Nvidia officially became the world’s first $5 trillion company on Wednesday, a milestone fueled by an explosive boom in artificial intelligence. With shares hitting $207.86, the chipmaker’s $5.05 trillion valuation now eclipses the individual economies of India, Japan, and the UK.
The appetite for Nvidia’s AI chips, considered the most advanced, is the primary driver. This demand saw the company’s value leap from $4 trillion to $5 trillion in a mere three months. The U.S. stock market has been riding this wave, posting multiple record highs as AI investment expands across the board.
However, this unprecedented ascent is sparking serious concerns of a dangerous bubble. The Bank of England and the IMF have both recently raised alarms, warning that tech stock prices pumped up by AI hype could be heading for a burst. The situation is being compared to the dot-com bubble, but on a much larger scale.
Skeptics point to the “circular” nature of the industry’s financing. For example, Nvidia’s landmark $100 billion investment in OpenAI is directly tied to OpenAI’s plan to purchase millions of Nvidia’s own chips. This feedback loop worries analysts.
Furthermore, there is growing concern that the massive corporate spending on AI is not generating tangible returns. Analysts note that companies are “failing to secure revenue” from their AI investments, and recent reports suggest that “nearly all AI pilot programs in businesses fail,” suggesting the $5 trillion valuation may be built on hype rather than solid business fundamentals.