The Chip Titan: Nvidia breaks $3.6 Trillion Barrier

By Oceana Li

The Lawrenceville School, NJ

On November 7th, Nvidia’s market value exceeded the record high of $3.6 trillion, surpassing competitor tech giants Apple and Microsoft. The chip company now boasts the title of most valuable company, signifying the importance of their products in several fields. This profound growth is the result of recent tech booms and innovations in artificial intelligence.

A semiconductor is a material, most commonly silicon, that controls electrical currents. Under specific conditions, the silicon either allows (conductive) or prevents the flow (non-conductive) of electricity. This material is often used in microchips. Each chip contains switches, known as “transistors”, which regulate the electrical current to produce binary signals. As computers communicate in binary, the properties of these chips are fundamental, leading to the development of electronic devices that could function efficiently and conveniently. Today, semiconductor chips are rudimentary to the operation of almost all electronics.

Semiconductors can be used to execute multiple tasks from storing to calculating data. Most electronic devices rely on memory chips, which create space to hold information for users. In addition to memory chips are microprocessors which function as the “brain” by managing and ensuring tasks are completed for other components. The components of a CPU (Central Processing Unit) are condensed into a single IC (integrated circuit) which have been developed to take up much less space while executing operations in a quick and reliable manner.

Image of a cpu chip semiconductor

Recently, the GPU (Graphics Processing Unit), a type of semiconductor that functions similarly to a microprocessor, has skyrocketed in demand amid the artificial intelligence boom. In 1999, the chip company Nvidia invented the GPU, revolutionizing computer graphics. Its high performance became popular among the gaming industry due to its graphic rendering capabilities as it opened up to new possibilities such as three-dimensional graphics. Similarly, AI advancements require chips that could handle extensive amounts of data in order for computers to carry out complex tasks such as computer vision and machine learning. Tech companies turn to Nvidia, the GPU market leader, to feature the semiconductor companies’ chips in their AI developments and training.

Image from Pixabay of a computer chip

Nvidia first took advantage of the GPU’s data processing capabilities, increasing to a market share of 88% as of July 2024. As the field of artificial intelligence expands, big tech companies rely on the semiconductor company’s chips to develop AI consumer products. In recent months, Nvidia has partnered with global manufacturing partners such as Dell and Lenovo to feature their RTX 500 and 1000 Ada Generation Laptop GPUs. The GPUs are now available and functioning in these PC manufacturers’ products to handle intensive data processing and advanced tasks in generative AI. Nvidia’s GPUs are also utilized in other sectors such as the automobile and healthcare industry, pioneering innovations from self-driving vehicles to extensive medical image processing.

Inevitably, Nvidia will play a significant role in the rise of artificial intelligence. As the field continues to expand, semiconductors become increasingly essential to products in daily life. Nvidia’s recent surpassing of $3.6 trillion market value emphasized this trend. This demand upholds the chip company’s success and development as their products are highly used in technological innovations. However, because their success is dependent on tech booms in AI, the company’s longevity is not ensured. Tech giant competitors and the overall physical and ethical limitations of AI also threaten the semiconductor industry. Nonetheless, experts predict that artificial intelligence will become progressively applicable while regulated in the coming decades, guaranteeing the success of the semiconductor industry.

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