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Nvidia, the powerhouse in AI chips, achieved a historic milestone on Wednesday, becoming the first company in the world to reach a market valuation of $5 trillion, as investor faith in artificial intelligence suggests a forthcoming surge of innovation and growth.
The tech giant from California saw its share price rise 4.91 per cent to $210.90 at the start of trading on Wall Street, surpassing its previous market capitalisation record.
The rise in the company’s stock price is attributed to consistent strong sales, a wave of new contracts—including a collaboration with Europe’s Nokia, revealed on Tuesday and hopes that Nvidia may soon regain its business in China.
Nvidia’s CEO, Jensen Huang, is expected to visit South Korea later this week, where he will attend the APEC summit, during which US President Donald Trump will meet with his Chinese counterpart, Xi Jinping, to discuss AI development.
The Trump administration is inclined toward a more moderate strategy regarding the sale of AI chips to Beijing, though it faces considerable scepticism from pro-Biden factions in the US who advocate stricter restrictions on AI technology.
In recent weeks, Nvidia has declared several partnerships, including plans to invest up to $100 billion in OpenAI, the creator of ChatGPT, over the coming years.
Additionally, Nvidia announced it would invest $5 billion in struggling chipmaker Intel, aligning with the Trump administration’s goal of increasing domestic semiconductor manufacturing in the United States.
Nvidia manufactures cutting-edge graphics processing units (GPUs) that power most generative AI applications, including those supporting ChatGPT and various large language models.
