Nvidia has become the most valuable company in the world, as the demand for its flagship AI chips soars and it gains momentum with its newly announced plans to build AI data centres.
On Tuesday, the Californian tech giant overtook Microsoft as the most valuable company worldwide, when its stock rose to over $3.34 trillion (£2.63tn), leaving the former top 1 company at $3.32tn. Nvidia is now also worth more than Apple (at $3.29tn), Google’s Alphabet ($2.17tn) and Amazon ($1.9tn).
The AI chipmaker’s rise has been fast, too – one of the fastest in history, considering the stock was worth less than 1% of its current value eight years ago.
Its value has risen by over 170% since the start of the year, surpassing Apple after reaching $2 trillion in February 2024. This comes just a year after hitting the $1 trillion mark. In comparison, both Apple and Microsoft took around five years to jump from $1tn to $3tn.
Nvidia’s unrivalled growth has set a new record on Wall Street, contributing to a 0.3% rise in the S&P 500 index on Tuesday.
Nvidia’s precursor role with AI factories
One of the main reasons behind Nvidia’s spectacular growth is its dominance in producing AI chips, the specialised integrated circuits capable of handling AI tasks. Several estimates consider that Nvidia controls over 80% of the AI chip market.
But the company didn’t just focus on AI chips; it also owes much of its success to another field where it leads the industry, AI factories.
Also known as AI data centres, AI factories are specialised facilities which provide the infrastructure and resources needed to produce advanced AI models for companies. In other words, AI factories generate intelligence, which is then used to operate complex AI models or IT systems.
Without surprise, Nvidia and its flagship chips are at the forefront of AI factory development. According to the company, Nvidia’s total revenue for the first quarter ended April 28, 2024, was $26bn, while its data centre revenue was worth $22.6bn, up 427% compared to last year’s numbers.
Earlier this year, the company’s CEO Jensen Huang unveiled a blueprint for these specialised data centres, calling them the homes of a “new industrial revolution,” and claiming that “in the future, every company, every industry, will have AI factories.”
In May, Huang said in a statement that this new industrial revolution “has begun”. “Companies and countries are partnering with NVIDIA to shift the trillion-dollar traditional data centres to accelerated computing and build a new type of data centre — AI factories — to produce a new commodity: artificial intelligence,” he said.
The tech giant has already announced a deal with Foxconn to build AI factories using Nvidia chips. The company also unveiled a new AI chip, the Blackwell GB200, which will be used by Amazon’s cloud service AWS as well as computer giant Dell to build and develop new AI factories.
“We are poised for our next wave of growth,” Huang said.
