NVIDIA's CEO, Jensen Huang, revealed in an interview that the demand for the upcoming Blackwell AI "super chip" is overwhelming. The company has invested $100 million in OpenAI's latest funding round, which is seen as a strategic move to gain insights into OpenAI's chip procurement plans. This collaboration could potentially deepen their partnership, bolstering NVIDIA's position in the AI sector.
Products powered by the Blackwell chip are set to be delivered to major cloud service providers like Oracle, Amazon, Microsoft, and Google later this year. This development is expected to solidify NVIDIA's leadership in the AI market, as it continues to serve tech giants such as Microsoft, Meta, Alphabet, and Amazon.
OpenAI recently announced raising $6.6 billion, bringing its total valuation to $157 billion. Despite NVIDIA's $100 million investment being relatively small compared to its $2.9 trillion market cap, the market views this move as symbolic of NVIDIA's strengthened presence in AI, given the AI investment boom sparked by the launch of ChatGPT in late 2022.
NVIDIA's GPUs remain the top choice for powering large language models like ChatGPT, although competitors are striving to narrow this gap. NVIDIA's shares hit $124.26 before closing up 3.32% at $122.8. Jensen Huang's net worth increased by $3 billion to $107 billion, making him the world's 12th richest person.
Other semiconductor competitors like AMD, Broadcom, and Qualcomm also saw stock increases. However, these gains weren't enough to boost the tech-heavy Nasdaq, which closed down 0.17%, as did the S&P 500, slipping by 0.2%.
While NVIDIA sees positive sentiment, large investors remain cautiously optimistic. According to Bank of America, NVIDIA's relative weight in portfolios is 0.99 times, lower compared to its peers in information technology and communication services. Analysts and finance blogs are speculating whether NVIDIA's stock can surpass its 2023 record in the latter half of 2024.
