Nvidia made history on Wednesday as the first company to reach US$5 trillion in market value, powered by a stunning rally that has cemented its place at the centre of the global artificial intelligence (AI) boom.
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The milestone underscores the company’s swift transformation from a niche graphics-chip designer into the backbone of the global AI industry, turning CEO Jensen Huang into a Silicon Valley icon and making its advanced chips a flashpoint in the tech rivalry between the US and China.
Since the launch of ChatGPT in 2022, Nvidia’s shares have climbed 12-fold as the AI frenzy propelled the S&P 500 to record highs, igniting a debate on whether frothy tech valuations could lead to the next big bubble.
The new milestone, coming just three months after Nvidia breached the US$4 trillion mark, would surpass the total cryptocurrency market value and equal roughly half the size of Europe’s benchmark equities index, the Stoxx 600 index.
“In the long run, we expect tech titans to strive to find second sources or in-house solutions to diversify away from Nvidia in AI, but these efforts will, at best, only chip away at, but not supplant, Nvidia’s AI dominance,” said Brian Colello, senior equity analyst at Morningstar.
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Shares of the Santa Clara, California-based company rose 3.5 per cent after a string of recent announcements solidified its dominance in the AI race.