Nvidia started out as a humble graphics card maker. Now it’s riding the tech industry’s AI obsession to absurd new heights. The company added $329 billion to its market cap on Wall Street today after a record-breaking day on the stock market. Bloomberg Reports.
Most people know Nvidia as the maker of the chip that powers their Android phones, Nintendo Switches, and high-end PC gaming rigs. The company got its first big break by developing the GPU for Microsoft’s original Xbox, and helped Sony develop the graphics processor for the PlayStation 3. For years, it was the company that held up big hunks of metal with plastic fans on stage to woo gamers. with upgrades they couldn’t afford. Now it has quickly become something completely different.
In early 2023, Nvidia was trading for under $15 per share. Less than two years later, the stock is above $100. What’s changed? Microsoft and others are buying GPUs to fuel their AI ambitions. It seemed like the fever had broken amid a renewed wave of skepticism about what generative AI and machine learning will actually be useful for, but then Microsoft announced that it will continue to invest billions in in server farms for AI computing, and Nvidia shares rose more than most companies are worth in less than eight hours. Let’s recall some previous highs:
329 billion dollars is more than Netflix, Coca-Cola and Bank of America. That is the value of eight Electronic Arts and twelve Take-Twos, whose subsidiary Rockstar Games Grand Theft Auto VI next year. Nvidia isn’t worth more than it’s ever been — it peaked at over $3 trillion last month — but this one-day swing shows how utterly disconnected the company has become from its recent history or current market realities. OpenAI reportedly loses billionsAs meta pivots from VR to the AI chip arms race and others desperately try to catch up, Nvidia has quickly become the center of the technology and financial universe.
“These violent pleasures have violent ends.” We could be witnessing the first of many transformations before Nvidia takes its final form. Perhaps it will become the first true megacorporation in a future cyberpunk dystopia, or perhaps some of the plates will stop spinning and start breaking, and the company will return to releasing hard-to-get Gundam-Branded graphics cards for $4,000 gaming rigs that you can play with Ghost of Tsushima in 4K at 120 fps. It’s never a good sign when the numbers get so crazy that they no longer mean anything.
