Nvidia Passes Amazon and Alphabet to Become Third-Most Valuable Company in U.S.

Nvidia headquarters in Santa Clara, California. Image source Getty Images

As Nvidia’s stake price has summited at a historical height of $734.96, the company’s market value reached $1.82 trillion, followed by the retail tycoon Amazon’s $1.81 trillion. This means that the chip firm has zoomed to the fourth biggest market value company in the US, and is on its way to catch up with $1.87 trillion of Alphabet, the mother company of Google.

As the media has pointed out, the last time Nvidia’s market value exceeded Amazon’s was in 2002, when both companies’ market values were under $60 billion.

That Nvidia’s stake prices went up was attributed to the fact that the market made a powerful bet on the needs of Artificial Intelligence, resulting on Nvidia becoming the best performing stake among the ‘Seven Tycoon’, soaring as much as 223 percent over the past 12 months. This year, Nvidia’s stake price has risen 46 percent so far.

As for this potentially strongest chip tycoon in history, Nvidia seems to be far from ending its road of creating history.

The Artificial Intelligence has changed the data center and Nvidia

The purpose of establishing Nvidia was to completely make a difference on games and 3-dimension computer graphic technology in the multi-media field. The company were successful in a variety of chips, and made a tremendous leap in 1999, when it pushed out the world’s first graphic processing unit (GPU) Nvidia GeForce 256.

This milestone peaked at the latest GeForce RTX 40 series, which is able to provide digital contents with vivid graphics by deep learning super sampling (DLSS) - an unbelievable innovation of Nvidia. By making use of the artificial intelligence (AI), DLSS is capable of creating extra frames and improving image quality in video game scenes.

Games have been the biggest revenue driving force of Nvidia until Fiscal Year 2022 ( January 30 2022). Before that, the sales of the games department were 125 hundred million dollars, which accounts for approximately a half (46 percent) of the company’s total revenue. However, things were different then.

The data center used to be the place for the company to store valuable information, but it soon developed into the focus center of online operation (also called cloud computing). Nowadays, the data center is in charge of powerful chips designed by Nvidia that is used to process AI workload. 

Such transformation initiated in 2016, when Nvidia delivered OpenAI the first AI super computer, which is used to develop early generative AI model and has become the famous ChatGPT online chatting bot these days.

Now, the GPU in the H100 data center led by Nvidia is worth a sales price as high as $40,000 . Centralised data center operators such as Microsoft and Amazon have ordered over a hundred thousand of data centers to provide computing abilities for their cloud customers to develop AI. 

This contributed to the revenue of Nvidia’s data center in the third quarter of FY 2024 (until October 29 2023), soaring 279 percent in comparison. The business at the data center now accounts for 80 percent of Nvidia’s revenue, leaving the game business far behind. 

Nvidia in this day is a colossus worth 1.8 trillion dollars, with 1 trillion dollars of value created within the past 12 months. For the moment, Nvidia’s stake price might go up further.

Every country needs AI

In the world government summit held in Dubai on Monday, the founder and CEO of Nvidia, Huang Renxun revealed to the participants that every country needs its own abilities to produce information.

Huang made a speech when he had a conversation with the AI minister of United Arab Emirates Al Olama, describing AI sovereignty, which stresses a country’s ownership towards its data and information, as a huge opportunity for the world leaders.    

“It records your culture, your social wisdom, your commonsense and your history - your have your own data,” Huang told Al Olama in their conversation. This is the highlight of the activity attended by over 4,000 representatives from 150 countries.

Huang urged the leaders not to be “confused” by AI. AI has the unprecedented ability to receive normal human’s instructions, which makes it exceptionally significant for each country to embrace AI and infill it with local languages and specialised knowledge.

Huang even refuted the advice made by a lot of people with profound insights throughout the years, who prompt young people to study computer science in order to compete in the information era.

“The thing is, it is almost a completely contrary situation,” said Huang, “our job is to create computing technology that doesn’t need anyone to programme, and the programme language belongs to human - everyone in the world today is a programmer, this is the miracle.” 

At the same summit, Huang also suggested that we are at the beginning of this new era, and what will be happening is that the basic price for installing global data center will reach one trillion dollars, and in the next 4 to 5 years, we will own data centers worth 2 trillion dollars, which will power up the software around the world. In this sense, all these will be accelerated, and the accelerated computing structure is more than suitable for the next software generation of the so-called generative AI.

As for Nvidia, as a business company, Jensen proposed that “general computing” is not the best way we want for quick, highly and economically efficient AI.