Nvidia has become the first $5 trillion company, just three months after the Silicon Valley chipmaker was first to break through the $4 trillion barrier, AP reports.
Hitting the new benchmark puts more emphasis on the upheaval being unleashed by an artificial intelligence craze that's widely viewed as the biggest tectonic shift in technology since 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 $1 trillion, $2 trillion and eventually, $3 trillion.
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 International Monetary Fund has raised a similar alarm.
The ravenous appetite for Nvidia's chips is the main reason that the company's stock price has increased so rapidly since early 2023. On Wednesday the shares touched $207.86 in early morning trading with 24.3 billion shares outstanding, putting its market cap at $5.05 trillion.
In comparison, Nvidia's value is greater than the GDP of India, Japan and the United Kingdom, according to the International Monetary Fund.
Nvidia carved out an early lead in tailoring its chipsets known as graphics processing units, or GPUs, from use in powering video games to helping to train powerful AI systems, like the technology behind ChatGPT and image generators. Demand skyrocketed as more people began using AI chatbots. Tech companies scrambled for more chips to build and run them.
Nvidia CEO Jensen Huang has downplayed concerns of a bubble bursting, saying that the generative AI chatbots that were merely "interesting" when they first took hold a few years ago are now becoming so useful that they will be profitable.
Huang was heading to South Korea this week as leaders from major Pacific Rim economies, including the United States, China and Japan, are gathering for the annual Asia-Pacific Economic Cooperation summit that has long championed free trade but is now confronting sweeping U.S. tariffs on technology and other products.
The multilateral gathering in Gyeongju is expected to be overshadowed by a sideline event - a face-to-face meeting on Thursday between Trump and Chinese leader Xi Jinping - as their intensifying trade war leaves the South Korean hosts in a difficult balancing act.
On Tuesday, Huang disclosed $500 billion in chip orders. The company also announced a partnership with Uber on robotaxis and a $1 billion investment in Nokia, with the two planning to work together on 6G technology.
In addition, Nvidia is teaming with the Department of Energy to build seven new AI supercomputers.
Last month Nvidia announced that it will invest $100 billion in OpenAI as part of a partnership that will add at least 10 gigawatts of Nvidia AI data centers to ramp up the computing power for the owner of the artificial intelligence chatbot ChatGPT.
In August, Huang said that Nvidia was discussing a potential new computer chip designed for China with the Trump administration. Trump said on Air Force One that he will speak with Xi about Nvidia's chips on Thursday on the sidelines of the APEC event that Huang is also attending.
In August, Trump announced a deal with chipmakers Nvidia and AMD to lift export controls on sales of advanced chips to China in exchange for a 15% cut of the revenue, despite concerns from national security experts that such chips will end up in the hands of Chinese military and intelligence services. That same month, Trump announced that the U.S. government had taken a 10 percent stake in Intel worth around $11 billion.
Then, Nvidia announced last month that it's investing $5 billion in Intel and will collaborate with the struggling semiconductor company.
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