AI demand briefly catapults Nvidia into a $1 trillion club

Computer chip maker Nvidia briefly joined the exclusive club of $1 trillion market capitalization companies as market demand for artificial intelligence (AI) technology reached a crescendo.

The milestone was reached on May 30 in the morning trading hours of the United States by the computer chip and graphics card maker, with its shares reaching a daily high of more than $418, according to Google Finance.

Nvidia shares ended the day at just over $401 and the company currently has a market cap of $992 million.

In the United States, there are only four companies worth more than $1 trillion: Apple, Microsoft, Amazon, and Alphabet, Google’s parent company.

Nvidia has posted more than 180% gains since the start of the year thanks to rising demand for graphics processing units (GPUs) that power generative AI tools.

According to a May 30 Reuters report, analysts said that 80% of these GPUs are currently produced by Nvidia.

Some may see Nvidia’s recent breakout price action as a sign of an overheated market, but other analysts suggest there’s still plenty of room for Nvidia to grow with suggestions that the AI ​​boom may just be getting started.

“Tech traders and AI mania have pushed Nvidia to the $1 trillion mark, and it’s not cheap,” said Jim Kelleher, an Argus Research analyst.

Related: Nvidia introduces AI supercomputer to create ChatGPT successors

Nvidia is not alone in wanting to bring AI-ready chips to market. Microsoft is reportedly developing its own AI chip to power AI applications for Sam Altman’s artificial intelligence company OpenAI, as well as its own internal projects.

In April, former Twitter CEO Elon Musk purchased thousands of general-purpose processing units for an upcoming Twitter AI project, according to a source close to the case.

As tech companies and chipmakers in the US scramble to keep up with AI, Chinese developers are finding ways to get around sanctions that banned the latest version of Nvidia chips from being sourced locally.

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