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Nvidia has become the world's first $5 trillion company, only three months after the Silicon Valley chipmaker initially surpassed the $4 trillion valuation barrier.

By contrast, Nvidia’s value exceeds the GDP of India, Japan and the United Kingdom, according to the International Monetary Fund (IMF).

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

Strong demand for Nvidia’s processors, seen as the top-tier in driving AI products and software, is the primary driver that the company’s stock price has surged dramatically since early 2023.

The wider US stock market has reached multiple record highs this week, buoyed up by massive funding in artificial intelligence.

Major Announcements and Strategic Moves

Earlier this week, Nvidia’s Chief Executive, Jensen Huang, disclosed $500 billion in chip orders.

The company also announced a collaboration with Uber on autonomous taxis and a $1bn funding in Nokia, with the two planning to work together on next-generation networks.

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

Last month, Nvidia stated that it will commit $100 billion in OpenAI as within a partnership that will add at least 10GW of Nvidia AI datacenters to boost the processing capacity for the owner of the artificial intelligence chatbot ChatGPT.

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

Donald Trump remarked aboard his plane that he would speak with the China's leader, Xi Jinping, about Nvidia’s chips later this week.

Tech Surge and Market Impact

Hitting the new benchmark highlights the upheaval being unleashed by an artificial intelligence craze that is widely viewed as the most significant change in technology after the Apple co-founder Steve Jobs unveiled the original smartphone nearly two decades back.

Apple capitalized on the smartphone’s popularity to become the first publicly traded company to be worth $1tn, $2tn and eventually, $3 trillion.

Risks and Warnings

However, worries exist of a potential tech bubble, with UK central bank representatives recently flagging the increasing danger that equity values pumped up by the AI boom could burst.

The head of the IMF has issued comparable warnings.