How Nvidia Overtook Apple To Become World's Most Valued Company

Nvidia surpassed Apple as the world's biggest and most valuable company for the second time. The chip company's market cap rose 3 per cent to $3.43 trillion, while Apple settled for $3.4 trillion on Tuesday. Before this, Nvidia took over Apple to become the most valuable publicly traded company for a brief time in June, riding on high chip demand in the artificial intelligence-focused market.

The company's shares have nearly tripled in 2024, boosted by investors who are confident about the company's strategy to maintain its growth rate in the chip business. Nvidia is the world's leading supplier of graphics processing units, or GPUs, which power from a PC to a data centre to foundational language models used in AI software such as OpenAI's ChatGPT. The company's stock surged by over 2,700 per cent in the last five years, while its revenue more than doubled in each of the past five quarters.

But what does Nvidia do and how did it beat Apple in its game?

Founded in 1993 by engineers Jensen Huang, Chris Malachowsky, and Curtis Priem, Nvidia aimed to disrupt the gaming market through its proprietary 3D graphics customised for PC gaming. Its early products, such as the RIVA series, were a runaway hit in the gaming community. However, the release of Nvidia's first GPU, GeForce 256, revolutionised the gaming industry through its transformative and lighting (T&L) capabilities that boosted consumer-facing hardware and offered a high-grade visual experience on PCs.

Nvidia's popularity and market dominance picked up steam after the company started focusing on AI chips. In 2006, it unveiled CUDA, a parallel computing platform and application programming interface (API) that allowed leveraging GPU's power for general-purpose computing. That opened new ways for different industries to rely on Nvidia's powerful GPUs where researchers, scientists, and technicians in other fields could harness parallel processing capabilities for complex tasks, such as deep learning and machine learning. This became the foundation for AI companies, which used Nvidia's chips in data centres to handle massive workloads. Nvidia is one of the biggest GPU and chip suppliers to the AI industry.

The demand for high-grade GPUs and chips for AI processes and handling related data centres propelled Nvidia to churn out more chips, causing a surge in the company's business.

On the other hand, Apple's focus on consumer-facing products could not reap benefits as much as Nvidia's deals with businesses. When Apple began building its artificial intelligence, it invested heavily into the development of technologies, with merely expectations that the demand in the market for AI could boost sales of iPhone and other products. However, there is no guarantee Apple Intelligence would take off and bring returns. Meanwhile, Nvidia's investment into building AI-centric technologies are paying off.

Nvidia is also working with a slew of Indian companies to build data centres and technologies in the country. Last year, the chip company announced a partnership with Reliance Industries to build AI infrastructure in India, which will help the latter build India's own foundational language models to boost local AI growth.