AIChipmaker Nvidia Strikes AI Gold
The artificial intelligence boom has seen Nvidia achieve stunning financial results. Shares in the Silicon Valley company hit an all-time high, after its revenue doubled year-on-year in the second quarter of 2023 to $13.5 billion. But other companies, including Google, Microsoft and Amazon, want a piece of the action.
Semiconductors already occupy a pivotal place at the center of the global economy, but the rise of artificial intelligence is cementing it. The latest indicator was the stunning financial report posted by Nvidia, a world-leading chipmaker, on August 24.
Shares in the Silicon Valley company hit an all-time high, after its revenue doubled year-on-year in the second quarter of 2023 to $13.5 billion (€12.5 billion), smashing analyst expectations.
The reason for Nvidia’s boom? The firm specializes in the kinds of chips needed for various forms of artificial intelligence technology. Nvidia’s stunning success is directly tied to the artificial intelligence craze that has gripped the tech world ever since the launch of ChatGPT, a chatbot, last November.
Market analysts have said Nvidia is “uniquely positioned” to capitalize. “Its chips are distinctively capable of performing in ways that allow AI models to be trained using them,” Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, told DW.
Financial commentator Susannah Streeter agrees. “Being an early beneficiary of a megatrend is an enviable and rare opportunity, and Nvidia has a front seat on the AI juggernaut,” she told DW.
AI’s ‘iPhone Moment’
Although artificial intelligence has been around for many decades, the sudden and profound impact of ChatGPT dramatically changed the dynamic, according to Nvidia’s CEO and co-founder Jensen Huang.
Huang said earlier this year that artificial intelligence was “having its iPhone moment,” referring to how Apple’s iPhone transformed the tech sector.
“I think we were all surprised by how effective ChatGPT was in both its ease of use as well as incredible capability,” he said at an Nvidia developer conference in March. “Almost immediately after the ripples of ChatGPT around the world, cloud service providers and software vendors in all these different industries started to ask the question, what does it mean to them?”
For Nvidia, it means mega business. Since the start of 2023, the company’s share price has increased by around 220%. It now has a market capitalization of more than $1 trillion.
Lund-Yates said the company was already performing “streets away” from expectations and pointed to the huge, increasing demand for Nvidia’s products as an indication that its rise is going to continue. “Nvidia’s H100 chip, where demand is far outpacing supply, is currently selling for double its original price in the tens of thousands,” she said.
Founded in 1993, Nvidia is far from an overnight success. For much of its history it was focused on video games. It developed a reputation for building graphic cards that