Gen AI Boom Drives Nvidia Value to Overtake Microsoft

It is no secret that Nvidia has made significant strides in the technology industry.

In the first half of 2024 alone, the tech giant has lifted its market cap to more than three-trillion, just days after overtaking Apple as the second-most valuable company. Now, Nvidia’s surge in stock has also led it to overtake Microsoft as the world’s most valuable company, which can be attributed in part to the popularity of its high-end chips.

Businesses are continuing to get their hands on these processors, as they enable a faster way to develop and deploy AI. Nvidia is successfully dominating this market, with its daily turnover averaging US$50bn, according to Reuters. The company now accounts for roughly 16% of all trading in S&P 500 companies.

Technology demand fuelled by the AI race

There continues to be an appetite for Nvidia’s AI processors, which are often viewed as elite to competitor offerings. As a result, demand for its graphics processing units (GPUs) far outstrips supply and Nvidia continues to be celebrated for its fast-paced and timely AI developments.

In fact, Nvidia’s market value expanded from US$1tn to US$2tn in the space of just nine months in February 2024, attesting to how quickly the company is transforming. Now having hit US$3tn, it shows no signs of slowing down.

Generative AI (Gen AI) continues to be the marvel of the technology industry today, with its capabilities often being revolutionary for businesses. A recent study conducted by IBM found that 50% of CEOs globally are already embedding Gen AI into their digital offerings, with three-quarters convinced that companies at the forefront of these developments will achieve a significant competitive advantage.

“Industry experts and consulting leaders are building out practices to guide enterprises through adding Gen AI capabilities to their businesses,” Erik Pounds, Senior Director of Enterprise AI at Nvidia told Technology Magazine in May 2024. “The industry will continue to evolve at a rapid pace, and enterprises with strong partnerships will be well positioned to adapt their strategies and lead their industry in Gen AI.”

Achieving AI success on a global scale

First founded in 1993, Nvidia has spent more than 30 years perfecting its AI chip capabilities. The company first set out to invent GPUs for computer games, sensing that this would become a huge market - and ended up redefining computer graphics as we recognise it today.

Now, the company is at the forefront of the digital transformation era, working with Gen AI and digital twins to transform business development. Nvidia’s services assist companies such as Alibaba, Amazon, Google, Meta and Microsoft, in addition to 40,000 other businesses.

In 2023, the company announced H200, a new high-end chip for training AI models: an upgrade from the H100 - the chip that OpenAI used to train GPT-4. This year, in 2024, Nvidia debuted Blackwell, a new GPU that aims to help unlock breakthroughs in data processing, engineering simulation, automation, computer-aided drug design and quantum computing.

Blackwell has been hailed a huge success, with businesses eager to get their hands on the most up-to-date chips to continue innovating.

Speaking upon its release, Nvidia CEO Jensen Huang commented: “Gen AI is the defining technology of our time. Blackwell is the engine to power this new industrial revolution. Working with the most dynamic companies in the world, we will realise the promise of AI for every industry.”

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