Nvidia overtakes Microsoft as world's most valuable company

SAN FRANCISCO — Nvidia, the computer chip maker at the center of the artificial intelligence boom, continued its impressive share price rise on Tuesday, surpassing Microsoft and Apple to become the world's most valuable publicly traded company.

Nvidia shares rise The company's shares rose more than 3% on Tuesday, giving it a market capitalization of more than $3.3 trillion. Apple and Microsoft, which have traded hands for the title of world's most valuable company for many years, were worth just below that at the close of trading.

Nvidia's computer chips and software are essential for training the AI algorithms behind image generators and chatbots like OpenAI's ChatGPT. Demand for chips has soared as the tech and business worlds embrace AI, helping Nvidia's revenue grow to $26 billion in the first quarter of this year from $7.2 billion in the same period last year.

Its growth into the world's most valuable company shows how strongly investors believe the claims of tech giants' executives that AI will reshape every aspect of modern life. Because AI demands more computing power than other kinds of software, business leaders are busy building new data centers and equipping them with chips from Nvidia and other companies to handle the new AI tasks.

Professional investment funds and individual retail investors are also pouring money into Nvidia shares, causing the stock price to rise faster than the company's revenue growth. Nvidia's shares have risen about 700% since OpenAI launched ChatGPT in late November 2022, sparking a wave of interest in AI.

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Nvidia controls about 70% of the AI chip market, making it an industry kingmaker and drawing new scrutiny from regulators.

Nvidia did not immediately respond to a request for comment Tuesday.

Before the AI boom, Nvidia was best known for making computer chips used in video game consoles and computers, but the special properties of these “graphics processing units” that make them useful for gaming also made them well suited to handling the massive calculations needed to train AI algorithms.

In the mid-2010s, researchers at AI labs began using Nvidia's GPUs to improve increasingly powerful AI. The company took notice and began improving the software that programs its chips to make them better suited for AI work. By the time the AI boom hit, most of the industry was accustomed to using Nvidia's chips and software. Other chip companies, such as AMD and Intel, scrambled to catch up, but industry analysts and AI researchers say Nvidia will continue to benefit from this lead for years to come.

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