Nvidia’s worth tops $5tn to match German economy

The AI boom has made Jensen Huang, Nvidia’s founder and chief executive, one of the world’s richest men - Kent Nishimura/Bloomberg

Nvidia has become the world’s first company to be worth $5tn (£3.7tn) despite growing fears of a bubble in artificial intelligence (AI) stocks.

The microchip maker’s shares rose more than 3pc in pre-market trading on Wednesday, on hopes that Donald Trump will allow it to sell more products in China.

This pushed Nvidia’s valuation past $5tn for the first time, having become the first company to reach $4tn only in July. Its value is now the same as the entire annual output of Germany’s economy.

It is also 50pc more than the entire FTSE 100 – the combined value of the London Stock Exchange’s most valuable 100 companies.

Furthermore, the tech giant is now over 19 times the value of AstraZeneca, Britain’s most valuable public company.

This milestone caps a rapid rise for Nvidia, which has been the biggest winner from the exorbitant spending spree on AI technology.

The company, founded in 1993, took 30 years to hit a $1tn valuation, crossing the milestone two years ago. But it has quintupled in value since then amid incessant demands for its chips, which train and run AI systems.

AI bubble

Nvidia has reached this latest landmark despite increasing warnings that the AI industry is mirroring the dotcom boom of the late 1990s.

The company’s shares have risen by more than 1,000pc since the release of ChatGPT in late 2022, which is powered by Nvidia’s chips.

Microsoft and Apple, the world’s next two biggest companies, hit $4tn valuations for the first time this week.

The boom has made Jensen Huang, Nvidia’s founder and chief executive, one of the world’s richest men, with a net worth of $174bn.

Mr Trump said on Wednesday that he planned to discuss Nvidia’s high-end Blackwell chips with Xi Jinping when he meets the Chinese president this week.

The company has faced severe restrictions on what it can sell in China, meaning a breakthrough would represent a new boost to sales.

Nvidia itself has faced claims that it is inflating the tech bubble by agreeing to a series of “circular” deals in which it invests in some of its biggest customers. This includes a $100bn investment in OpenAI, the maker of ChatGPT.

Mr Huang attempted to downplay claims of an AI bubble this week, saying that the technology was being widely used and that companies are paying for it.

“I don’t believe we’re in an AI bubble,” he told Bloomberg. “All of these different AI models we’re using – we’re using plenty of services and paying happily to do it.”

View Comments