■ Nvidia Corp. joined some rarified company with a valuation that broke the $1-trillion (U.S.) barrier on Tue

Only 5 U.S. firms and 10 globally have valuation that high

Nvidia Corp. became the world’s first chipmaker with a $1-trillion (U.S.) market capitalization, joining the ranks of just five American companies with valuations that high.

The stock rose 4.3 per cent in New York trading on Tuesday, gaining a market cap of $1.02 trillion and joining the likes of Alphabet Inc., Amazon.com Inc., Apple Inc. and Microsoft Corp. in trillion-dollar valuations. It closed at $401.11.

Fewer than 10 companies globally have ever achieved this level.

No other company embodies Wall Street’s current obsession with AI more than Nvidia. It has become the world’s biggest maker of the specialized chips needed to power a new generation of AI products, surpassing Advanced Micro Devices Inc. and Intel Corp. in capability just as the viral success of ChatGPT has virtually every company around the world baking AI into its operations.

In a speech at the National Taiwan University over the weekend, Jensen Huang shared the philosophy that has brought his company to this moment: “Run, don’t walk,” he said. “Either you are running for food, or you are running from becoming food.”

Huang’s urgency — and his willingness to take risks that other ruleby-committee businesses dare not — is what compelled Nvidia Corp., the Silicon Valley chipmaker he founded 30 years ago, to make big bets on artificial intelligence years before anyone else was taking it seriously. Today, it’s proving to be the company’s golden goose.

Nvidia’s shares have soared since last week when it gave an AI-fuelled sales forecast that shattered Wall Street’s estimates. The stock continued to gain Tuesday after announcing several new artificial intelligence-related products over the weekend that touch on everything from robotics to gaming to advertising and networking. Huang also unveiled an AI supercomputer platform that will help tech companies create their own versions of ChatGPT.

Not everyone is bullish. In an interview on Bloomberg TV on Friday, Cathie Wood, whose flagship ARK Innovation ETF fund cut its holding in Nvidia in January, warned that the computer-chip industry’s boom-bust cycles pose risks.

“There are a few reasons we take some pause,” she said, with competition growing among firms for a piece of the AI market. She called Nvidia a “a check-the-box stock.”

Huang has a knack for riding tech trends — selling graphics chips that powered everything from the video game boom to the rise of cryptocurrency and the industry’s big bet on the metaverse. But arguably no trend stands to benefit his company, today the world’s most valuable chip company, more than the rise of artificial intelligence.

Nvidia was co-founded in 1993 by Huang. It proved more successful than its peers at developing chips that turn computer code into the realistic images that computer gamers love, and rode out a wave of consolidation that saw its rivals acquired, bankrupted or merged into larger companies.

Under Huang, the company then pushed its technology into new markets, such as data centre servers and artificial intelligence processing — a move that’s proving prescient today. In less than a decade, Nvidia’s data centre business has grown from $300 million in annual revenue to $15 billion. The chipmaker has won orders to equip giant computing factories by successfully arguing that graphics chips can handle AI workloads better than more standard processors.

Nvidia’s success has made investors even gloomier about Intel, a Silicon Valley pioneer and the company most synonymous with computer chips. While many chip makers saw their stocks gain in the wake of Nvidia’s blockbuster earnings last week, Intel actually fell. Nvidia’s valuation is now more than eight times that of Intel, despite the company having far less revenue.