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Nvidia has become the world's first $5tn company, just three months following this tech leader first broke through the $4 trillion market value barrier.

In comparison, Nvidia’s worth exceeds the GDP of India, Japan and the United Kingdom, as reported by IMF data.

Shortly after US stock markets began trading on Wednesday, Nvidia’s stock reached over $207 with 24.3bn available shares, putting its market capitalization at $5.05 trillion.

Strong demand for Nvidia’s processors, regarded as the most cutting edge in powering AI products and software, is the primary driver that the share value has increased so rapidly since early 2023.

The wider US stock market has reached new peaks recently, buoyed up by massive funding in artificial intelligence.

Major Announcements and Strategic Moves

Earlier this week, Nvidia’s Chief Executive, Jensen Huang, disclosed $500bn in processor contracts.

The company also unveiled a partnership with Uber on autonomous taxis and a $1 billion investment in the telecom firm, with the parties aiming to work together on 6G technology.

In addition, Nvidia is teaming with the US Department of Energy to build seven new advanced computing systems.

Recently, Nvidia announced that it will invest $100 billion in OpenAI as within a partnership that will include at least 10 gigawatts of AI computing facilities to ramp up the processing capacity for the owner of the artificial intelligence chatbot ChatGPT.

In August, Huang said Nvidia was exploring a prospective computer chip tailored to the Chinese market with the former U.S. government.

Donald Trump said on Air Force One that he would discuss with the China's leader, Xi Jinping, about Nvidia’s technology later this week.

AI Boom and Economic Significance

Reaching this milestone highlights the transformation caused by an artificial intelligence craze that is considered the most significant change in technology since the tech pioneer Steve Jobs unveiled the original smartphone nearly two decades back.

Apple capitalized on the iPhone’s success to become the first publicly traded company to be valued at $1 trillion, $2 trillion and eventually, $3tn.

Risks and Warnings

But there are concerns of a potential tech bubble, with officials at the Bank of England earlier this month flagging the growing risk that tech stock prices driven by the artificial intelligence surge could burst.

IMF’s managing director has raised a similar alarm.