Nvidia<\/a>\u2019s Blackwell chip with China\u2019s President Xi Jinping when the two leaders meet later this week, raising the prospect that Nvidia could regain access to a lucrative market for its semiconductors. <\/p>\nNvidia\u2019s latest generation of graphics processing units is not currently available in China because of US export controls.<\/p>\n
The chipmaker\u2019s shares had closed up 5 per cent on Tuesday, adding more than $200bn to its market capitalisation, after chief executive Jensen Huang said Nvidia had already secured half a trillion dollars in orders of its AI chips for the next five quarters.<\/p>\n
The stock milestone comes just three months after Nvidia became the first public company to hit a $4tn market capitalisation, and as shares in other US tech groups have also rocketed to record highs in recent months.<\/p>\n
Apple hit a $4tn valuation for the first time on Tuesday, while Microsoft hit the benchmark again after previously reaching it in July, propelled by the restructuring of OpenAI, in which it has a 27 per cent stake.<\/p>\n
Three years ago, before the debut of OpenAI\u2019s ChatGPT, Nvidia was valued at about $400bn. Its stock has grown explosively since then, fuelled by demand for its AI chip technology, which dominates the market for training and running large language models such as OpenAI\u2019s. <\/p>\n
The AI chipmaker surpassed $1tn in market value within months of ChatGPT\u2019s launch, hitting $2tn in February 2024 and $3tn in June last year. <\/p>\n
Nvidia\u2019s shares have risen more than 85 per cent in the past six months alone and the company is now worth more than the main stock indices of Germany, France and Italy combined.<\/p>\n
Confidence in Nvidia\u2019s ability to sustain its growth has been boosted by a barrage of long-term, multibillion-dollar deals around the world this year to build the vast data centre infrastructure to train and run artificial intelligence models. <\/p>\n
\u201cI think we are probably the first technology company in history to have visibility into half a trillion dollars\u201d in revenue, Huang said on Tuesday, referring to orders for its current generation of chips and new models it is set to launch next year.<\/p>\n
Bernstein analysts said Huang\u2019s projection meant Nvidia was on course for well over $300bn in chip sales in the 2026 calendar year, compared with Wall Street expectations of $258bn.<\/p>\n
The chipmaker\u2019s growth has been driven by huge spending by a small group of large tech companies seeking to build the infrastructure to power AI models. <\/p>\n
But Nvidia\u2019s competitors, including its own customers, are looking to seize a larger share of that hardware market. <\/p>\n
Nvidia has also moved to pump billions of dollars into its own customers, including a planned $100bn investment in OpenAI announced in September, raising questions about the circular financing arrangements used by the companies driving the AI boom.<\/p>\n
Capital spending by the top six cloud computing companies alone \u2014 Amazon, Meta, Google, Microsoft, Oracle and CoreWeave \u2014 would rise to $632bn by 2027, Huang said.<\/p>\n
Nvidia\u2019s growth has come despite tensions between Washington and Beijing this year that have choked off its access to China, costing the chipmaker billions of dollars in revenue from China-specific AI chips that were designed to comply with US export controls. <\/p>\n
Beijing in turn has mounted a backlash against Nvidia\u2019s chips as it seeks to decouple itself<\/a> from American chip technology.<\/p>\nOn Tuesday, Huang conceded that Nvidia was locked out of the China AI chip market for now and would need to \u201cwait until [China] wants us to be there\u201d. <\/p>\n
\u201cDo they want to be open market or selectively open market?\u201d asked Huang. \u201cThat\u2019s a question that they have to answer.\u201d<\/p>\n
Nvidia is also waiting for a 15 per cent revenue-sharing deal with the US government, struck earlier this year to allow it to continue exporting its chips to China, to be codified into a law.<\/p>\n
Huang has forged a close relationship with Trump, confirming this week that he had contributed to the US president\u2019s roughly $300mn White House ballroom project. <\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":2,"featured_media":106924,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[365,363,364,111,139,69,145],"class_list":["post-106923","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-new-zealand","tag-newzealand","tag-nz","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/106923","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=106923"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/106923\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/106924"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=106923"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=106923"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=106923"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}