The market capitalization of artificial intelligence companies, particularly chipmakers, sharply improved at the end of June. Nvidia Corporation was among the best performers in the market, momentarily overtaking Microsoft Corporation as the most valuable company in the world.
Also Read: Cardano founder Charles Hoskinson raises AI censorship concerns
Nvidia’s share price increased by 27% in June, helping the company achieve a market capitalization of $3.34 trillion. This phenomenal rise enabled Nvidia to overtake Microsoft for a short while in terms of market capitalization. Nvidia’s stock price increased primarily because of its leadership in AI technologies, more specifically, its advanced GPUs that are critical for AI computations.
GPU scarcity propels Nvidia, H100 chip drives trillion-dollar valuation
Nvidia’s advanced GPUs, especially the H100, have become scarce, pushing Nvidia into the trillion-dollar market capitalization. However, in the middle of the month, the stocks underwent some correction as investors took their profits while doubts about high valuations were raised.
The market capitalization of Microsoft also displayed a considerable rise and went up by 7.6% in the month of June, attributable to the company’s strong cloud computing services and constant focus on A.I technologies.
Also Read: OpenAI stops API access in China starting July 9
Recently, Amazon.com Inc. made history by hitting $2 trillion in market capitalization. This has put Amazon as the fifth largest US company to hit this mark with the increased interest in AI technologies. AWS and Amazon’s intelligent customer service are some of the strategic investments that have boosted this growth, showing the market’s trust in AI.
Another company that had a good run in June is Broadcom Inc., whose market capitalization rose by 20%. The rise came especially after the company increased its annual revenue expectation for AI chips by 10% and declared a stock split. This move made Broadcom Inc. one of the most sought-after by investors in the current AI industry due to the company’s strategic concentration on semiconductor technologies for AI.
Tech giants innovate with in-house AI chip development
In response to Nvidia’s market dominance and the increasing costs of GPUs, companies like Microsoft, Meta, OpenAI, Amazon, and Google are stepping up their plans to build their own AI chips.
These firms are working towards minimizing their reliance on third-party vendors and improving the effectiveness of their AI by designing custom solutions. The shift to in-house chip development means that custom AI chips are critical to sustaining competitive advantage in the fast-growing AI market.
Also Read: Korea’s SK Group will invest $58 billion in AI chip manufacturing
Nvidia’s success has created significant competition among semiconductor manufacturers, with companies heavily investing in R&D to produce better and more efficient AI chips and gain market share.
Cryptopolitan Reporting by Brenda Kanana
