NVIDIA Surpasses Microsoft As Most Valuable Company Amid AI Boom

NVIDIA's dominance as an AI chip powerhouse has seen it displace Microsoft as the world's most valuable company

NVIDIA surpasses Microsoft as world's most valuable company
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Published: June 19, 2024

Kieran Devlin

NVIDIA has surpassed Microsoft as the world’s most valuable company thanks to its dominance in the AI boom.

Less than two weeks after displacing Apple for second place in the business world’s answer to sports MVP, the GPU and semiconductor company NVIDIA has now taken the top spot in its overall valuation thanks to its powerhouse position as an AI chip producer, reportedly representing 80 percent of the processor market.

At the close of trading on Tuesday, NVIDIA’s closing share price was $135.58, marking a $4.60 increase from the previous day. Its market value has soared to $3.335 trillion, which means it’s now worth more than the most prominent tech colossi like Microsoft, Apple, and Google.

Analysts have said that a stock split created more shares and made NVIDIA more attractive to individual investors and that the growth in Nvidia’s stock on Tuesday added more than $100 billion to its market value.

Since the start of the year, the value of the company’s shares has shot up by an impressive 160 percent. It had only reached a value of $2 trillion for the first time in February.

NVIDIA reported over $26 billion in revenue in its most recent earnings call ahead of the arrival of its highly anticipated Blackwell GPU architecture, which the company has hyped up as “the world’s most powerful chip”.

In a recent update, NVIDIA CEO Jensen Huang announced that the upcoming Blackwell units will be priced between $30,000 and $40,000. Additionally, the company is committed to innovation, with plans to unveil new AI chips annually, keeping the technology fresh and up-to-date.

The demand for the company’s processors is currently outstripping the available supply. Major tech players like Microsoft, Meta Platforms, and Alphabet (Google’s parent company) are heavily investing in the development of AI computing capabilities, fueling an industry-wide race for technological advancement.

Microsoft’s time at the top has proven short-lived. It had only taken the crown of the most valued company off Apple earlier this year as excitement over its AI investments, including in OpenAI, counter-balanced market concerns over demand for Apple iPhones.

Microsoft And NVIDIA In The AI Race

The common logic is that there’s a thin line between competitors and collaborators in the tech world, and that couldn’t be a more apt description of Microsoft and NVIDIA’s dynamic.

Huang came on stage at last year’s Microsoft Inspire event to discuss the latest developments in NVIDIA and Microsoft’s relationship. Meanwhile, in March, in an expansion of their long-term partnership, Microsoft and NVIDIA revealed powerful integrations utilising the latest NVIDIA Gen AI and Omniverse technologies across Microsoft Azure, Azure AI services, Microsoft Fabric, and Microsoft 365.

Microsoft is also such a tight-knit partner with OpenAI that several antitrust regulators are investigating whether it’s formally something more complex. However, the tech giant is trying to stand on its own two feet with AI long-term, or at the very least come to signify a titan in LLMs and AI processors on its own terms.

In May, The Information reported that Microsoft is building a large new AI model that could potentially compete with OpenAI, Anthropic and Google’s most advanced tech, known internally as MAI-1.

The Information’s sources said that MAI-1 will be overseen by the recently hired Mustafa Suleyman, the Google DeepMind co-founder and former CEO of AI startup Inflection, who is now known as Microsoft AI CEO.

In addition to hiring Suleyman, Microsoft has recruited several employees from Inflection AI, including Hoffman and co-founder Karén Simonyan. Nadella praised Simonyan as “a renowned AI researcher and thought leader” and appointed him as the Chief Scientist of Microsoft AI.

In April, Microsoft also hired former Meta executive Jason Taylor for its AI supercomputing team. Taylor assumes the role of Corporate Vice President and Deputy CEO at Microsoft.

Also in April, Microsoft announced it was opening an AI hub in London. AI scientist Jordan Hoffmann, formerly of Deepmind and Inflection, oversees the new AI hub and will be joined by a group of Microsoft AI team members based in its London Paddington office.

In November, Microsoft also announced it was working on developing its own AI chips to potentially rival NVIDIA, the Azure Maia AI chip and Arm-powered Azure Cobalt CPU, but they haven’t yet been brought to market.

Microsoft hopes that these shrewd hires and new business arms will reaffirm its position as an AI leader, but NVIDIA remains dominant for now in the AI GPU and semiconductor space.

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