Chipmaker Nvidia has become the first company in the world to surpass $4.5 trillion in market capitalization. The historic record was set amid news of a series of multibillion-dollar deals to build infrastructure for artificial intelligence, including with OpenAI, CNBC reported.
Nvidia’s stock has surged 39% this year, fueled by unprecedented investments in AI infrastructure from tech giants. Key recent deals include:
- OpenAI partnership: last week, Nvidia announced plans to invest up to $100 billion in equity in ChatGPT, a developer of artificial intelligence. The deal also includes building hundreds of billions of dollars’ worth of data centers for OpenAI.
- $500 billion Stargate project: OpenAI and Oracle have announced the construction of five giant data centers equipped with hundreds of thousands of Nvidia graphics processing units (GPUs).
- Meta deal for $14.2 billion: cloud provider CoreWeave, of which Nvidia itself is a major shareholder, has signed a deal to provide infrastructure services to Meta for the specified amount.
According to Nvidia CEO Jensen Huang, his company’s products account for about 70% of the total cost of building a new AI data center, making Nvidia the main beneficiary of this technological race.
Nvidia shares rose almost 3% on Tuesday on the back of this news. Analysts continue to raise their forecasts. In particular, Citi experts raised the target price for the shares from $200 to $210.
Nvidia is outpacing all tech giants in growth this year, trailing only another chipmaker, Broadcom, which is also benefiting from the AI boom.