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Nvidia has become the world's first $5tn company, just a quarter after this tech leader first broke through the $4tn valuation barrier.

In comparison, Nvidia’s value exceeds the gross domestic product of India, Japan and the United Kingdom, according to the International Monetary Fund (IMF).

Soon after American exchanges opened on Wednesday, Nvidia’s stock reached $207.86 with 24.3bn shares outstanding, putting its market cap at $5.05tn.

Strong demand for Nvidia’s processors, regarded as the top-tier in driving artificial intelligence products and software, is the primary driver that the company’s stock price has surged dramatically from the start of last year.

The wider US stock market has reached multiple record highs recently, buoyed up by expansive investment in artificial intelligence.

Major Announcements and Partnerships

Earlier this week, Nvidia’s CEO, Jensen Huang, revealed $500 billion in chip orders.

The company also unveiled a partnership with Uber on autonomous taxis and a $1bn investment in the telecom firm, with the parties aiming to work together on next-generation networks.

In addition, Nvidia is joining forces with the US Department of Energy to construct multiple AI supercomputers.

Last month, Nvidia stated that it will commit $100bn in OpenAI as within a partnership that will include at least 10 gigawatts of Nvidia AI datacenters to boost the computing power for the owner of the artificial intelligence chatbot ChatGPT.

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

Donald Trump said aboard his plane that he would discuss with the Chinese president, Xi Jinping, about Nvidia’s chips later this week.

AI Boom and Market Impact

Reaching this milestone puts more emphasis on the upheaval being unleashed by an AI frenzy that is considered the most significant change in technology since the Apple co-founder Steve Jobs unveiled the first iPhone 18 years ago.

Apple capitalized on the smartphone’s popularity to emerge as the first publicly traded company to be valued at $1 trillion, $2 trillion and finally, $3tn.

Risks and Warnings

But there are concerns of a possible AI bubble, with UK central bank representatives earlier this month pointing out the growing risk that equity values pumped up by the artificial intelligence surge might collapse.

IMF’s managing director has issued comparable warnings.