Nvidia founder and CEO Jensen Huang has overtaken Indian business tycoons Mukesh Ambani and Gautam Adani on the Bloomberg Billionaires Index in terms of net worth. Jensen’s wealth grew by US$71.1 billion YTD, according to data as of Tuesday. Thus, Jensen has reached the 12th position on this list with a net worth of 115 billion US dollars. Mukesh Ambani is at number 13 with a net worth of US $113 billion and Gautam Adani is at number 14 on the list with a net worth of US $107 billion. Companies like Google and Microsoft seem to fear NVIDIA and everyone is talking about it. But do you know what NVIDIA does? And why has Goldman Sachs called it the most important stock on the planet? Let’s understand in detail.
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What does NVIDIA do, why is this name in discussion?
Nvidia’s core business is making chips for complex computing. Complex computing includes tasks such as high-quality video editing, high-resolution gaming, architectural designing on computers, auto-drive cars made by Tesla, VFX and graphic designing used in films. Since such tasks use heavy graphics, only the CPU (Central Processing Unit) in a computer cannot handle this. This requires the computer to have a chip that can handle the graphics load and the Nvidia GPU (Graphics Processing Unit) works. GPUs are now also used in data centers, artificial intelligence (AI) and building software ecosystems. So NVIDIA also provides these features. So all in all, NVIDIA chips have to be used wherever a complex task is to be performed on a computer.
What are market experts saying about the company of the future?
From Apple to Microsoft and Google to Meta, everyone is talking about AI today. The world is realizing the importance of artificial intelligence and no company wants to be left behind in this race. Developing AI requires a lot of data and to store that data, a data center is required. Now that Nvidia makes both chips and data centers used for AI development, everyone is busy chanting Nvidia’s name these days. NVIDIA experienced the AI race in which the world is running today. This is why Nvidia controls 80% of the AI chip market today.
There is no competition, margins are increasing rapidly
Currently, there are only 8 companies worldwide with a valuation of more than 1 trillion, of which 7 are from the US and one is from Saudi Arabia. Nvidia is also a name among these seven companies. The reason behind Nvidia’s rapid growth is the company’s vision. Company founder and CEO Jensen Huang started working on these things in 2006. When the world realized the power of AI only in the year 2016. A computer is a tool that increases the productivity of an individual or a company. Artificial intelligence has improved this capability manifold. Now as the demand for AI is increasing rapidly, NVIDIA is getting so many orders that it is not even able to keep up with the supply. So, now the prices of every product are skyrocketing and due to this the company is directly benefiting. That means at this time the profit margin of the company is very high and there is no competition.
What are the prospects for Nvidia in the future?
Now a question also arises whether companies like Apple, Meta, Microsoft and Tesla will always continue to take services from Nvidia? Apparently, all these big companies are working on making their own data center and graphics chips. But it will take at least 5 years for them to develop the level of technology required for artificial intelligence development. Until then, these biggest companies in the world will have to keep getting services from NVIDIA. By the time all these companies do something in this area, there is a good chance that NVIDIA will have revolutionized the world of complex computing so much that companies in the technical sector will continue to depend on it. This means Nvidia will always have an edge in this area.
The rise of Nvidia, how it became the market leader?
In 1993, Jensen Huang formed this company with two of his friends, Chris Malachowski and Curtis Prim. Huang, the owner of this company established in California, USA, saw the future of computers at that time. He realized the importance of graphics in the world of computing and at that time started working on advanced graphics processing capabilities. He began building a chip that could meet the complex needs of 3D graphics. From the beginning, NVIDIA was working on creating powerful GPU (Graphics Processing Unit) and over time, when the demand for good graphics in computers increased, the company hit the jackpot. Since then till date, Nvidia has been growing steadily.