Nvidia gains $200bn in value after it predicts AI-driven boom in chip demand
The value of the US tech company Nvidia has soared by almost a quarter after it predicted a boom in demand for its computer chips to meet the needs of artificial intelligence products such as ChatGPT.
Nvidia’s share price rose by 24% in after-hours trading on the back of the announcement, and put it on course for a market valuation well over $900bn (£730bn) when stock markets open on Wall Street on Thursday, up from $755bn on Wednesday evening.
The share price had already more than doubled over the course of 2023, amid huge optimism over the rapid progress of generative AI products. These require massive data centres full of semiconductor chips to operate.
The hype was kicked off late last year after the startup OpenAI revealed ChatGPT, a chatbot capable of producing extraordinarily human-like answers to users’ queries – albeit with problems around accuracy.
So rapid has the development of similar technology been in recent months – including realistic pictures, audio and video – that even AI experts are unclear about the potential capabilities and dangers of the technology.
Companies across the economy are racing to show how they will incorporate AI into their existing businesses. Some analysts warn that AI tech bubble may be forming, while chip companies are also increasingly caught up in the geopolitics of the US and China amid tit-for-tat restrictions on semiconductor exports.
Nivadia had struggled in 2022 with a slowdown in demand for its graphics chips. It also failed to buy UK-headquartered chip designer Arm from Japan’s Softbank, after competition regulators blocked the deal. However, its share price is almost certain to surpass its previous all-time high from late 2021 when US markets open on Thursday.
On Wednesday,
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