See how Nvidia became one of the world’s most valuable companies

For most of its three decades of existence, Nvidia was mostly a niche player, making computer chips for video games, but the company’s central position in the artificial intelligence boom has led to a spectacular rise.

Nvidia sells the graphics processing units (GPUs) and the software crucial to training and running the AI algorithms that power chatbots and image generators.

Here’s how Nvidia became one of the world’s most valuable companies.

• Date: Jan. 22, 1999
• Market cap: Less than $1 billion

Nvidia went public in January 1999 at $12 a share, six years after its founding and a year before the dot-com crash would wipe out much of the stock market value of the burgeoning internet industry. The company was building a reputation for making some of the best chips for video games and in 2001, it won a contract to supply GPUs for Microsoft’s Xbox gaming console.

• Date: Nov. 4, 2021
• Market cap: $743.8 billion

Nvidia had long been traded by professional investment firms, but during the pandemic, millions of people with day jobs got into stock investing through apps such as Robinhood and online forums like Wall Street Bets. Gamers-turned-retail investors recognized Nvidia as the company that helped power the improvement in video game graphics over the past two decades.

In 2021, Facebook rebranded itself as Meta and brought renewed interest in the concept of the metaverse — a future where people spend much of their time plugged into a virtual world. Nvidia chief executive Jensen Huang jumped on the idea, and said that his company’s chips would power the future world of the metaverse. He even used a digital clone of himself speaking at Nvidia’s annual conference to showcase the tech.

Meta’s grand plans for the metaverse have yet to pan out, but at the time, some investors were betting it was the next big thing. On Nov. 4, 2021, financial analysts from Wells Fargo published a report detailing how Nvidia was well-positioned to benefit from the prophesied metaverse boom, and the stock jumped 12 percent.

• Date: Feb. 22, 2023
• Market cap: $582.3 billion

At the end of 2022, OpenAI, an artificial intelligence lab founded as a nonprofit in 2015 uneiled ChatGPT. It was more capable than any chatbot that regular people had interacted with yet. The tech industry was enthralled, and within months, Microsoft had invested billions into OpenAI. The AI arms race was on.

Nvidia’s chips and software are crucial to building the “large language models” that serve as the underlying technology in ChatGPT and image generators like OpenAI’s Dall-E 3, which launched in 2023.

Huang told investors on Feb. 22, 2023 that the company stood to benefit from the AI boom, which was quickly gaining steam. Wall Street was convinced and the stock shot up 14 percent to give the company a total value of $582.3 billion.

Picks and shovels for the AI gold rush

• Date: May 24, 2023
• Market cap: $1 trillion

Nvidia’s stock kept climbing. In May 2023, Nvidia reported earnings showing for the first time with real numbers that it was a prime beneficiary of the AI frenzy. The stock jumped 25 percent and the company’s valuation briefly crossed $1 trillion, one of only a handful of companies to ever reach that mark.

As the company reported higher revenue numbers, more investors piled in, pushing the stock up until it ended the year worth $1.2 trillion. Because many AI start-ups and companies, including OpenAI, are not public, there were few options for regular people to invest in the AI boom. Many bought Nvidia stock.

Big Tech spends even bigger

• Date: May 22, 2024
• Market cap: $2.6 trillion

In the first quarter of 2024 Nvidia’s revenue rose to $26 billion from only $7.2 billion in the same period a year before.

AI start-ups, companies trying to add AI to their products and venture capital firms are all trying to get their hands on Nvidia’s chips, driving up their price. But the biggest buyers are Big Tech companies Microsoft, Amazon, Meta and Google that need the chips to build and train their own AI models.

Earlier this year, Microsoft, Meta and Google told their investors they would increase spending on AI investments. Google alone plans to spend at least $12 billion every four months this year. Much of that money is going straight into Nvidia’s coffers.