NVIDIA BECOMES THE WORLD`S FIRST $5TRN COMPANY / THE FINANCIAL TIMES

 Nvidia becomes world’s first $5tn company

US chip giant’s stock propelled by strong sales of AI systems and prospect of access to China

Michael Acton in San Francisco, Alex Rogers in Washington and Tim Bradshaw in London

Chief executive Jensen Huang said Nvidia had already secured half a trillion dollars in orders of its AI chips for the next five quarters © Bloomberg

Nvidia has become the world’s first $5tn company after the US chip giant’s stock was propelled by strong sales of its artificial intelligence systems and the prospect of expanded access to the Chinese market.

The Silicon Valley-based company, which has been the biggest beneficiary of booming AI investment, climbed 5 per cent in early Wall Street trading on Wednesday, pushing its market capitalisation to $5.13tn.

US President Donald Trump said on Wednesday that he planned to discuss Nvidia’s Blackwell chip with China’s 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.

Nvidia’s latest generation of graphics processing units is not currently available in China because of US export controls.

The chipmaker’s shares had gained 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.

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.

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.

Three years ago, before the debut of OpenAI’s 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’s.

The AI chipmaker surpassed $1tn in market value within months of ChatGPT’s launch, hitting $2tn in February 2024 and $3tn in June last year.

Nvidia’s 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.

Confidence in Nvidia’s 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.

“I think we are probably the first technology company in history to have visibility into half a trillion dollars” 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.

Bernstein analysts said Huang’s 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.

The chipmaker’s growth has been driven by huge spending by a small group of large tech companies seeking to build the infrastructure to power AI models.

But Nvidia’s competitors, including its own customers, are looking to seize a larger share of that hardware market.

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.

Capital spending by the top six cloud computing companies alone — Amazon, Meta, Google, Microsoft, Oracle and CoreWeave — would rise to $632bn by 2027, Huang said.

Nvidia’s 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.

Beijing in turn has mounted a backlash against Nvidia’s chips as it seeks to decouple itself from American chip technology.

On Tuesday, Huang conceded that Nvidia was locked out of the China AI chip market for now and would need to “wait until [China] wants us to be there”.

“Do they want to be open market or selectively open market?” asked Huang. 

“That’s a question that they have to answer.”

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.

Huang has forged a close relationship with Trump, confirming this week that he had contributed to the US president’s roughly $300mn White House ballroom project.