AI isn’t only changing how humans work and play, but it’s is causing companies enabling it to smash records.
NVIDIA has become the first company to touch a market cap of $4 trillion. NVIDIA’s shares rose more than 2 percent in trade today, touching $164 per share. This took the company’s valuation above the $4 trillion mark, becoming the first company in history to touch the milestone.
While NVIDIA is now valued at $4 trillion, Microsoft isn’t far behind with a market cap of $3.75 trillion. It is followed by Apple, which is currently worth $3.1 trillion, Amazon worth $2.3 trillion, and Google worth $2.1 trillion.
NVIDIA has seen a meteoric rise up the charts since the AI revolution was set off with the launch of ChatGPT in November 2022. AI systems like ChatGPT used NVIDIA’s GPUs to train their models and deliver AI results to consumers. This created a massive demand for GPUs, as all manner of companies scrambled to get their hands on GPUs and build AI models. Such was the demand that there were shortages for GPUs for a while, and people began black marketing GPUs. NVIDIA has ramped up production since then, but the demand for GPUs has persisted. NVIDIA’s shares are up an astonishing 12x since November 2022. Last year, NVIDIA had become the most valuable company in the world, and now has become the first company to touch a valuation of $4 trillion.
NVIDIA does seem to have the perfect business model — a near-monopoly on enabling one of the most transformative technologies of all time — but there are some threats on the horizon. Google famously uses its own TPUs and doesn’t rely on GPUs, and there have been rumours that it has been letting other companies, including OpenAI, use these chips. Also, companies like AMD Intel are also looking to challenge NVIDIA’s monopoly, and create popular GPUs of their own. Meanwhile, tech companies like Amazon and OpenAI are also looking to design their own chips. And NVIDIA also faces the threat of being very closely tied to the AI space — if AI cannot generate the returns that people expect, it could diminish the demand for GPUs, and negatively impact NVIDIA’s share price. But at the moment, there seems to be no stopping NVIDIA. And with it becoming the first company in history to touch a valuation of $4 trillion, it has already cemented its name in the history books.