As a species, human beings have always been deeply innovative. Each major innovation has led to a reimagining of how we live. In the early 1900s, Albert Einstein’s theories of relativity exploded our minds by explaining gravity, space and time. In 1941, the cultivation of penicillin for therapeutic use on humans exponentially helped the fight against disease and increased life spans. In the contemporary era, especially in the last few years, it is innovations in artificial intelligence (AI) that will transform what constitutes intelligent life. For, soon, human beings will not be the only source of intelligence.
The developments in AI, especially generative AI, are transforming our conceptions of “work”, “worker” and “expertise”. In this column, I have written multiple articles on AI, and its deployment in many areas from legal adjudication to medical surgeries. There is a need for legal regulation without hampering innovations in AI. Therefore, it is entirely unsurprising to see that globally, the most rapid growth in market capitalisation in the past 12 months has been in Nvidia — a company that is fuelling the growth of advanced AI. Perhaps, Nvidia is an indicator of what kind of company will be the most valuable in the future.
For readers who do not know, Nvidia is the world’s leading producer of graphics processing units (GPUs) and semiconductor chips used in AI systems. It reportedly controls about 80 per cent of the market, and each chip is estimated to cost thousands of dollars. How sought after are these GPUs? Mark Zuckerberg recently remarked that his company Meta will be placing an order for 3,50,000 of Nvidia’s H100 chips by the end of this year. This one order itself will be worth billions of dollars. Nearly every large tech company needs GPUs. Do the math!
It was technology-based companies that shattered the domination of traditionally natural resource-based (oil or gas) or large manufacturing behemoths in the list of the world’s highest market-capitalised companies. In 2024, Forbes’ list of top five companies has Microsoft with a market capitalisation of $3.085 trillion at number one. This is followed by Apple ($ 2.889 trillion), Saudi Aramco (the only oil and gas company in the top 10), Alphabet (Google) and Amazon. Four of the world’s most valuable companies are technology-based.
Importantly, Nvidia with its then market cap of $1.784 trillion was the sixth most valuable company, followed closely by Mark Zuckerberg’s Meta. Nvidia was founded in April 1993 by three innovative people — an electrical engineer, a microprocessor designer and a graphic chip designer — in a meeting at a roadside diner in San Jose, California. Apple, Microsoft and other traditional tech companies were founded in the mid-1970s. Their journeys to the highest market capitalisations had taken a steady few decades. Nvidia’s has been a little more dramatic. As The Wall Street Journal (WSJ) notes, Nvidia’s first trillion dollars as a public company took 24 years to earn. But it took the company a mere eight months to achieve a two trillion market capitalisation, given that it’s now powering the AI revolution.
Nvidia’s initial foray into the human mind was through video games. Video games marry accelerated computing with lucrative market demand. The company’s graphics-based processing became its calling card for this market. The WSJ reports that the “ability to secure GPUs governs how quickly companies can develop new artificial intelligence systems. Companies tout their access to GPUs to recruit AI workers.” Nvidia’s CEO, the rather high-profile Jensen Huang, is a Taiwanese American electrical engineer whose preferred outfit is a well-cut leather jacket over casual pants.
Today, Nvidia’s GPU chips are used in generative bots like OpenAI’s ChatGPT and by companies like Microsoft and Amazon. Like most tech companies, Nvidia has an India presence with 4,000 employees and new tie-ups with major Indian corporations. The company employs around 29,600 workers globally.
Last week, Nvidia’s shares had shot up to $807.90 before falling slightly to $788.17. When it crossed the $800 per share mark, Nvidia became a two trillion dollar company. This year alone, its shares have appreciated by 59 per cent. Of course, not everything AI will have an easy innovation or easier profit generation journey. There will be hiccups.
Last week, Google’s Gemini AI image generation tool was withdrawn from the market. It was apparently giving unpopular and inaccurate answers, producing allegedly “ahistoric images” and blocking requests for depictions of White people. Amongst the issues that Gemini seemingly had was that it was generating historically White-dominated scenes with racially diverse…
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