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Nvidia is, at this moment, the most valuable company in the world: courtesy of the positive evolution in its share price, today worth US$3.33 billion (that is, millions of millions), thus surpassing the company that until now was the most valuable, Microsoft (which today is worth US$3.31 billion) and which only last week was the most valuable, Manzana (US$ 3.28 billion today). This trio of companies is quite far away – in stock market terms – from their immediate followers, such as Alphabet (the owner of Google; US$2.1 billion) and amazon (US$ 1.9 billion). The five most valuable companies in the world are directly related to technology. Seventh is Meta (the owner of Facebook1.2 trillion dollars) and eighth is TSMC ($0.93 trillion; it is the world’s largest chipmaker).
That 7 of the ten companies that have the most value are related to technology it is not surprising; That the majority is related to products that we use daily, and that are almost vital to us (Google, Instagram, an iPhone or Android, Windows, a digital service) is predictable; That number one is a company that until not so long ago was intrinsically related to the world of video games, and that is still a niche company today, may be striking.
Is there so much money in video games? The answer is no, but it was video games that gave this company, Founded in April 1993 by Jensen Huang (the current CEO), Chris Malachowsky and Curtis Priemthe tools necessary to be the heart of what is today the main driver of technology, and what the market assumes will dominate in the coming years: artificial intelligence.
Nvidia was born as a company dedicated to making chips that would allow computers to display three-dimensional graphics (in principle, but not only, for realistic video games) something that seems trivial to us today, but that back then required an accessory, today confined to the “gamer” computer: the video card, or 3D card. It was not the only one: it had a staunch rival in ATI, today part of AMD.
In any case, he did well designing these chips, which are different from those used by a normal computer to make the calculations necessary for Windows to load Chrome, or for Android to create the WhatsApp app. The main feature of these chips (which are known as GPU, or graphics processing unit, to differentiate them from CPUs, or central processing units, made by Intel, AMD or Qualcomm) is that They are very good at doing parallel calculations, a function that is very attractive in the scientific field, as understood by the company itself, which in 2006 presented its first chip for uses other than games.
While the company continued to bet on increasingly powerful video cards and 3D graphics chips (where it was, and is, a main player), two tectonic movements were happening in the world of computing, with a direct impact on other areas of society. One, the emergence and popularization of cryptocurrencies. Another, from artificial intelligence. Both live better on a GPU, and Nvidia caught on quickly.
Since chips designed for 3D graphics allow many calculations to be done in parallel very efficiently, they are the preferred hardware for mining bitcoins (a task that requires a lot of calculations), both homemade and industrial. The company became the main supplier – although not the only one – of a key input for a technology sector that generated a lot of money, so the company’s stock market value began to grow at a faster rate than it had been experiencing. Those server “farms” that were used to mine cryptocurrencies? The vast majority used Nvidia chips.
So for a long time Nvidia had a problem, born of its success: gamers who wanted to buy a board with an Nvidia chip so they could play at home could not get the company’s products, because bitcoin miners monopolized them all. They had to put unusual limitations on their operation to make them less attractive and allow gamers to buy these devices.
The other key boost, which took it to the top of the market, came with artificial intelligence, a discipline that seems to have been born with the ChatGPT debut in October 2022but which has actually been around for a long time, although with more specific uses (recognizing faces in photos, for example, something available in the last decade): in fact, in 2012 Nvidia made the decision to start develop chips optimized for artificial intelligencewhich – again – work better on processors capable of doing multiple calculations in parallel, like those designed by this company.
“We had the good judgment to orient the entire company behind this goal,” Huang said in an interview a year ago. “We saw very early, a decade ago, that this way of making software could change everything. AND we rebuilt the company from the bottom up and from one side to the other. “Every chip we make is focused on artificial intelligence.”
Nvidia accompanied the development of these excellent-performance chips with a series of software tools that allowed programmers to make the most of their capabilities. This made its chips the preferred ones to use in all autonomous car developments, which use many strategies and tools that we relate today to artificial intelligence; All Tesla cars, for example, have an Nvidia computer inside. That Nvidia software is called CUDA, and it is so central to the development of artificial intelligence applications that a group of giants such as Intel, Google and Qualcomm came together this year to create an open alternative.
Just as Intel was once synonymous with PC, because almost all PC-type computers had an Intel chip, today to think of an artificial intelligence platform is to think, to a large extent, of an Nvidia chip.
The “hit” of Nvidia’s artificial intelligence, if the term fits, was the A100, the processor optimized for artificial intelligence tasks that it presented in 2020 and that together with its 2022 version, the H100, is at the heart of all the computing centers where the software that makes ChatGPT and other generative artificial intelligence platforms run; In March of this year it presented the new version, B100, more powerful and efficient than the previous one.
Although Nvidia already seemed headed for stardom (in stock market terms, at least) no one expected that much. As of October 2022, Nvidia, the manufacturer of the parts that make ChatGPT work, was worth $280 billion. It’s not a small thing, of course, but it was in line with a company that was successful in its business, thirty years old. But niche. In November 2022, OpenAI introduced ChatGPT, and it quickly became clear that it was ushering in a new era in technological applications. By December, Nvidia surpassed $400 billion in valuation; In January 2023, it joined the club of companies with a valuation of more than $1 trillion.; In March of this year he reached 2 billion; This month it reached 3 billion dollars. Jensen Huang, the company’s CEO and founder, has a personal fortune of $119 billionmuch more than the 20,000 million it had in 2023, when the company’s shares were not worth that much.
The notable thing about the case for this company that employs 26,000 people is that its turnover is very far from its valuation: it is a company that billed $26.9 billion in its fiscal year 2023, a number that is not inconsiderable, but very far from what its fellow billionaires bill: Microsoft billed, in the same period, more than 200,000 million dollars; Apple, third in valuation, had a turnover of $383 billion during 2023.
Why then if Nvidia billed in a whole year what Apple billed in a monthAre they worth the same for the market? Because in February of this year Nvidia confirmed that in its fiscal year 2024 (which does not correspond to the calendar) it had a turnover of 60.9 billion dollars, 126 percent more than the previous year; Sales of equipment for computer centers (where ChatGPT and its ilk live) grew more than 400 percent year over year.
What it gives you Share value of this company born three decades ago is its future: The industry is clear that it is the key player in the world of artificial intelligence, a technological sector that is experiencing an explosion of uses and proposals, and that is far from having reached its ceiling. That perspective of almost infinite growth, which also gives a valuation of $80 billion to OpenAI (the company behind ChatGPT, which was founded in 2015) is what puts Nvidia at the top of the stock market world.
