Nvidia has become the world’s first $5tn company as the artificial intelligence industry and wider US stock market boom. Just three months ago, the Silicon Valley chipmaker was first to break through the barrier of $4tn in market value.
In comparison, Nvidia’s value is greater than the GDP of India, Japan and the United Kingdom, according to the International Monetary Fund (IMF). It has far outgrown its competitors in the chip industry, gaining momentum as numerous tech stocks have surged in recent days.
Shortly after US stock markets opened on Wednesday, Nvidia’s shares touched $207.86 with 24.3bn shares outstanding, putting its market cap at $5.05tn. Ravenous appetite for Nvidia’s chips, seen as the most cutting edge in powering artificial intelligence products and software, is the main reason that the company’s stock price has increased so rapidly since early 2023.
The US stock market has reached multiple record highs this week, buoyed by expansive investment in artificial intelligence.
On Tuesday, Nvidia’s CEO, Jensen Huang, disclosed $500bn in chip orders. The company also announced a partnership with Uber on robotaxis and a $1bn investment in Nokia, with the two planning to work together on 6G technology. In addition, Nvidia is teaming up with the US Department of Energy to build seven new AI supercomputers.
OpenAI’s expansive plans for scaling its AI infrastructure are also heavily dependent on Nvidia’s technology. Last month, Nvidia announced that it will invest $100bn in OpenAI as part of a partnership that will add at least 10 gigawatts of Nvidia AI datacenters to ramp up the computing power for the owner of the artificial intelligence chatbot ChatGPT.
Huang and Nvidia have also gained the backing of Donald Trump, who called the CEO an “incredible guy” during a speech in South Korea on Wednesday. The president has frequently touted the company as a success story and suggested that he may allow a less-powerful version of the company’s Blackwell chip to be sold to China, a move that could potentially send Nvidia’s shares even higher. Trump also has a financial interest in the company – disclosing in a financial report that as of the end of last year he owned up to $1.3m worth of Nvidia shares.
Trump said on Air Force One last week that he would speak with the Chinese president, Xi Jinping, about Nvidia’s chips.
Hitting the new benchmark puts more emphasis on the upheaval being unleashed by an artificial intelligence craze that is widely viewed as the biggest tectonic shift in technology since the Apple co-founder Steve Jobs unveiled the first iPhone 18 years ago. Apple rode the iPhone’s success to become the first publicly traded company to be valued at $1tn, $2tn and eventually $3tn.
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But there are concerns of a possible AI bubble, with officials at the Bank of England earlier this month flagging the growing risk that tech stock prices pumped up by the AI boom could burst. The head of the IMF has raised a similar alarm.
Part of the concern over an AI bubble revolves around the circular nature of some of the industry’s deals. Nvidia’s $100bn investment in OpenAI, for example, hinges on OpenAI’s own plans to buy millions of Nvidia’s chips. The need for these chips is also primarily driven by the tech industry’s desire to massively scale its computing power, even as there is growing concern from analysts over companies showing that they are failing to secure revenue returns on their AI investments and that nearly all AI pilot programs in businesses fail.
