Nvidia CEO Jensen Huang said Wednesday that artificial intelligence will lead to more jobs, not fewer. In an interview with BlackRock CEO Larry Fink at the World Economic Forum in Davos, Switzerland, Jensen methodically explained how AI differs from other technological innovations of the past and how it can be an incredible engine for economic growth and prosperity. Jensen’s sitdown with Fink, who co-chairs the WEF, was a high-level conversation about what AI is and what it is not, and what investments are needed and why, and how much. At the heart of the exchange, the CEO of Club name Nvidia said that AI is a platform shift. Examples of platforms include personal companies, the internet, smartphones, and the cloud — both physical and digital infrastructure that applications that we all use in our daily life are built on top of. Just as those platforms laid the foundation for so much economic growth, so too will AI. While ChatGPT and other large language models may technically be applications themselves, the difference is that new, AI-oriented applications will be built on top of these LLMs. Jensen sees five layers to the buildout of the AI platform: (1) enough energy to run everything; (2) chips/compute infrastructure, where Nvidia dominates; (3) cloud infrastructure/services; (4) AI models; and (5) the application layer, which is the key layer where the economic benefits of AI will be realized. Tempering the not-so-irrational fears out there about AI replacing human workers, Jensen offered a more optimistic view. Outside of the jobs being created by the physical build-out of AI infrastructure — such as electricians, plumbers, construction workers, and so on — Jensen said that implementing AI will lead to more demand for goods and services that, in turn, will lead to more hiring. Not as many employees per customer may be needed, but the customer growth that comes with a more efficient corporation can still result in demand for more workers For example, Jensen said that the number of radiologists has increased because hospitals can now process more patients thanks to AI. While AI may be reading the scans, humans are still needed to review and confirm diagnoses. More patients, more scans to review, more human radiologists needed. The bonus is that with AI doing the scans, the radiologists have more time to spend with patients or to discuss results with peer clinicians. Jevons Paradox ? Seeing a radiologist becomes easier as the radiologist becomes better and more efficient at their job, resulting in an overall increase in demand from patients looking to see radiologists. Radiology was a timely analogy as Club name Bristol Myers Squibb said Tuesday it will work with Microsoft’s AI-powered radiology platform to develop and launch imaging algorithms aimed at accelerating early detection of lung cancer. These new tools, which can be used to analyze X-rays and CT scans, will help clinicians see hard-to-spot lung nodules and identify patients with earlier stages of disease. The alliance is the latest way health care and artificial intelligence are rapidly intersecting. On stage with Fink on Wednesday, Jensen noted a similar dynamic in nursing to what’s going on in radiology. Nurses spend about half of their time charting. Thanks to AI, however, Jensen said nurses can spend more time visiting patients and providing that human touch that is often lacking when a hospital suffers a staffing shortage. By reducing the nursing bottleneck, hospitals can see more patients more quickly. As a result, more demand for hospitals leads to improved financials and, in turn, the ability to hire more nurses. In Jensen’s view, the key to understanding how AI will impact a given job is to first differentiate between the purpose and the task. Going back to the radiology example, he said the purpose of a radiologist is to diagnose patients — and that at the end of the day, the job for both radiologists and nurses is to care for people. Reading charts and scans is crucial to that purpose, but it is a task that needs to be done to achieve the job’s ultimate objective. By automating certain tasks, we can make people better at their actual jobs. So, AI, in the context of medical settings, should not result in fewer doctors and nurses, Jensen argued, but should lead to more doctors and nurses spending more time with their patients while providing better outcomes. Asked about investments in AI, Jensen pretty much put to bed the idea of a spending bubble. So, when asked instead if investment levels are too low, he provided an easy way to think about the spending and whether there’s a bubble or if more spending is warranted. He said it comes down to the fact that despite millions of Nvidia GPUs (graphics processing units) now available in the cloud, the spot price for GPU rentals is increasing, not only for the latest generation, but even for those chips two generations in the rear view mirror. He attributed this to the number of AI companies being created. When a two-generation-old GPU is seeing its rental price increase, it’s clear that supply (overall, not just as it relates to the latest chips) is falling well short of demand. Bottom line While there may be bubble-like areas of the market, that word has no place in the conversation when discussing names like Nvidia or the mega-cap cloud infrastructure players that generate real earnings and trade at reasonable valuations. We remain in the early stages of the AI infrastructure buildout, before we even start to really think about the application layer of the stack touching every aspect of our daily lives. (Jim Cramer’s Charitable Trust is long NVDA, BMY, BLK. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.