Nvidia, creator of the ChatGPT artificial intelligence chips, reached a stock market value that exceeds 3 billion dollarssurpassing Apple and becoming the second largest company in the worldbehind Microsoft.
At the close on Wall Street on June 5, 2024, Nvidia consolidated its rise after weeks of strong growth, driven by its quarterly results and the announcement of new products. Below are five points that led Nvidia to this achievement.
1. Partnership with OpenAI for ChatGPT and its popularity
Since the end of 2022, the term artificial intelligence is on everyone’s lips due to the popularity of ChatGPT. According to Telefónica, one of the reasons why this tool is widely recognized is because has managed to open a door to the democratization of AI.
For ChatGPT to work, it requires processors specifically made for technology that Nvidia develops.
The popularity of the OpenAI chatbot and the need for hardware, led to Nvidia becoming a leader in the supply of processors in the field of AI.
NVIDIA processors are central to AI technologies used by technology companies such as Google and Microsoft, which invests in the startup OpenAI.
According to The Wall Street Journal, Nvidia currently has between 70% and 90% of the market share in this industry, and its profits increased by 400% in 2023 compared to the previous year.
2. Launch of innovative products with artificial intelligence
Nvidia’s recent positioning as the second most valuable company occurred when Jensen Huang, its CEO, was in Taipei, Taiwan presenting the company’s latest advances.
The company is working on Rubin AI, a new architecture for artificial intelligence systems that will be available in 2026. This platform will be intended to cover the computational processing needs of small businesses and home users.
The company’s CEO stated that the volume of data to be processed is growing exponentially and that traditional computer models have been left behind.
“Generative AI is reshaping industries and opening new opportunities for innovation and growth,” Huang said at the event.
On the other hand, Nvidia has developed special super computers with artificial intelligence that are highly requested by companies.
Recently, Huang handed over DGX H200 to OpenAI executives Sam Altman and Greg Brockman. According to Nvidia, it is “the only AI supercomputer that offers enormous memory space”, that is, it has the capacity to hold a lot of data so that an artificial intelligence system like ChatGPT can respond to user requests more quickly and better.
3. Data centers and Nvidia’s latest economic report
Nvidia reported revenue of $26 billion for the first quarter of 2024 ended April 28 of the same year mentioned. This figure reflects a growth of 18% compared to the previous quarter and an increase of 262% compared to the same period last year.
NVIDIA’s data center segment achieved record quarterly revenue of $22.6 billion, representing a 23% increase from the fourth quarter of 2023.
A data center is a physical facility where computing and storage systems are housed that allow large amounts of data to be processed, managed and stored.
These centers are essential for supporting IT services, cloud applications and critical business processes, serving as the core of many organizations’ digital infrastructure.
4. Jensen Huang Leadership
Nvidia’s success could be due to the management of Jensen Huang, who has earned recognition from his workers as a notable leader.
In a 2023 survey by Blind on CEO approval, Huang had the highest approval rating. Almost all verified NVIDIA professionals on Blind (96%) approved of his performance as CEO.
Blind is a social network for professionals that conducted this survey anonymously among employees of 104 technology companies.
Nvidia was founded in 1993 by Jensen Huang, Chris Malachowsky and Curtis Priem. The three founders provided engineering and technology expertise for the company to develop graphics processors and artificial intelligence technology.
5. A possible lag for Apple
This company was the first to reach the milestones of 1 trillion, 2 trillion and finally 3 trillion dollars in June 2023 (according to the long numbering system), but its growth has not been enough to maintain its position against the rise of Nvidia.
Due to the anticipation for WWDC 2024 (Apple Worldwide Developers Conference) that will take place in the coming days, The New York Times has noted that Apple has overhauled its tools with artificial intelligence.
This decision would have been made after several tests carried out by executives Craig Federighi and John Giannandrea with OpenAI’s chatbot, ChatGPT.
ChatGPT’s abilities in text generation, code creation, and complex query resolution would have highlighted Siri’s limitations in managing natural language conversations with users.
