Nvidia’s Dominance in AI Technology
Nvidia (NASDAQ: NVDA) has emerged as the world’s most valuable public company, with a remarkable increase of $3.9 trillion in market value since the start of 2023. The company’s graphics processing units (GPUs) are integral to AI data centers, accounting for over 90% of the GPUs deployed in this sector. Nvidia’s CEO, Jensen Huang, oversees an aggressive innovation strategy aimed at maintaining Nvidia’s competitive advantage by introducing advanced GPUs annually.
However, as Nvidia introduces new GPU generations, concerns arise about the potential rapid depreciation of older chips like Hopper and Blackwell. If these older models lose significant value sooner than expected, companies may delay hardware upgrades, impacting future demand for Nvidia’s latest products. The ability of Taiwan Semiconductor Manufacturing to keep pace with the growing GPU market could also lessen Nvidia’s current pricing power.
