The company reported earnings this week, describing a staggering surge in demand as the tech industry races to develop a new version of AI, which could be the largest single-day increase in corporate value ever recorded. explained that it is sexual.
A 24% rise in the stock price means Nvidia is worth $939.3 billion. That puts it ahead of Tesla and Facebook, which are worth $584.7 billion and $647.6 billion respectively. And it sits right behind big tech companies like Apple, Google, Microsoft, Amazon, and Saudi state oil giant Saudi Aramco, making them the only companies with more value.
Nvidia started in 1993 as the brainchild of three computer chip engineers. They predicted that as computers developed, they would need to do better at handling complex visuals. The gamble paid off, and by the early 2000s the company had won a contract to manufacture chips for Microsoft’s Xbox gaming console. Since then, NVIDIA has continued to grow as the video game market explodes, surpassing the film, television and music industries in size and value.
But the current boom comes as big techs and startups are vying to buy the company’s graphics processing units—GPU chips—for very different reasons. The chip is well suited to handle the massive amounts of data required to train cutting-edge artificial intelligence programs such as Google’s PaLM 2 and OpenAI’s GPT4. Nvidia has been steadily growing its AI-focused business over the past few years, but a surge in interest and investment in the space over the past six months has seen its revenue skyrocket.
Training AI models requires chips with lots of memory, says Greg Osuri, founder of Akash Networks, a marketplace for companies to sell to other companies that need access to GPUs. said Mr. “He just happens to be Nvidia making those chips.”
Startups looking to enter the AI race have been competing with big tech companies for Nvidia’s GPUs for months. At his Newcomer AI conference in March, David Luan, co-founder of AI start-up Adept Labs and former Google and his OpenAI engineer, said that once an AI company has established a business model, he will venture to start it. said it would need capital funding. I’m sending Jensen a check,” he said of Nvidia’s CEO Jensen Huang.
A set of eight state-of-the-art chips could cost as much as $300,000, Osli said. Companies buy thousands of them. Twitter owner Elon Musk recently purchased about 10,000 of his GPUs as part of plans to launch his own new AI company, according to Insider reports.
OpenAI’s ChatGPT, a chatbot that can have complex conversations, pass professional licensing exams, and write computer code, launched in November, demonstrating the promise of this technology, essentially Shown to work as a firing pistol for the new AI arms race.
On a conference call with investors on Wednesday, NVIDIA Chief Financial Officer Colette Kress called the ChatGPT announcement the technology’s “iPhone moment,” marking the point in time when the world realized the potential of this new technology. I was.
“This technology came together and everyone understood how great it was and what it could do,” Kress said.
NVIDIA’s share price has more than doubled this year already as the AI boom erupts, but the company announced Wednesday that it expects second-quarter revenue to reach $11 billion, according to Wall Street analysts. They had expected $7 billion. I had predicted.
Evercore analyst CJ Muse said the numbers “wowed everyone” and “nobody saw that.”
Reliance on Nvidia is so widespread that big tech companies are working to develop their own competing chips. It avoids having to rely on other companies to pay for and equip them in the same way that Apple spent years developing its own chips. that device. Google has been building its own “Tensor Processing Unit” for several years, and Microsoft and Amazon also have their own programs to design.
Still, these alternatives aren’t good enough for big companies, Muse said. “I think Nvidia’s dominance will continue.”