Advances in AI technology have now seen chip maker Nvidia join an elite club. Nvidia is now valued at more than $ 1 trillion.
The company joins the likes of Apple, Amazon, Alphabet and Microsoft. The tech companies are among the few publicly traded US firms that form the trillion-dollar club.
Until recently, this elite group has only ever had 6 members. The California headquartered company became the first chip maker to hit a $1 trillion valuation.
Obviously, the sudden stock rise is heavily driven by the recent demand for AI.
Since August of last year, NVIDIA has been producing AI chips. Owing to the increased popularity of AI, the company began witnessing a steep demand for chips as early as January.
“We had to place additional orders, and we procured substantially more supply for the second half of 2023”: said Nvidia Chief Executive Officer Jensen Huang.
Currently, Nvidia is placed sixth by Forbes among publicly listed companies. Apple comes in top position and it’s the first company to reach $3 trillion valuation.
It will be interesting to see if the company holds its high valuation for long. Previously, Meta and Tesla crossed the threshold but did not last long in the elite club.
The company was founded in 1993 and made its name in making chips. Significantly, Nvidia was popular for its chips that process computer game graphics.
Nvidia AI Gamble Pays Off
In recent months, the firm began adding functionality to its chips. This was way before the AI wave swept the tech world.
In the long run, this wise business gamble has paid off. Most AI applications today are running on Nvidia chips.
ChatGPT, the chatbot that kicked off the AI fever is one such application. A supercomputer owned by Microsoft and running 10,000 of Nvidia’s graphics processing units (GPUs) was used to train the AI chatbot.
AI is the current supercharged growth area and this might just be the beginning.
However, Nvidia will have to prove its worth especially as rivals AMD and Intel race to develop their own offerings, and start-ups emerge.
