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Nvidia has become the world's first $5 trillion firm, just three months after this tech leader initially surpassed the $4 trillion valuation mark.

In comparison, Nvidia’s value exceeds the GDP of Japan, India, and the UK, as reported by IMF data.

Shortly after US stock markets opened on Wednesday, Nvidia’s shares reached $207.86 with 24.3bn shares outstanding, putting its market cap at $5.05 trillion.

Ravenous appetite for Nvidia’s chips, regarded as the most cutting edge in powering AI products and software, is the main reason that the company’s stock price has increased so rapidly since early 2023.

The wider US stock market has hit multiple record highs this week, buoyed up by massive funding in AI technology.

Key Developments and Partnerships

Earlier this week, Nvidia’s CEO, Jensen Huang, revealed $500bn in processor contracts.

The company also announced a collaboration with Uber on autonomous taxis and a $1 billion investment in the telecom firm, with the parties aiming to cooperate on next-generation networks.

In addition, Nvidia is teaming with the US Department of Energy to construct multiple advanced computing systems.

Last month, Nvidia stated that it will invest $100bn in an AI research organization as part of a partnership that will add at least 10 gigawatts of Nvidia AI datacenters to boost the computing power for the owner of the AI assistant ChatGPT.

This past summer, Huang mentioned Nvidia was discussing a prospective processor tailored to the Chinese market with the former U.S. government.

Donald Trump said on Air Force One that he would discuss with the Chinese president, Xi Jinping, about Nvidia’s chips later this week.

Tech Surge and Economic Significance

Hitting the new benchmark highlights the upheaval being unleashed by an AI frenzy that is widely viewed as the most significant change in technology after the Apple co-founder Steve Jobs unveiled the original smartphone 18 years ago.

The tech giant capitalized on the smartphone’s popularity to emerge as the initial listed firm to be valued at $1tn, $2 trillion and eventually, $3 trillion.

Potential Concerns

However, worries exist of a possible AI bubble, with UK central bank representatives earlier this month flagging the growing risk that tech stock prices pumped up by the artificial intelligence surge could burst.

IMF’s managing director has issued comparable warnings.