Enthusiasm for AI makes Nvidia the third most valuable company in the world

Nvidia, a Californian software company, became the third most valuable company in the world thanks to enthusiasm for artificial intelligence (AI). Through what was defined as AI "factories," sales and net profits exceeded all Wall Street estimates.

According to its data for the last quarter, the company reported earnings of $6.12 per share and sales of $26 billion.

In turn, as reported by Forbes, Nvidia's profits and revenue increased by 628% and 268%, respectively, compared to the same period in 2023, making it the most profitable quarter in the company's history. As for net profits, they totaled $14.88 billion, compared to $2 billion the previous year.

"Artificial intelligence factories"

What is the reason for this explosion in income? Financial growth was primarily driven by the division of its data centers into AI, which generated $22.6 billion in revenue last quarter.

Its CEO, Jensen Huang, simplified the reasons by discussing "artificial intelligence factories." "AI will bring significant productivity gains to nearly every industry and help companies be more cost- and energy-efficient," he said.

Nvidia and ChatGPT

The Californian company's sales benefited immensely from the appearance of ChatGPT from OpenAI. Indeed, the company Elon Musk and Sam Altman founded used thousands of artificial intelligence chips to create this disruptive tool. As if that were not enough, there are few alternatives for implementing these systems, which favored Nvidia even more. In other words, the company was responsible for the infrastructure in which ChatGPT was born.

"Big tech companies and AI startups have since been scrambling to buy as many of Nvidia’s chips as possible, leading to a shortage that company executives expect to persist through this year and into next year," they explained in The Wall Street Journal.

Nvidia's new bet

Determined to stay competitive, the company announced that it will launch a new generation of AI chips by the end of the year.

"Those chips, code-named Blackwell, are set to cost more than $30,000 each, setting the stage for a further surge in sales if the appetite for AI chips stays strong and Nvidia fends off challenges from competitors and regulators," they added in the WSJ. Blackwell would be even more advanced than the IA H100, currently the company's flagship chip.

Although the launch is still a few months away, many interested buyers already exist, including Tesla, Meta Platforms, and other companies in the field.

Production of these coveted chips is already underway, and shipments are expected to begin in the year's second quarter so that they will be working by the last quarter of 2024. Nvidia does not manufacture them directly, so it outsources its production to Taiwan Semiconductor Manufacturing.