SANTA CLARA, Calif — Nvidia has become the first $5 trillion company, just three months after the Silicon Valley chipmaker was the first to break through the $4 trillion market cap barrier. Hitting this new benchmark highlights the massive upheaval being unleashed by the artificial intelligence (AI) craze, 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. Now, Nvidia is setting new records amid the AI boom. However, concerns about a possible AI bubble have emerged. Officials at the Bank of England recently flagged the growing risk that tech stock prices, inflated by the AI excitement, could burst. The head of the International Monetary Fund (IMF) has also issued a similar warning.
The ravenous appetite for Nvidia’s chips is the main reason for the company’s rapid stock price increase since early 2023. On Wednesday, Nvidia shares closed at $207.04 with 24.3 billion shares outstanding, putting its market capitalization at $5.03 trillion. To put that figure into perspective, Nvidia’s value now exceeds the GDP of India, Japan, and the United Kingdom, according to the IMF.
Nvidia carved out an early lead by tailoring its graphics processing units (GPUs) from powering video games to training powerful AI systems like the technology behind ChatGPT and image generators. Demand skyrocketed as more people began using AI chatbots, prompting tech companies to scramble for more chips to build and run these tools.
Nvidia CEO Jensen Huang has downplayed concerns of a bubble bursting. He noted that generative AI chatbots, which were once merely “interesting,” are now becoming so useful that they are on track to be highly profitable.
This week, Huang was heading to South Korea for the annual Asia-Pacific Economic Cooperation (APEC) summit, which brings together leaders from major Pacific Rim economies including the United States, China, and Japan. The summit, traditionally a forum championing free trade, is now confronted with sweeping U.S. tariffs on technology and other products.
The multilateral gathering in Gyeongju is expected to be overshadowed by a high-profile face-to-face meeting between former U.S. President Donald Trump and Chinese leader Xi Jinping. Their ongoing trade tensions leave the South Korean hosts in a difficult balancing act.
On Tuesday, Huang disclosed that Nvidia has secured $500 billion in chip orders. The company also announced a partnership with Uber on robotaxis and revealed a $1 billion investment in Nokia, with plans to collaborate on developing 6G technology. Additionally, Nvidia is teaming up with the U.S. Department of Energy to build seven new AI supercomputers.
Last month, Nvidia announced a $100 billion investment in OpenAI as part of a partnership that will add at least 10 gigawatts of Nvidia-powered AI data centers to ramp up computing power for OpenAI, the owner of the ChatGPT AI chatbot.
In August, Huang mentioned that Nvidia was discussing a potential new computer chip designed specifically for China with the Trump administration. Trump stated on Air Force One that he planned to discuss Nvidia’s chips with Xi Jinping during their meeting on the sidelines of the APEC event, which Huang is also attending.
Earlier in August, Trump announced a deal with chipmakers Nvidia and AMD to lift export controls on advanced chip sales to China, in exchange for a 15% cut of the revenue. This move raised concerns among national security experts who fear these chips could end up in the hands of Chinese military and intelligence services.
That same month, Trump revealed that the U.S. government had taken a 10 percent stake in Intel, valued at around $11 billion. Following this, Nvidia announced last month that it would invest $5 billion in Intel and collaborate with the struggling semiconductor company.
As Nvidia continues to lead the AI chip revolution, its strategic partnerships and investments position it at the forefront of the rapidly evolving technology landscape.
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