Nvidia reaches $1 trillion market value, becoming first chip company to do so
Nvidia, an artificial intelligence and chip company headquartered in California, hit a $1 trillion market value on Tuesday, making it the first chip company to do so, according to Reuters.
The company's stock rose 4.4% on Tuesday morning and about 25% over the past week. The reason? The demand for AI. The company engineers "the most advanced chips, systems, and software" for AI. Shares are now worth around $408.
Nvidia is the leader in making AI chips, but some experts say that is overvalued, according to Forbes.
Last week, the company forecast their second-quarter revenue to be more than 50% above Wall Street estimates, leading analysts to increase their price targets, according to Reuters. The company said it is boosting production of the chips, which are used in products like ChatGPT, the AI bot that can complete tasks and answer questions with impressive accuracy.
In an interview with Reuters, Nvidia Chief Executive Officer Jensen Huang said the company began producing new AI chips in August and the increasing popularity of AI led to a steep demand increase by January.
"We had to place additional orders, and we procured substantially more supply for the second half" of 2023, Huang said.
With a $1 trillion value, Nvidia joins the ranks of other tech companies like Google, Apple and Microsoft. In fact, it would be the sixth highest valued public company, according to Forbes.
Apple comes in at number one, worth an estimated $2.79 trillion. In 2022 it was the first company to reach a $3 trillion value, according to Forbes.
On CBS News' "Face the Nation" on Sunday, President and Vice Chair of Microsoft Brad Smith said he expects the U.S. government to regulate artificial intelligence in the year ahead.
Some tech executives, including Elon Musk, have urged for the regulation of AI, which is used in systems like Google's Bard and even Roombas. During a hearing for the Senate Judiciary's Subcommittee on Privacy, Technology and the Law, Sam Altman, the CEO of the company behind ChatGPT, said artificial intelligence could "go quite wrong."
"If this technology goes wrong, it can go quite wrong," he said. "We want to be vocal about that. We want to work with the government to prevent that happening. But we have to be clear-eyed about it."