U.S. chip maker Nvidia is on the verge of reaching a $1 trillion valuation, fueled by the increasing demand for processors that run artificial intelligence (AI) systems.
Nvidia stock soared 24% following the company’s impressive earnings announcement and a sales projection of $11 billion for the upcoming three months ending in July.
Nvidia would become the fifth publicly traded U.S. company to be currently worth $1 trillion, poised to join big tech giants Apple, Microsoft, Alphabet and Amazon.
The business that started 30 years ago is now on the cusp of becoming the first trillion-dollar chip company thanks to surging interest in AI technologies and AI bots such as ChatGPT.
Sales are up because of spiking demand for graphics processing units (GPUs). “We are significantly increasing our supply to meet surging demand for them,” said Jensen Huang, founder and CEO of Nvidia.
“The computer industry is going through two simultaneous transitions — accelerated computing and generative AI,” Huang said. “A trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service, and business process,” he said.
Companies worldwide are in a race to acquire high-performance microchips due to the growing demand for AI bots like ChatGPT, capable of composing emails or writing code. Elon Musk, who is reportedly building his own AI startup, said in an interview that GPUs are “considerably harder to get than drugs.”
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