Nvidia’s computer chips and software are crucial to training the AI algorithms behind image-generators and chatbots like OpenAI’s ChatGPT. As the tech and business worlds throw themselves into the AI boom, demand for the chips has skyrocketed, pushing Nvidia’s revenue up to $26 billion in the first quarter of this year, up from just $7.2 billion a year ago.
The company’s rise to become the world’s most valuable company underlines how strongly investors believe Big Tech executives’ claims that AI will overhaul whole swaths of modern life. AI demands more processing power from computers than other kinds of software, and business leaders are busy building new data centers and filling them with chips from Nvidia and other companies to handle new AI tasks.
Professional investment funds and individual retail investors alike have thrown their money into Nvidia’s shares, pushing up the price even faster than the company’s revenue has grown. Since OpenAI kicked off the wave of interest in AI with the launch of ChatGPT at the end of November 2022, Nvidia’s stock price has grown about 700 percent.
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Nvidia controls about 70 percent of the market for AI chips, making the company a kingmaker in the industry. That has brought new scrutiny from regulators.
Nvidia did not immediately respond to a request for comment Tuesday.
Before the AI boom, Nvidia was best known for making computer chips used in video game consoles and computers. But the special characteristics of these “graphics processing units” that made them useful for gaming also made them well-suited to crunching the giant calculations needed to train AI algorithms.
In the mid 2010s, researchers at AI labs began using Nvidia GPUs as they tinkered with evermore capable AI. The company took notice, and began improving the software used to program its chips to make it more suited to AI work. By the time the AI boom happened, most of the industry was accustomed to using Nvidia’s chips and software. Other chip companies, like AMD and Intel, have scrambled to catch up, but industry analysts and AI researchers say that Nvidia will continue to benefit from its head start for years.
