

harm those customer relationships and subject us to litigation, regulatory action, or fines. We may publish privacy policies, marketing materials

and other statements, such as compliance with certain certifications or self-regulatory principles, regarding data privacy and security. If these

policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we

may be subject to investigation, enforcement actions by regulators or other adverse consequences.

Data protection laws around the world are quickly changing and may be interpreted and applied in an increasingly stringent fashion and in a

manner that is inconsistent with our data practices. These obligations may necessitate changes to our information technologies, systems, and

practices and to those of any third parties that process personal data on our behalf. Despite our efforts, we or third parties upon whom we rely

may fail to comply with such obligations. If we fail, or are perceived to have failed, to address or comply with data privacy and security

obligations, we could face significant consequences, including but not limited to, government enforcement actions, litigation, additional reporting

requirements and/or oversight, bans on processing personal data and orders to destroy or not use personal data. Any of these events could

have a material adverse effect on our reputation, business, or financial condition.

We have exposure to additional tax liabilities and our operating results may be adversely impacted by higher than expected tax rates

and other tax-related factors.

We are subject to complex income tax laws and regulations, as well as non-income-based taxes, in various jurisdictions. Significant judgment is

required in determining our worldwide provision for income taxes and other tax liabilities. We are regularly under audit by tax authorities in

different jurisdictions. For example, we are currently under examination by the Internal Revenue Service for our fiscal years 2018 and 2019 and

undergoing tax audits in Germany, Israel and India. Although we believe our tax estimates are reasonable, any adverse outcome could increase

our worldwide effective tax rate, increase the amount of non-income taxes imposed on our business, and harm our financial position, results of

operations, net income, and cash flows.

Further, changes in tax laws may materially impact our results of operations, or the way we conduct our business. These include changes to

U.S. tax laws and regulations, such as the Inflation Reduction Act, which implements a 15% minimum tax on book income and a 1% excise tax

on net stock repurchases and parts of which became effective for us in fiscal year 2023. It is possible that these changes, or other tax law

changes, could increase our future tax liability or cause other adverse impacts. Most of our income is taxable in the United States, with a

significant portion qualifying for preferential treatment as foreign-derived intangible income, or FDII. If U.S. tax rates increase or the FDII

deduction is reduced, our provision for income taxes, results of operations, net income and cash flows would be adversely affected. In addition,

changes in the tax laws of foreign jurisdictions could arise as a result of the base erosion and profit shifting project undertaken by the

Organization for Economic Co-operation and Development, or OECD. The OECD recommended changes to long-standing tax principles and

continues to develop new proposals, including allocating greater taxing rights to countries where customers are located and establishing a

minimum tax on global income. These changes, as adopted by countries, may increase tax uncertainty and adversely affect our provision for

income taxes, results of operations and financial condition.

Our future effective tax rate may also be affected by a variety of factors, including changes in our business or statutory rates, the mix of earnings

in countries with differing statutory tax rates, available tax incentives, credits and deductions, the expiration of statute of limitations and

settlements of tax audits, changes in accounting principles, adjustments to income taxes upon finalization of tax returns, increases in expenses

not deductible for tax purposes, the valuation of our deferred tax assets and liabilities and deferred tax valuation allowances, changing

interpretation of existing laws or regulations, the impact of accounting for business combinations, as well as changes in the domestic or

international organization of our business and structure. Furthermore, the tax effects of accounting for stock-based compensation and volatility in

our stock price may significantly impact our effective tax rate in the period in which they occur. A decline in our stock price may result in reduced

future tax benefits from stock-based compensation, increase our effective tax rate, and adversely affect our financial results.

Our business is exposed to the risks associated with litigation, investigations and regulatory proceedings.

We currently and will likely continue to face legal, administrative and regulatory proceedings, claims, demands and/or investigations involving

shareholder, consumer, competition and/or other issues relating to

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our business. For example, we are defending on appeal the dismissal of a securities class action lawsuit from multiple shareholders asserting

claims that we and certain of our officers made false and/or misleading statements related to channel inventory and the impact of cryptocurrency

mining on GPU demand in 2017 and 2018. Litigation and regulatory proceedings are inherently uncertain, and adverse rulings could occur,

including monetary damages or fines, or an injunction stopping us from manufacturing or selling certain products, engaging in certain business

practices, or requiring other remedies, such as compulsory licensing of patents. An unfavorable outcome or settlement may result in a material

adverse impact. Regardless of the outcome, litigation can be costly, time-consuming, and disruptive to our operations.

Our indebtedness could adversely affect our financial position and cash flows from operations, and prevent us from implementing our

strategy or fulfilling our contractual obligations.

As of January 29, 2023, we had outstanding a total of $11 billion in notes due by 2060. As each series of senior notes matures, unless redeemed

or repurchased, we must repay or refinance the notes. If we decide to refinance, we may receive less favorable terms, or we may be unable to

refinance at all, which may adversely affect our financial condition. We also have a $575 million commercial paper program.

Maintenance of our current and future indebtedness and contractual restrictions could cause us to dedicate a substantial portion of our cash

flows from operations towards debt service obligations and principal repayments; increase our vulnerability to adverse changes in general

economic, industry and competitive conditions; limit our flexibility regarding changes in our business and our industry; impair our ability to obtain

future financing; and restrict our ability to grant liens on property, enter into certain mergers, dispose of our assets, or materially change our

business.

Our ability to comply with the covenants in our indenture may be affected by events beyond our control. If we breach any of the covenants

without a waiver from the note holders or lenders, then any outstanding indebtedness may be declared immediately due and payable. Changes

to our credit rating may negatively impact the value and liquidity of our securities, restrict our ability to obtain future financing and affect the terms

of any such financing.

Delaware law and our certificate of incorporation, bylaws and agreement with Microsoft could delay or prevent a change in control.

The anti-takeover provisions of the Delaware General Corporation Law may discourage, delay, or prevent a change in control. Provisions in our

certificate of incorporation and bylaws could make it more difficult for a third party to acquire a majority of our outstanding stock. These

provisions include the ability of our Board of Directors to create and issue preferred stock, change the number of directors, and to make, amend

or repeal our bylaws without prior shareholder approval; the inability of our shareholders to act by written consent or call special meetings;

advance notice requirements for director nominations and shareholder proposals; and a super-majority voting requirement to amend some

provisions in our certificate of incorporation and bylaws. Under our agreement with Microsoft for the Xbox, if someone makes an offer to

purchase at least 30% of our outstanding common stock, Microsoft may have first and last rights of refusal to purchase the stock. These

provisions could delay or prevent a change in control of NVIDIA, discourage proxy contests, and make it more difficult for shareholders to elect

directors of their choosing and to cause us to take other corporate actions they desire.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

Our headquarters is in Santa Clara, California. We own and lease approximately 3 million square feet of office and building space for our

corporate headquarters. In addition, we lease data center space in Santa Clara, California. We also own and lease facilities for data centers,

research and development, and/or sales and administrative purposes throughout the U.S. and in various international locations, primarily in

China, India, Israel, and Taiwan. We believe our existing facilities, both owned and leased, are in good condition and suitable for the conduct of

our business. We do not identify or allocate assets by operating segment. For additional information regarding obligations under leases, refer to

Note 3 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K, which information is hereby

incorporated by reference.

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ITEM 3. LEGAL PROCEEDINGS

Please see Note 13 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K for a

discussion of our legal proceedings.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER

PURCHASES OF EQUITY SECURITIES

Our common stock is traded on the Nasdaq Global Select Market under the symbol NVDA. Public trading of our common stock began on

January 22, 1999. Prior to that, there was no public market for our common stock. As of February 17, 2023, we had approximately 344

registered shareholders, not including those shares held in street or nominee name.

Issuer Purchases of Equity Securities

On May 23, 2022, our Board of Directors increased and extended our share repurchase program to repurchase additional common stock up to a

total of $15 billion through December 2023. Since the inception of our share repurchase program, we have repurchased an aggregate of 1.10

billion shares for a total cost of $17.12 billion through January 29, 2023. During fiscal year 2023, we repurchased 63 million shares for

$10.04 billion. As of January 29, 2023, we are authorized, subject to certain specifications, to repurchase shares of our common stock up to

$7.23 billion through December 2023.

The repurchases can be made in the open market, in privately negotiated transactions, pursuant to a Rule 10b5-1 trading plan or in structured

share repurchase programs, and can be made in one or more larger repurchases, in compliance with Rule 10b-18 of the Exchange Act, subject

to market conditions, applicable legal requirements, and other factors. The program does not obligate NVIDIA to acquire any particular amount of

common stock and the program may be suspended at any time at our discretion.

In fiscal year 2023, we paid $398 million in quarterly cash dividends. Our cash dividend program and the payment of future cash dividends under

that program are subject to our Board of Directors' continuing determination that the dividend program and the declaration of dividends

thereunder are in the best interests of our shareholders.

The following table presents details of our share repurchase transactions during the fourth quarter of fiscal year 2023:

Period

Total Number

of Shares

Purchased

(In millions)

Average Price

Paid per Share

Total Number of

Shares Purchased as

Part of Publicly

Announced Program

(In millions)

Approximate Dollar

Value of Shares that

May Yet Be Purchased

Under the Program (In

billions)

October 31, 2022 - November 27, 2022 7 $ 148.11 7 $ 7.23

November 28, 2022 - December 25, 2022 — $ — — $ 7.23

December 26, 2022 - January 29, 2023

—

$ —

—

$ 7.23

Total

7 7

Restricted Stock Unit Share Withholding

We withhold common stock shares associated with net share settlements to cover tax withholding obligations upon the vesting of restricted stock

unit awards under our employee equity incentive program. During fiscal year 2023, we withheld approximately 8 million shares for a total value of

$1.48 billion

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through net share settlements. Refer to Note 4 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on

Form 10-K for further discussion regarding our equity incentive plans.

Stock Performance Graphs

The following graph compares the cumulative total shareholder return for our common stock, the S&P 500 Index, and the Nasdaq 100 Index for

the five years ended January 29, 2023. The graph assumes that $100 was invested on January 28, 2018 in our common stock and in each of

the S&P 500 Index and the Nasdaq 100 Index. Our common stock is a component of each of the presented indices. Total return assumes

reinvestment of dividends in each of the indices indicated. Total return is based on historical results and is not intended to indicate future

performance.

*$100 invested on 1/28/18 in stock and in indices, including reinvestment of dividends.

Source: FactSet financial data and analytics.

1/28/2018 1/27/2019 1/26/2020 1/31/2021 1/30/2022 1/29/2023

NVIDIA Corporation $ 100.00 $ 66.00 $ 103.63 $ 215.33 $ 378.94 $ 338.18

S&P 500 $ 100.00 $ 94.60 $ 119.36 $ 137.01 $ 165.79 $ 154.80

Nasdaq 100 $ 100.00 $ 97.69 $ 133.01 $ 189.72 $ 213.63 $ 181.38

ITEM 6. [RESERVED]

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Item 1A. Risk

Factors”, our Consolidated Financial Statements and related Notes thereto, as well as other cautionary statements and risks described

elsewhere in this Annual Report on Form 10-K, before deciding to purchase, hold or sell shares of our common stock.

Overview

Our Company and Our Businesses

NVIDIA pioneered accelerated computing to help solve the most challenging computational problems. Since our original focus on PC graphics,

we have expanded to several other large and important computationally intensive fields. Fueled by the sustained demand for exceptional 3D

graphics and the scale of the gaming market, NVIDIA has leveraged its GPU architecture to create platforms for scientific computing, AI, data

science, AV, robotics, metaverse and 3D internet applications.

Our two operating segments are "Compute & Networking" and "Graphics." Refer to Note 17 of the Notes to the Consolidated Financial

Statements in Part IV, Item 15 of this Annual Report on Form 10-K for additional information.

Headquartered in Santa Clara, California, NVIDIA was incorporated in California in April 1993 and reincorporated in Delaware in April 1998.

Recent Developments, Future Objectives and Challenges

Supply, Products Transitions, and New Products and Business Models

Our supply, which includes inventory on hand, purchase obligations and prepaid supply agreements, has grown significantly due to current

supply chain conditions, complexity of our products, and recent reductions in demand. At the end of fiscal year 2023, purchase obligations and

prepaid supply agreements represented more than half of our total supply. Inventory provisions for excess inventory and purchase obligations

totaled $2.17 billion in fiscal year 2023. We may incur inventory provisions if our inventory or supply commitments are misaligned with demand

for our products.

Product transitions are complex as we often ship both new and legacy architecture products simultaneously and we and our channel partners

prepare to ship and support new products. We are currently transitioning the architecture of our Data Center, Professional Visualization, and

Gaming products. Qualification time for new products, customers anticipating product transitions and channel partners reducing channel

inventory of legacy architectures ahead of new product introductions can create reductions or volatility in our revenue. While we have managed

prior product transitions and have previously sold multiple product architectures at the same time, these transitions are difficult and prior trends

may not continue.

We build technology and products for use cases and applications that may be new or may not yet exist. Examples include our Omniverse

platform and third-party large language models and generative models. Our demand estimates for these use cases and applications can be

incorrect and create volatility in our revenue or supply levels, and we may not be able to generate any revenue from these use cases and

applications.

NVIDIA AI Cloud Service Offerings

We will offer enterprise customers NVIDIA AI cloud services directly and through our network of partners. Examples of these services include

NVIDIA DGX Cloud, which is cloud-based infrastructure and software for training AI models, and customizable pretrained AI models. NVIDIA has

partnered with leading cloud service providers to host these services in their data centers.

We entered into multi-year cloud service agreements in the second half of fiscal year 2023 to these offerings and our research and development

activities. NVIDIA AI cloud services may not be successful and will take time, resources and investment. We also offer or plan to offer standalone

software solutions for AI including NVIDIA AI Enterprise, NVIDIA Omniverse, NVIDIA DRIVE for automotive, and several other software solutions.

These new business models or strategies may not be successful and we may fail to sell any meaningful standalone software or as-a-service

solutions. We may incur significant costs and may not achieve any significant revenue from these offerings.

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Global Trade

During the third quarter of fiscal year 2023, the USG announced new license requirements that, with certain exceptions, impact exports to China

(including Hong Kong and Macau) and Russia of our A100 and H100 integrated circuits, DGX or any other systems or boards which incorporate

A100 or H100 integrated circuits and our A100X. We are required to transition certain operations out of China (including Hong Kong), including

research and development and supply and distribution operations. We have engaged with customers in China to provide alternative products not

subject to the new license requirements, such as our new A800 offering.

Management of these new license and other requirements is complicated and time consuming. Our results and competitive position may be

harmed if customers in China do not want to purchase our alternative product offerings, if customers purchase product from competitors, or if

customers develop their own internal solution, if the USG does not grant licenses in a timely manner or denies licenses to significant customers,

or if we incur significant transition costs.

COVID-19

During fiscal year 2023, we reopened our offices worldwide. We incurred incremental expenses and related in-office costs as we ramped onsite

services.

Restrictions may be imposed or reinstated as the pandemic resurfaces, such as lockdown measures due to COVID-19 containment efforts in

China. During fiscal year 2023, end customer sales for our products in China have been negatively impacted by lockdowns and this impact may

continue if lockdowns return. COVID-19-related disruptions have created and may continue to create supply chain and logistics constraints.

Challenges in estimating demand could become more pronounced or volatile in the future on both a global and regional basis.

Russia

In fiscal year 2023, we stopped direct sales to Russia and later in the year, we closed business operations in Russia. Direct sales to Russia in

fiscal year 2022 were immaterial. Our revenue to partners that sell into Russia may have been negatively impacted due to the war in Ukraine.

Termination of the Arm Share Purchase Agreement

In February 2022, NVIDIA and SoftBank announced the termination of the Share Purchase Agreement whereby NVIDIA would have acquired

Arm from SoftBank due to significant regulatory challenges preventing the completion of the transaction. We recorded an acquisition termination

cost of $1.35 billion in fiscal year 2023 reflecting the write-off of the prepayment provided at signing.

Fiscal Year 2023 Summary

Year Ended

January 29,

2023

January 30,

2022 Change

($ in millions, except per share data)

Revenue $ 26,974 $ 26,914 — %

Gross margin 56.9 % 64.9 % Down 8.0 pts

Operating expenses $ 11,132 $ 7,434 Up 50%

Income from operations $ 4,224 $ 10,041 Down 58%

Net income $ 4,368 $ 9,752 Down 55%

Net income per diluted share $ 1.74 $ 3.85 Down 55%

We specialize in markets where our computing platforms can provide tremendous acceleration for 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: Data Center, Gaming, Professional Visualization, and Automotive.

Revenue for fiscal year 2023 revenue was $26.97 billion, flat compared with a year ago.

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Data Center revenue was up 41% from a year ago led by strong growth from hyperscale customers and also reflects purchases made by several

CSP partners to support multi-year cloud service agreements for our new NVIDIA AI cloud service offerings and our research and development

activities.

Gaming revenue was down 27% from a year ago reflecting lower sell-in to partners to help reduce channel inventory levels as global macro-

economic conditions and COVID-19 related disruptions in China weighed on gaming demand.

Professional Visualization revenue was down 27% from a year ago reflecting a lower sell-in to partners to help reduce channel inventory levels.

Automotive revenue was up 60% from a year ago reflecting growth in sales of self-driving solutions, computing solutions for electric vehicle

makers and strength in sales of AI cockpit solutions. The increase also included growth in automotive development arrangements.

OEM and Other revenue was down 61% from a year ago driven by notebook OEM and CMP. CMP revenue was nominal in fiscal year 2023 and

$550 million in fiscal year 2022.

Gross margin for fiscal year 2023 declined from a year ago, driven by $2.17 billion of inventory charges largely relating to excess supply of

NVIDIA Ampere architecture Gaming and Data Center products as compared to the demand expectations for these products, particularly for the

expected demand in China. The inventory charges were comprised of $1.04 billion for inventory on hand and $1.13 billion for inventory purchase

obligations in excess of our demand expectations.

Operating expenses, which included a $1.35 billion acquisition termination charge related to the Arm transaction, were up 50% from a year ago.

The increase also reflected compensation, data center infrastructure, and engineering development costs.

Cash, cash equivalents and marketable securities were $13.30 billion.

During fiscal year 2023, we returned $10.44 billion to shareholders in the form of share repurchases and cash dividends. As of the end of fiscal

year 2023, we had $7.23 billion remaining under our share repurchase authorization through December 2023.

Market Platform Highlights

Data Center revenue for fiscal year 2023 was $15.01 billion, up 41% from fiscal year 2022. The strong growth in Data Center revenue was

influenced by hyperscaler and cloud usage of our accelerated computing platforms and networking portfolio. In Data Center, we announced the

NVIDIA Hopper GPU architecture and began ramping the first products based on the architecture, including the NVIDIA H100 Tensor Core GPU.

The NVIDIA OVX server reference design launched for digital twins and other Omniverse applications. We completed two new large language

models for cloud AI services — NVIDIA NeMo LLM and NVIDIA BioNeMo LLM. Additionally, we announced the NVIDIA Spectrum-4 end-to-end

400Gbps networking platform and began shipping Quantum-2 in December 2022.

Gaming revenue for fiscal year 2023 was $9.07 billion, down 27% from fiscal year 2022. Gaming results were influenced by the rapid change in

economic conditions causing excess inventory with our channel partners. We introduced pricing programs for our channel partners and started

undershipping GPU supply to the partners so that we could lower inventory in the channel. As we exited fiscal year 2023, we have made

meaningful progress in establishing lower inventory levels with our channel partners. In Gaming, we announced the new Ada Lovelace GPU

architecture, and introduced the first products based on Ada, including the GeForce RTX 4090, RTX 4080, and RTX 4070 Ti desktop GPUs and

laptop GPUs featured in over 170 laptop designs. We introduced NVIDIA DLSS 3 for over 50 games and applications. We brought GeForce RTX

4080-class performance to the GeForce NOW Ultimate membership tier.

Professional Visualization revenue for fiscal year 2023 was $1.54 billion, down 27% from fiscal year 2022. Professional Visualization results

were influenced by the rapid change in economic conditions causing excess inventory with our OEM partners. In Professional Visualization, we

added new NVIDIA Ampere architecture RTX GPUs for workstations. We also announced Omniverse Avatar Cloud Engine and Omniverse Cloud

and released a major update to NVIDIA Omniverse Enterprise.

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Automotive revenue for fiscal year 2023 grew 60% compared to fiscal year 2022 to $903 million. In Automotive, we started production of the

NVIDIA DRIVE Orin autonomous vehicle SOC and introduced next-generation NVIDIA DRIVE Thor.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements,

which have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The preparation of

these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, cost of

revenue, expenses and related disclosure of contingencies. On an on-going basis, we evaluate our estimates, including those related to

inventories, revenue recognition, and income taxes. We base our estimates on historical experience and on various other assumptions that are

believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets

and liabilities.

We believe the following critical accounting policies affect our significant judgments and estimates used in the preparation of our consolidated

financial statements. Our management has discussed the development and selection of these critical accounting policies and estimates with the

Audit Committee of our Board of Directors. The Audit Committee has reviewed our disclosures relating to our critical accounting policies and

estimates in this Annual Report on Form 10-K.

Inventories

Inventory cost is computed on an adjusted standard basis, which approximates actual cost on an average or first-in, first-out basis. We charge

cost of sales for inventory provisions to write-down our inventory to the lower of cost or net realizable value or for obsolete or excess inventory,

and for excess product purchase commitments. Most of our inventory provisions relate to excess quantities of products or components, based

on our inventory levels and future product purchase commitments compared to assumptions about future demand and market conditions, which

requires management judgment.

Situations that may result in excess or obsolete inventory or excess product purchase commitments include changes in business and economic

conditions, changes in market conditions, sudden and significant decreases in demand for our products, inventory obsolescence because of

changing technology and customer requirements, new product introductions resulting in less demand for existing products or inconsistent spikes

in demand due to unexpected end use cases, failure to estimate customer demand properly, ordering in advance of historical lead-times and the

impact of changes in future demand, or increase in demand for competitive products, including competitive actions. Cancellation or deferral of

customer purchase orders could result in our holding excess inventory.

The overall net effect on our gross margin from inventory provisions and sales of items previously written down was an unfavorable impact of

7.5% in fiscal year 2023 and 0.9% in fiscal year 2022. As a fabless semiconductor company, we must make commitments to purchase inventory

based on forecasts of future customer demand. In doing so, we must account for our third-party manufacturers' lead times and constraints. In the

past, our manufacturing lead times have been long, and in some cases, extended beyond twelve months for some products. We place non-

cancellable inventory orders for certain product components in advance of our historical lead times, pay premiums and provide deposits to

secure future supply and capacity. We also adjust to other market factors, such as product offerings and pricing actions by our competitors, new

product transitions, and macroeconomic conditions - all of which may impact demand for our products.

Refer to the Gross Profit and Gross Margin discussion below in this Management's Discussion and Analysis for further discussion.

Revenue Recognition

We derive our revenue from product sales, including hardware and systems, license and development arrangements, software licensing, and

cloud services. We determine revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification

of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance

obligations in the contract (where revenue is allocated on a relative standalone selling

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price basis by maximizing the use of observable inputs to determine the standalone selling price for each performance obligation); and (5)

recognition of revenue when, or as, we satisfy a performance obligation.

Product Sales Revenue

Revenue from product sales is recognized upon transfer of control of products to customers in an amount that reflects the consideration we

expect to receive in exchange for those products. Certain products are sold with support or an extended warranty for the incorporated system,

hardware, and/or software. Support and extended warranty revenue are recognized ratably over the service period, or as services are

performed. Revenue is recognized net of allowances for returns, customer programs and any taxes collected from customers.

For products sold with a right of return, we record a reduction to revenue by establishing a sales return allowance for estimated product returns

at the time revenue is recognized, based primarily on historical return rates. However, if product returns for a fiscal period are anticipated to

exceed historical return rates, we may determine that additional sales return allowances are required to properly reflect our estimated exposure

for product returns.

Our customer programs involve rebates, which are designed to serve as sales incentives to resellers of our products in various target markets,

and marketing development funds, or MDFs, which represent monies paid to our partners that are earmarked for market segment development

and are designed to support our partners’ activities while also promoting NVIDIA products. We account for customer programs as a reduction to

revenue and accrue for potential rebates and MDFs based on the amount we expect to be claimed by customers.

License and Development Arrangements

Our license and development arrangements with customers typically require significant customization of our IP components. As a result, we

recognize the revenue from the license and the revenue from the development services as a single performance obligation over the period in

which the development services are performed. We measure progress to completion based on actual cost incurred to date as a percentage of

the estimated total cost required to complete each project. If a loss on an arrangement becomes probable during a period, we record a provision

for such loss in that period.

Refer to Note 1 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K for additional

information.

Income Taxes

We recognize federal, state and foreign current tax liabilities or assets based on our estimate of taxes payable or refundable in the current fiscal

year by tax jurisdiction. We recognize federal, state and foreign deferred tax assets or liabilities, as appropriate, for our estimate of future tax

effects attributable to temporary differences and carryforwards; and we record a valuation allowance to reduce any deferred tax assets by the

amount of any tax benefits that, based on available evidence and judgment, are not expected to be realized.

Our calculation of deferred tax assets and liabilities is based on certain estimates and judgments and involves dealing with uncertainties in the

application of complex tax laws. Our estimates of deferred tax assets and liabilities may change based, in part, on added certainty or finality to

an anticipated outcome, changes in accounting standards or tax laws in the United States, or foreign jurisdictions where we operate, or changes

in other facts or circumstances. In addition, we recognize liabilities for potential United States and foreign income tax contingencies based on our

estimate of whether, and the extent to which, additional taxes may be due. If we determine that payment of these amounts is unnecessary or if

the recorded tax liability is less than our current assessment, we may be required to recognize an income tax benefit or additional income tax

expense in our financial statements accordingly.

As of the end of fiscal years 2023 and 2022, we had a valuation allowance of $1.48 billion and $907 million, respectively, related to capital loss

carryforwards, state, and certain other deferred tax assets that management determined not likely to be realized due, in part, to jurisdictional

projections of future taxable income, including capital gains. To the extent realization of the deferred tax assets becomes more-likely-than-not,

we would recognize such deferred tax assets as income tax benefits during the period.

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We recognize the benefit from a tax position only if it is more-likely-than-not that the position would be sustained upon audit based solely on the

technical merits of the tax position. Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income

tax expense.

Refer to Note 14 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K for additional

information.

Change in Accounting Estimate

In February 2023, we completed an assessment of the useful lives of our property, plant, and equipment. Based on advances in technology and

usage rate, we increased the estimated useful life of a majority of the server, storage, and network equipment from three years to a range of four

to five years, and assembly and test equipment from five years to seven years. This change in accounting estimate became effective at the

beginning of fiscal year 2024. Based on the carrying amounts of a majority of our server, storage, network, and assembly and test equipment,

net in use as of the end of fiscal year 2023, it is estimated this change will increase our fiscal year 2024 operating income by $133 million as a

result of the reduction in depreciation expense.

Results of Operations

A discussion regarding our financial condition and results of operations for fiscal year 2023 compared to fiscal year 2022 is presented below. A

discussion regarding our financial condition and results of operations for fiscal year 2022 compared to fiscal year 2021 can be found under Item

7 in our Annual Report on Form 10-K for the fiscal year ended January 30, 2022, filed with the SEC on March 18, 2022, which is available free of

charge on the SEC’s website at http://www.sec.gov and at our investor relations website, http://investor.nvidia.com.

The following table sets forth, for the periods indicated, certain items in our Consolidated Statements of Income expressed as a percentage of

revenue.

Year Ended

January 29,

2023

January 30,

2022

Revenue 100.0 % 100.0 %

Cost of revenue

43.1 35.1

Gross profit 56.9 64.9

Operating expenses

Research and development 27.2 19.6

Sales, general and administrative 9.1 8.0

Acquisition termination cost 5.0 —

Total operating expenses

41.3 27.6

Income from operations 15.6 37.3

Interest income 1.0 0.1

Interest expense (1.0) (0.9)

Other, net

(0.1) 0.4

Other income (expense), net (0.1) (0.4)

Income before income tax 15.5 36.9

Income tax expense (benefit) (0.7) 0.7

Net income

16.2 % 36.2 %

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Revenue

Revenue by Reportable Segments

Year Ended

January 29,

2023

January 30,

2022

Change

($ in millions)

Compute & Networking $ 15,068 $ 11,046 $ 4,022 36 %

Graphics

11,906 15,868 (3,962)

(25)%

Total

$ 26,974 $ 26,914 $ 60

— %

Compute & Networking - The year-on-year increase was led by growth from hyperscale customers and also reflects purchases made by

several CSP partners to support multi-year cloud service agreements for our new NVIDIA AI cloud service offerings and our research and

development activities. The increase was also related to the growth in Automotive. CMP contributed an insignificant amount in fiscal year 2023

compared to $550 million in fiscal year 2022.

Graphics - The year-on-year decrease primarily reflects lower sell-in to partners to help reduce channel inventory levels as global macro-

economic conditions and COVID-19 related disruptions in China weighed on gaming demand.

Concentration of Revenue

Revenue from sales to customers outside of the United States accounted for 69% and 84% of total revenue for fiscal years 2023 and 2022,

respectively. The decline in revenue outside the U.S. was primarily driven by China and Taiwan related to Data Center and Gaming. Revenue by

geographic region is allocated to countries based on the billed location even if the revenue may be attributable to end customers in a different

location.

No customer represented 10% or more of total revenue for fiscal years 2023 and 2022.

Gross Profit and Gross Margin

Gross profit consists of total revenue, net of allowances, less cost of revenue. Cost of revenue consists primarily of the cost of semiconductors,

including wafer fabrication, assembly, testing and packaging, board and device costs, manufacturing support costs, including labor and overhead

associated with such purchases, final test yield fallout, inventory and warranty provisions, memory and component costs, tariffs, and shipping

costs. Cost of revenue also includes acquisition-related costs, development costs for license and service arrangements, IP-related costs, and

stock-based compensation related to personnel associated with manufacturing operations.

Gross margin was 56.9% and 64.9% for fiscal years 2023 and 2022, respectively. The decrease in fiscal year 2023 was primarily due to $2.17

billion of inventory provisions in fiscal year 2023, which consists of approximately $1.04 billion for inventory on hand and approximately $1.13

billion for inventory purchase obligations in excess of our current demand projections.

Inventory provisions totaled $2.17 billion and $354 million for fiscal years 2023 and 2022, respectively. Sales of inventory that was previously

written-off totaled $137 million and $111 million for fiscal years 2023 and 2022, respectively. As a result, the overall net effect on our gross

margin was an unfavorable impact of 7.5% and 0.9% in fiscal years 2023 and 2022, respectively.

Compute & Networking - The gross margin of our Compute & Networking segment decreased during fiscal year 2023 when compared to fiscal

year 2022, primarily due to inventory provisions.

Graphics - The gross margin of our Graphics segment decreased during fiscal year 2023 when compared to fiscal year 2022, primarily due to

inventory and related provisions and lower margins of GeForce GPUs.

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Operating Expenses

Year Ended

January 29,

2023

January 30,

2022

Change

($ in millions)

Research and development expenses $ 7,339 $ 5,268 $ 2,071 39 %

% of revenue 27.2 % 19.6 %

Sales, general and administrative expenses 2,440 2,166 274 13 %

% of revenue 9.1 % 8.0 %

Acquisition termination cost 1,353 — 1,353 100 %

% of revenue

5.0 % — %

Total operating expenses

$ 11,132 $ 7,434 $ 3,698

50 %

% of revenue 41.3 % 27.6 %

The increase in research and development expense for fiscal year 2023 was primarily driven by increased compensation, employee growth,

engineering development costs, and data center infrastructure.

The increase in sales, general and administrative expense for fiscal year 2023 was primarily driven by increased compensation and employee

growth.

We recorded an acquisition termination cost related to the Arm transaction of $1.35 billion in fiscal year 2023 reflecting the write-off of the

prepayment provided at signing.

Other Income (Expense), Net

Year Ended

January 29,

2023

January 30,

2022

Change

($ in millions)

Interest income $ 267 $ 29 $ 238 821 %

Interest expense (262) (236) (26) 11 %

Other, net

(48) 107 (155)

(145)%

Other income (expense), net

$ (43) $ (100) $ 57

(57)%

Interest income consists of interest earned on cash, cash equivalents and marketable securities. The increase in interest income was primarily

due to higher yields earned on our investments.

Interest expense is primarily comprised of coupon interest and debt discount amortization related to our notes. The increase in expense reflects

interest on the $5.00 billion debt offering issued in June 2021.

Other, net, consists primarily of realized or unrealized gains and losses from investments in non-affiliated entities and the impact of changes in

foreign currency rates. Change in other, net, compared to fiscal year 2022 was primarily driven by mark-to-market losses from publicly traded

equity investments and changes in value from our non-affiliated private investments. Refer to Note 8 of the Notes to the Consolidated Financial

Statements in Part IV, Item 15 of this Annual Report on Form 10-K for additional information regarding our investments in non-affiliated entities.

Income Taxes

We recognized income tax benefit of $187 million for fiscal year 2023 and income tax expense of $189 million for fiscal year 2022. Income tax as

a percentage of income before income tax was a benefit of 4.5% for fiscal year 2023 and an expense of 1.9% for fiscal year 2022.

Beginning in fiscal year 2023, the 2017 Tax Cuts and Jobs Act, or TCJA, requires taxpayers to capitalize research and development

expenditures and to amortize domestic expenditures over five years and foreign expenditures over fifteen years.

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The fiscal year 2023 effective tax rate includes the mandatory capitalization and amortization of research and development expenses beginning

in fiscal year 2023, which resulted in a greater FDII deduction and significantly increased current taxes, with a corresponding deferred tax benefit

at the relevant statutory tax rate.

The decrease in our effective tax rate in fiscal year 2023 as compared to fiscal year 2022 was primarily due to increased tax benefits of the FDII

deduction, stock-based compensation, and the U.S. federal research tax credit, relative to lower profitability. This is partially offset by the impact

of an increase in the proportion of earnings subject to U.S. tax in fiscal year 2023 and the one-time benefits of the domestication of a foreign

subsidiary in fiscal year 2022, or the Domestication.

Our effective tax rate for fiscal year 2023 was lower than the U.S. federal statutory rate of 21% due primarily to tax benefits from the FDII

deduction, tax benefits related to stock-based compensation and the U.S. federal research tax credit.

Our effective tax rate for fiscal year 2022 was lower than the U.S. federal statutory rate of 21% due to tax benefits from the FDII deduction,

income earned in jurisdictions that are subject to taxes lower than the U.S. federal statutory tax rate, excess tax benefits related to stock-based

compensation, recognition of U.S. federal research tax credit and the one-time benefits of the Domestication.

Refer to Note 14 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K for additional

information.

Liquidity and Capital Resources

January 29,

2023

January 30,

2022

(In millions)

Cash and cash equivalents $ 3,389 $ 1,990

Marketable securities

9,907 19,218

Cash, cash equivalents, and marketable securities

$ 13,296 $ 21,208

Year Ended

January 29,

2023

January 30,

2022

(In millions)

Net cash provided by operating activities $ 5,641 $ 9,108

Net cash provided by (used in) investing activities $ 7,375 $ (9,830)

Net cash provided by (used in) financing activities $ (11,617) $ 1,865

As of January 29, 2023, we had $13.30 billion in cash, cash equivalents and marketable securities, a decrease of $7.91 billion from the end of

fiscal year 2022. Our investment policy requires the purchase of highly rated fixed income securities, the diversification of investment types and

credit exposures, and certain maturity limits on our portfolio.

Cash provided by operating activities decreased in fiscal year 2023 compared to fiscal year 2022, primarily due to a decrease in net income

adjusted for certain non-cash items, such as the Arm acquisition termination cost of $1.35 billion, and higher tax payments, partially offset by

changes in working capital. Changes in working capital were primarily driven by lower accounts receivable due to strong collections partially

offset by timing of supplier payments and inventory deliveries.

Cash provided by investing activities increased in fiscal year 2023 compared to fiscal year 2022, primarily driven by lower purchases and higher

sales and maturities of marketable securities, offset by higher capital expenditures.

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Cash used in financing activities increased in fiscal year 2023 compared to fiscal year 2022, due to share repurchases and the absence of debt

issuance proceeds in fiscal year 2023, offset by absence of debt repayment.

Liquidity

Our primary sources of liquidity are our cash and cash equivalents, our marketable securities, and cash generated by our operations. At the end

of fiscal year 2023, we had $13.30 billion in cash, cash equivalents and marketable securities. We believe that we have sufficient liquidity to

meet our operating requirements for at least the next twelve months, and for the foreseeable future, including our future supply obligations and

$1.25 billion of debt repayment due in fiscal year 2024. We continuously evaluate our liquidity and capital resources, including our access to

external capital, to ensure we can finance future capital requirements.

Our marketable securities consist of debt securities issued by the U.S. government and its agencies, highly rated corporations and financial

institutions, and foreign government entities, as well as certificates of deposit issued by highly rated financial institutions. These marketable

securities are primarily denominated in U.S. dollars. Refer to Note 8 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of

this Annual Report on Form 10-K for additional information.

During fiscal year 2024, we expect to use our existing cash and cash equivalents, our marketable securities, and the cash generated by our

operations to fund our capital investments of approximately $1.10 billion to $1.30 billion related to property and equipment.

Except for approximately $1.38 billion of cash, cash equivalents, and marketable securities held outside the U.S. for which we have not accrued

any related foreign or state taxes if we repatriate these amounts to the U.S., substantially all of our cash, cash equivalents and marketable

securities held outside of the U.S. at the end of fiscal year 2023 are available for use in the U.S. without incurring additional U.S. federal income

taxes.

Beginning in fiscal year 2023, the TCJA requires taxpayers to capitalize research and development expenditures and to amortize domestic

expenditures over five years and foreign expenditures over fifteen years. The adverse cash flow impact of mandatory capitalization will be

reduced in future years as capitalized research and development expenditures continue to amortize. Refer to Note 14 of the Notes to the

Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K for additional information.

Capital Return to Shareholders

During fiscal year 2023, we returned $10.04 billion in share repurchases and $398 million in quarterly cash dividends. Our cash dividend

program and the payment of future cash dividends under that program are subject to our Board of Directors' continuing determination that the

dividend program and the declaration of dividends thereunder are in the best interests of our shareholders.

As of January 29, 2023, we were authorized, subject to certain specifications, to repurchase additional shares of our common stock up to $7.23

billion through December 2023.

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Outstanding Indebtedness and Commercial Paper Program

Our aggregate debt maturities as of January 29, 2023, by year payable, are as follows:

January 29,

2023

(In millions)

Due in one year $ 1,250

Due in one to five years 2,250

Due in five to ten years 4,000

Due in greater than ten years 3,500

Unamortized debt discount and issuance costs (47)

Net carrying amount 10,953

Less short-term portion (1,250)

Total long-term portion

$ 9,703

We have a $575 million commercial paper program to support general corporate purposes. As of the end of fiscal year 2023, we had not issued

any commercial paper.

Refer to Note 12 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K for further

discussion.

Material Cash Requirements and Other Obligations

For a description of our long-term debt, purchase obligations, and operating lease obligations, refer to Note 12, Note 13, and Note 3 of the Notes

to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K, respectively.

We have unrecognized tax benefits of $1.02 billion, which includes related interest and penalties of $95 million, recorded in non-current income

tax payable at the end of fiscal year 2023. We are unable to reasonably estimate the timing of any potential tax liability, interest payments, or

penalties in individual years due to uncertainties in the underlying income tax positions and the timing of the effective settlement of such tax

positions. We are currently under examination by the Internal Revenue Service for our fiscal years 2018 and 2019. Refer to Note 14 of the Notes

to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K for further information.

Climate Change

To date, there has been no material impact to our results of operations associated with global sustainability regulations, compliance, costs from

sourcing renewable energy or climate-related business trends.

Adoption of New and Recently Issued Accounting Pronouncements

Refer to Note 1 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K for a discussion of

adoption of new and recently issued accounting pronouncements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Investment and Interest Rate Risk

We are exposed to interest rate risk related to our fixed-rate investment portfolio and outstanding debt. The investment portfolio is managed

consistent with our overall liquidity strategy in support of both working capital needs and strategic growth of our businesses.

As of the end of fiscal year 2023, we performed a sensitivity analysis on our investment portfolio. According to our analysis, parallel shifts in the

yield curve of both plus or minus 0.5% would result in changes in fair values for these investments of $17 million.

As of the end of fiscal year 2023, we had $11.00 billion of senior Notes outstanding. We carry the Notes at face value less unamortized discount

on our Consolidated Balance Sheets. As the Notes bear interest at a fixed rate, we have no financial statement risk associated with changes in

interest rates. Refer to Note 12 of

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the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K for additional information.

Foreign Exchange Rate Risk

We consider our direct exposure to foreign exchange rate fluctuations to be minimal as our sales are in United States dollars and foreign

currency forward contracts are used to offset movements of foreign currency exchange rate movements. Gains or losses from foreign currency

remeasurement are included in other income or expense. The impact of foreign currency transaction gain or loss included in determining net

income was not significant for fiscal years 2023 and 2022.

Sales and arrangements with third-party manufacturers provide for pricing and payment in United States dollars, and, therefore, are not subject

to exchange rate fluctuations. Increases in the value of the United States’ dollar relative to other currencies would make our products more

expensive, which could negatively impact our ability to compete. Conversely, decreases in the value of the United States’ dollar relative to other

currencies could result in our suppliers raising their prices in order to continue doing business with us. Additionally, we have international

operations and incur expenditures in currencies other than U.S. dollars. Our operating expenses benefit from a stronger dollar and are adversely

affected by a weaker dollar. The primary currency we hedge is Israeli Shekel.

We use foreign currency forward contracts to mitigate the impact of foreign currency exchange rate movements on our operating expenses. We

designate these contracts as cash flow hedges and assess the effectiveness of the hedge relationships on a spot to spot basis. Gains or losses

on the contracts are recorded in accumulated other comprehensive income or loss, and then reclassified to operating expense when the related

operating expenses are recognized in earnings or ineffectiveness should occur.

We also use foreign currency forward contracts to mitigate the impact of foreign currency movements on monetary assets and liabilities that are

denominated in currencies other than U.S. dollar. These forward contracts were not designated for hedge accounting treatment. Therefore, the

change in fair value of these contracts is recorded in other income or expense and offsets the change in fair value of the hedged foreign

currency denominated monetary assets and liabilities, which is also recorded in other income or expense.

If the U.S. dollar strengthened by 10% as of January 29, 2023 and January 30, 2022, the amount recorded in accumulated other comprehensive

income (loss) related to our foreign exchange contracts before tax effect would have been approximately $112 million and $103 million lower,

respectively. Change in value recorded in accumulated other comprehensive income (loss) would be expected to offset a corresponding change

in hedged forecasted foreign currency expenses when recognized.

If an adverse 10% foreign exchange rate change was applied to our balance sheet hedging contracts, it would have resulted in an adverse

impact on income before taxes of approximately $36 million and $41 million as of January 29, 2023 and January 30, 2022, respectively. These

changes in fair values would be offset in other income (expense), net by corresponding change in fair values of the foreign currency

denominated monetary assets and liabilities, assuming the hedge contracts fully cover the foreign currency denominated monetary assets and

liabilities balances.

Refer to Note 11 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K for additional

information.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this Item is set forth in our Consolidated Financial Statements and Notes thereto included in this Annual Report on

Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

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ITEM 9A. CONTROLS AND PROCEDURES

Controls and Procedures

Disclosure Controls and Procedures

Based on their evaluation as of January 29, 2023, our management, including our Chief Executive Officer and Chief Financial Officer, has

concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective to provide

reasonable assurance.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in

Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and

Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of January 29, 2023

based on the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the

Treadway Commission. Based on our evaluation under the criteria set forth in Internal Control — Integrated Framework, our management

concluded that our internal control over financial reporting was effective as of January 29, 2023.

The effectiveness of our internal control over financial reporting as of January 29, 2023 has been audited by PricewaterhouseCoopers LLP, an

independent registered public accounting firm, as stated in its report which is included herein.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended January 29, 2023 that have materially

affected, or are reasonably likely to materially affect, our internal control over financial reporting. In fiscal year 2022, we began an upgrade of our

enterprise resource planning, or ERP, system, which will update much of our existing core financial systems. The ERP system is designed to

accurately maintain our financial records used to report operating results. The upgrade will occur in phases. During the second quarter of fiscal

year 2023, we completed the consolidated financial reporting phase of the implementation, which included updating our internal control over

financial reporting. We will continue to evaluate each quarter whether there are changes that materially affect our internal control over financial

reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures

or our internal controls, will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only

reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the

fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations

in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within

NVIDIA have been detected.

ITEM 9B. OTHER INFORMATION

None.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not Applicable.

PART III

Certain information required by Part III is omitted from this report because we will file with the SEC a definitive proxy statement pursuant to

Regulation 14A, or the 2023 Proxy Statement, no later than 120 days after the end of fiscal year 2023, and certain information included therein is

incorporated herein by reference.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Identification of Directors

Information regarding directors required by this item will be contained in our 2023 Proxy Statement under the caption “Proposal 1 - Election of

Directors,” and is hereby incorporated by reference.

Identification of Executive Officers

Reference is made to the information regarding executive officers appearing under the heading “Information About Our Executive Officers” in

Part I of this Annual Report on Form 10-K, which information is hereby incorporated by reference.

Identification of Audit Committee and Financial Experts

Information regarding our Audit Committee required by this item will be contained in our 2023 Proxy Statement under the captions “Report of the

Audit Committee of the Board of Directors” and “Information About the Board of Directors and Corporate Governance,” and is hereby

incorporated by reference.

Material Changes to Procedures for Recommending Directors

Information regarding procedures for recommending directors required by this item will be contained in our 2023 Proxy Statement under the

caption “Information About the Board of Directors and Corporate Governance,” and is hereby incorporated by reference.

Delinquent Section 16(a) Reports

Information regarding compliance with Section 16(a) of the Exchange Act required by this item will be contained in our 2023 Proxy Statement

under the caption “Delinquent Section 16(a) Reports,” and is hereby incorporated by reference.

Code of Conduct

Information regarding our Code of Conduct required by this item will be contained in our 2023 Proxy Statement under the caption “Information

About the Board of Directors and Corporate Governance - Code of Conduct,” and is hereby incorporated by reference. The full text of our Code

of Conduct and Financial Team Code of Conduct are published on the Investor Relations portion of our website, under Governance, at

www.nvidia.com. If we make any amendments to either code, or grant any waiver from a provision of either code to any executive officer or

director, we will promptly disclose the nature of the amendment or waiver on our website or in a report on Form 8-K. The contents of our website

are not a part of this Annual Report on Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

Information regarding our executive compensation required by this item will be contained in our 2023 Proxy Statement under the captions

“Executive Compensation”, “Compensation Committee Interlocks and Insider Participation”, “Director Compensation” and “Compensation

Committee Report,” and is hereby incorporated by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED

STOCKHOLDER MATTERS

Ownership of NVIDIA Securities

Information regarding ownership of NVIDIA securities required by this item will be contained in our 2023 Proxy Statement under the caption

“Security Ownership of Certain Beneficial Owners and Management,” and is hereby incorporated by reference.

Equity Compensation Plan Information

Information regarding our equity compensation plans required by this item will be contained in our 2023 Proxy Statement under the caption

"Equity Compensation Plan Information," and is hereby incorporated by reference.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information regarding related transactions and director independence required by this item will be contained in our 2023 Proxy Statement under

the captions “Review of Transactions with Related Persons” and “Information About the Board of Directors and Corporate Governance

- Independence of the Members of the Board of Directors,” and is hereby incorporated by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information regarding accounting fees and services required by this item will be contained in our 2023 Proxy Statement under the caption “Fees

Billed by the Independent Registered Public Accounting Firm,” and is hereby incorporated by reference.

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PART IV
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
    Page
(a) 1. Financial Statements  
  Report of Independent Registered Public Accounting Firm (PCAOB ID: 238) 52
  Consolidated Statements of Income for the years ended January 29, 2023, January 30, 2022, and January 31, 2021 54
Consolidated Statements of Comprehensive Income for the  years  ended  January  29,  2023,  January 30, 2022, and
January 31, 2021 55
  Consolidated Balance Sheets as of January 29, 2023 and January 30, 2022 56
 
Consolidated Statements of Shareholders’ Equity for the years ended January 29, 2023, January 30, 2022, and
January 31, 2021 57
 
Consolidated Statements of Cash Flows for the years ended January 29, 2023, January 30, 2022, and January 31,
2021 58
  Notes to the Consolidated Financial Statements 59
2. Financial Statement Schedule  
 
Schedule II Valuation and Qualifying Accounts for the years ended January 29, 2023, January 30, 2022, and January
31, 2021 87
3. Exhibits  
 
The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as a part of this Annual
Report on Form 10-K. 88
51

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of NVIDIA Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of NVIDIA Corporation and its subsidiaries (the “Company”) as of January 29,

2023 and January 30, 2022, and the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for

each of the three years in the period ended January 29, 2023, including the related notes and financial statement schedule listed in the index

appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal

control over financial reporting as of January 29, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by

the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the

Company as of January 29, 2023 and January 30, 2022, and the results of its operations and its cash flows for each of the three years in the

period ended January 29, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion,

the Company maintained, in all material respects, effective internal control over financial reporting as of January 29, 2023, based on criteria

established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial

reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on

Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated

financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm

registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to

the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange

Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and

whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the

consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures

included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also

included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall

presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of

internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating

effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered

necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A

company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in

reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance

that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting

principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and

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directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or

disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any

evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or

that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was

communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the

consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical

audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by

communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which

it relates.

Valuation of Inventories - Provisions for Excess or Obsolete Inventories and Excess Product Purchase Commitments

As described in Notes 1, 10 and 13 to the consolidated financial statements, the Company charges cost of sales for inventory provisions to write-

down inventory for excess or obsolete inventory and for excess product purchase commitments. Most of the Company’s inventory provisions

relate to excess quantities of products, based on the Company’s inventory levels and future product purchase commitments compared to

assumptions about future demand and market conditions. As of January 29, 2023, the Company’s consolidated inventories balance was $5,159

million and the Company’s consolidated outstanding inventory purchase and long-term supply obligations balance was $4,920 million, of which a

significant portion relates to inventory purchase obligations.

The principal considerations for our determination that performing procedures relating to the valuation of inventories, specifically the provisions

for excess or obsolete inventories and excess product purchase commitments, is a critical audit matter are the significant judgment by

management when developing provisions for excess or obsolete inventories and excess product purchase commitments, including developing

assumptions related to future demand and market conditions. This in turn led to significant auditor judgment, subjectivity, and effort in performing

procedures and evaluating management’s assumptions related to future demand and market conditions.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the

consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s provisions for

excess or obsolete inventories and excess product purchase commitments, including controls over management’s assumptions related to future

demand and market conditions. These procedures also included, among others, testing management’s process for developing the provisions for

excess or obsolete inventories and excess product purchase commitments; evaluating the appropriateness of management’s approach; testing

the completeness and accuracy of underlying data used in the approach; and evaluating the reasonableness of management’s assumptions

related to future demand and market conditions. Evaluating management’s assumptions related to future demand and market conditions

involved evaluating whether the assumptions used by management were reasonable considering (i) current and past results, including historical

product life cycle, (ii) the consistency with external market and industry data, and (iii) changes in technology.

/s/ PricewaterhouseCoopers LLP

San Jose, California

February 24, 2023

We have served as the Company’s auditor since 2004.

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NVIDIA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

Year Ended

January 29,

2023

January 30,

2022

January 31,

2021

Revenue $ 26,974 $ 26,914 $ 16,675

Cost of revenue

11,618 9,439 6,279

Gross profit 15,356 17,475 10,396

Operating expenses

Research and development 7,339 5,268 3,924

Sales, general and administrative 2,440 2,166 1,940

Acquisition termination cost

1,353 — —

Total operating expenses

11,132 7,434 5,864

Income from operations 4,224 10,041 4,532

Interest income 267 29 57

Interest expense (262) (236) (184)

Other, net (48) 107 4

Other income (expense), net

(43) (100) (123)

Income before income tax 4,181 9,941 4,409

Income tax expense (benefit)

(187) 189 77

Net income

$ 4,368 $ 9,752 $ 4,332

Net income per share:

Basic

$ 1.76 $ 3.91 $ 1.76

Diluted

$ 1.74 $ 3.85 $ 1.73

Weighted average shares used in per share computation:

Basic

2,487 2,496 2,467

Diluted

2,507 2,535 2,510

See accompanying notes to the consolidated financial statements.

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NVIDIA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

Year Ended

January 29,

2023

January 30,

2022

January 31,

2021

Net income $ 4,368 $ 9,752 $ 4,332

Other comprehensive income (loss), net of tax

Available-for-sale debt securities:

Net unrealized gain (loss) (31) (16) 2

Reclassification adjustments for net realized gain (loss) included in net income

1 — (2)

Net change in unrealized loss

(30) (16) —

Cash flow hedges:

Net unrealized gain (loss) 47 (43) 9

Reclassification adjustments for net realized gain (loss) included in net income (49) 29 9

Net change in unrealized gain (loss)

(2) (14) 18

Other comprehensive income (loss), net of tax

(32) (30) 18

Total comprehensive income

$ 4,336 $ 9,722 $ 4,350

See accompanying notes to the consolidated financial statements.

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NVIDIA CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except par value)

January 29,

2023

January 30,

2022

ASSETS

Current assets:

Cash and cash equivalents $ 3,389 $ 1,990

Marketable securities 9,907 19,218

Accounts receivable, net 3,827 4,650

Inventories 5,159 2,605

Prepaid expenses and other current assets 791 366

Total current assets 23,073 28,829

Property and equipment, net 3,807 2,778

Operating lease assets 1,038 829

Goodwill 4,372 4,349

Intangible assets, net 1,676 2,339

Deferred income tax assets 3,396 1,222

Other assets

3,820 3,841

Total assets

$ 41,182 $ 44,187

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 1,193 $ 1,783

Accrued and other current liabilities 4,120 2,552

Short-term debt 1,250 —

Total current liabilities 6,563 4,335

Long-term debt 9,703 10,946

Long-term operating lease liabilities 902 741

Other long-term liabilities

1,913 1,553

Total liabilities 19,081 17,575

Commitments and contingencies - see Note 13

Shareholders’ equity:

Preferred stock, $0.001 par value; 2 shares authorized; none issued — —

Common stock, $0.001 par value; 8,000 shares authorized; 2,466 shares issued and outstanding

as of January 29, 2023; 2,506 shares issued and outstanding as of January 30, 2022 2 3

Additional paid-in capital 11,971 10,385

Accumulated other comprehensive loss (43) (11)

Retained earnings

10,171 16,235

Total shareholders' equity

22,101 26,612

Total liabilities and shareholders' equity

$ 41,182 $ 44,187

See accompanying notes to the consolidated financial statements.

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NVIDIA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Common Stock

Outstanding

Additional

Paid-in Treasury

Accumulated

Other

Comprehensive Retained

Total

Shareholders'

(In millions, except per share data) Shares Amount Capital Stock Income (Loss) Earnings Equity

Balances, January 26, 2020 2,450 $ 3 $ 7,043 $ (9,814) $ 1 $ 14,971 $ 12,204

Net income — — — — — 4,332 4,332

Other comprehensive income — — — — 18 — 18

Issuance of common stock from stock plans 40 — 194 — — — 194

Tax withholding related to vesting of restricted stock units (11) — — (942) — — (942)

Cash dividends declared and paid ($0.16 per common share) — — — — — (395) (395)

Fair value of partially vested equity awards assumed in connection with

acquisitions — — 86 — — — 86

Stock-based compensation

— — 1,396 — — — 1,396

Balances, January 31, 2021 2,479 3 8,719 (10,756) 19 18,908 16,893

Net income — — — — — 9,752 9,752

Other comprehensive loss — — — — (30) — (30)

Issuance of common stock from stock plans 35 — 281 — — — 281

Tax withholding related to vesting of restricted stock units (8) — (614) (1,290) — — (1,904)

Cash dividends declared and paid ($0.16 per common share) — — — — — (399) (399)

Fair value of partially vested equity awards assumed in connection with

acquisitions — — 18 — — — 18

Stock-based compensation — — 2,001 — — — 2,001

Retirement of Treasury Stock — — (20) 12,046 — (12,026) —

Balances, January 30, 2022 2,506 3 10,385 — (11) 16,235 26,612

Net income — — — — — 4,368 4,368

Other comprehensive loss — — — — (32) — (32)

Issuance of common stock from stock plans 31 — 355 — — — 355

Tax withholding related to vesting of restricted stock units (8) — (1,475) — — — (1,475)

Shares repurchased (63) (1) (4) — — (10,034) (10,039)

Cash dividends declared and paid ($0.16 per common share) — — — — — (398) (398)

Stock-based compensation — — 2,710 — — — 2,710

Balances, January 29, 2023

2,466 $ 2 $ 11,971 $ — $ (43) $ 10,171 $ 22,101

See accompanying notes to the consolidated financial statements.

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NVIDIA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

Year Ended

January 29,

2023

January 30,

2022

January 31,

2021

Cash flows from operating activities:

Net income $ 4,368 $ 9,752 $ 4,332

Adjustments to reconcile net income to net cash provided by operating activities:

Stock-based compensation expense 2,709 2,004 1,397

Depreciation and amortization 1,544 1,174 1,098

Acquisition termination cost 1,353 — —

Losses (gains) on investments in non-affiliates, net 45 (100) —

Deferred income taxes (2,164) (406) (282)

Other (7) 47 (20)

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable 822 (2,215) (550)

Inventories (2,554) (774) (524)

Prepaid expenses and other assets (1,517) (1,715) (394)

Accounts payable (551) 568 312

Accrued and other current liabilities 1,341 581 290

Other long-term liabilities

252 192 163

Net cash provided by operating activities

5,641 9,108 5,822

Cash flows from investing activities:

Proceeds from maturities of marketable securities 19,425 15,197 8,792

Proceeds from sales of marketable securities 1,806 1,023 527

Purchases of marketable securities (11,897) (24,787) (19,308)

Purchases related to property and equipment and intangible assets (1,833) (976) (1,128)

Acquisitions, net of cash acquired (49) (263) (8,524)

Investments and other, net (77) (24) (34)

Net cash provided by (used in) investing activities

7,375 (9,830) (19,675)

Cash flows from financing activities:

Proceeds related to employee stock plans 355 281 194

Payments related to repurchases of common stock

(10,039) — —

Payments related to tax on restricted stock units (1,475) (1,904) (942)

Dividends paid (398) (399) (395)

Principal payments on property and equipment (58) (83) (17)

Issuance of debt, net of issuance costs — 4,977 4,968

Repayment of debt — (1,000) —

Other

(2) (7) (4)

Net cash provided by (used in) financing activities

(11,617) 1,865 3,804

Change in cash and cash equivalents 1,399 1,143 (10,049)

Cash and cash equivalents at beginning of period 1,990 847 10,896

Cash and cash equivalents at end of period

$ 3,389 $ 1,990 $ 847

Supplemental disclosures of cash flow information:

Cash paid for income taxes, net

$ 1,404 $ 396 $ 249

Cash paid for interest

$ 254 $ 246 $ 138

See accompanying notes to the consolidated financial statements.

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NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Organization and Summary of Significant Accounting Policies

Our Company

Headquartered in Santa Clara, California, NVIDIA was incorporated in California in April 1993 and reincorporated in Delaware in April 1998.

All references to “NVIDIA,” “we,” “us,” “our” or the “Company” mean NVIDIA Corporation and its subsidiaries.

Fiscal Year

We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal years 2023 and 2022 were both 52-week years. Fiscal year

2021 was a 53-week year.

Reclassifications

Certain prior fiscal year balances have been reclassified to conform to the current fiscal year presentation.

Prior period intangible asset gross carrying amount and accumulated amortization in Note 7 have been adjusted to write off immaterial fully

amortized intangible assets as of January 30, 2022.

Principles of Consolidation

Our consolidated financial statements include the accounts of NVIDIA Corporation and our wholly-owned subsidiaries. All intercompany balances

and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the

reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from our estimates. On an on-going

basis, we evaluate our estimates, including those related to revenue recognition, cash equivalents and marketable securities, accounts

receivable, inventories, income taxes, goodwill, stock-based compensation, litigation, investigation and settlement costs, restructuring and other

charges, and other contingencies. The inputs into our judgments and estimates consider the economic implications of COVID-19. These

estimates are based on historical facts and various other assumptions that we believe are reasonable.

In February 2023, we completed an assessment of the useful lives of our property, plant, and equipment. Based on advances in technology and

usage rate, we increased the estimated useful life of a majority of the server, storage, and network equipment from three to a range of four to five

years, and assembly and test equipment from five to seven years. This change in accounting estimate became effective at the beginning of fiscal

year 2024. Based on the carrying amounts of a majority of our server, storage, network, and assembly and test equipment, net in use as of the

end of fiscal year 2023, it is estimated this change will increase our fiscal year 2024 operating income by $133 million as a result of the reduction

in depreciation expense.

Revenue Recognition

We derive our revenue from product sales, including hardware and systems, license and development arrangements, software licensing, and

cloud services. We determine revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification

of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance

obligations in the contract (where revenue is allocated on a relative standalone selling price basis by maximizing the use of observable inputs to

determine the standalone selling price for each performance obligation); and (5) recognition of revenue when, or as, we satisfy a performance

obligation.

Product Sales Revenue

Revenue from product sales is recognized upon transfer of control of products to customers in an amount that reflects the consideration we

expect to receive in exchange for those products. Certain products are

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sold with support or an extended warranty for the incorporated system, hardware, and/or software. Support and extended warranty revenue are

recognized ratably over the service period, or as services are performed. Revenue is recognized net of allowances for returns, customer

programs and any taxes collected from customers.

For products sold with a right of return, we record a reduction to revenue by establishing a sales return allowance for estimated product returns

at the time revenue is recognized, based primarily on historical return rates. However, if product returns for a fiscal period are anticipated to

exceed historical return rates, we may determine that additional sales return allowances are required to properly reflect our estimated exposure

for product returns.

Our customer programs involve rebates, which are designed to serve as sales incentives to resellers of our products in various target markets,

and marketing development funds, or MDFs, which represent monies paid to our partners that are earmarked for market segment development

and are designed to support our partners’ activities while also promoting NVIDIA products. We account for customer programs as a reduction to

revenue and accrue for potential rebates and MDFs based on the amount we expect to be claimed by customers.

License and Development Arrangements

Our license and development arrangements with customers typically require significant customization of our IP components. As a result, we

recognize the revenue from the license and the revenue from the development services as a single performance obligation over the period in

which the development services are performed. We measure progress to completion based on actual cost incurred to date as a percentage of

the estimated total cost required to complete each project. If a loss on an arrangement becomes probable during a period, we record a provision

for such loss in that period.

Software Licensing

Our software licenses provide our customers with a right to use the software when it is made available to the customer. Customers may

purchase either perpetual licenses or subscriptions to licenses, which differ mainly in the duration over which the customer benefits from the

software. Software licenses are frequently sold along with the right to receive, on a when-and-if available basis, future unspecified software

updates and upgrades. Revenue from software licenses is recognized up front when the software is made available to the customer. Software

support revenue is recognized ratably over the service period, or as services are performed.

Cloud Services

Cloud services, which allow customers to use hosted software and hardware infrastructure without taking possession of the software or

hardware, are provided on a subscription basis or a combination of subscription plus usage. Revenue related to subscription-based cloud

services is recognized ratably over the contract period. Revenue related to cloud services based on usage is recognized as usage occurs.

Product Warranties

We generally offer a limited warranty to end-users that ranges from one to three years for products in order to repair or replace products for any

manufacturing defects or hardware component failures. Cost of revenue includes the estimated cost of product warranties that are calculated at

the point of revenue recognition. Under limited circumstances, we may offer an extended limited warranty to customers for certain products. We

also accrue for known warranty and indemnification issues if a loss is probable and can be reasonably estimated.

Stock-based Compensation

We use the closing trading price of our common stock on the date of grant, minus a dividend yield discount, as the fair value of awards of

restricted stock units, or RSUs, and performance stock units that are based on our corporate financial performance targets, or PSUs. We use a

Monte Carlo simulation on the date of grant to estimate the fair value of performance stock units that are based on market conditions, or market-

based PSUs. The compensation expense for RSUs and market-based PSUs is recognized using a straight-line

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attribution method over the requisite employee service period while compensation expense for PSUs is recognized using an accelerated

amortization model. We estimate the fair value of shares to be issued under our employee stock purchase plan, or ESPP, using the Black-

Scholes model at the commencement of an offering period in March and September of each year. Stock-based compensation for our ESPP is

expensed using an accelerated amortization model. Additionally, we estimate forfeitures at least annually based on historical experience and

revise the estimates of forfeiture in subsequent periods if actual forfeitures differ from those estimates.

Litigation, Investigation and Settlement Costs

We currently, are, and will likely continue to be subject to claims, litigation, and other actions, including potential regulatory proceedings,

involving patent and other intellectual property matters, taxes, labor and employment, competition and antitrust, commercial disputes, goods and

services offered by us and by third parties, and other matters. There are many uncertainties associated with any litigation or investigation, and

we cannot be certain that these actions or other third-party claims against us will be resolved without litigation, fines and/or substantial

settlement payments or judgments. If information becomes available that causes us to determine that a loss in any of our pending litigation,

investigations or settlements is probable, and we can reasonably estimate the loss associated with such events, we will record the loss in

accordance with U.S. GAAP. However, the actual liability in any such litigation or investigation may be materially different from our estimates,

which could require us to record additional costs.

Foreign Currency Remeasurement

We use the United States dollar as our functional currency for our subsidiaries. Foreign currency monetary assets and liabilities are remeasured

into United States dollars at end-of-period exchange rates. Non-monetary assets and liabilities such as property and equipment and equity are

remeasured at historical exchange rates. Revenue and expenses are remeasured at exchange rates in effect during each period, except for

those expenses related to non-monetary balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from

foreign currency remeasurement are included in earnings in our Consolidated Statements of Income and to date have not been significant.