The artificial intelligence boom has its first $5 trillion champion. Nvidia, the chipmaker at the epicenter of the AI craze, saw its valuation soar to $5.05 trillion on Wednesday. This historic milestone is seen as the biggest technological shift since the iPhone, cementing the role of AI as a dominant force in the global economy.
The demand for Nvidia’s technology is relentless. The company’s stock has surged since early 2023 because its chips are considered essential for building and running advanced AI systems. CEO Jensen Huang recently confirmed this, revealing $500 billion in outstanding chip orders. This demand is why the company’s value leaped from $4 trillion to $5 trillion in just three months.
This $5 trillion valuation places Nvidia in a league of its own, with a market cap exceeding the individual GDPs of economic powerhouses like Japan, India, and the UnitedKingdom. The broader US stock market has also been buoyed by this AI fervor, hitting several new records this week.
Nvidia’s strategy involves embedding its technology across industries. Recent deals include a collaboration with Uber on robotaxis and a $1 billion investment in Nokia to pioneer 6G technology. The US government is also a major partner, with Nvidia helping to build seven new AI supercomputers for the Department of Energy.
However, some experts warn of a potential bubble. The Bank of England and the head of the IMF have both flagged the risk of tech stock prices becoming dangerously inflated by AI hype. Concerns point to the “circular” nature of some deals, like Nvidia’s $100 billion investment in OpenAI, which in turn plans to buy millions of Nvidia’s chips.