NVIDIA's Moment of Truth

By B. Sapoznik

Over the past few months, the global media has been strongly centered around the general motif of AI. ChatGPT, Copilot, DALL-E, and many other models have been surrounding countless industries searching for more ease in generating more productivity. Although, AI models bargaining for more efficiency require more potent hardware in return. This market essential has been explored and used by hardware companies, especially in the development of data storage facilities and computer components. Specifically, AI-sustaining GPUs and CPUs have been considered vital for this new computational era. And so, one of the largest hardware manufacturers of the past years, Nvidia, became extremely demanded – raising the company’s valuation and accelerating its research over the past few months. However, any negative result could impact Nvidia’s future for the worst, and they then faced their moment of truth.


The truth is that Nvidia’s moment of truth hasn’t been a moment, but actually a large timeframe of many years. Ever since the media explosion on AI models, their GPUs have been aggressively sought after, and the company has managed to rise to the occasion. Around 4 years ago, it experienced a major success with Volta and Turning Architectures, which were followed by Ampere architecture in 2020 (featuring GeForce RTX 30 Series). The pandemic was a successful epoch for the company, since the increase in domestic time periods meant people were more exposed to computer usage, requiring more innovative components for computers. Around the same years, Nvidia chips were also demanded on a large scale due to the popularity of cryptocurrencies. Nvidia hardware was frequently used to conduct mining operations, receiving tariffs for blockchain transactions of any cryptocurrencies. The need for cutting-edge hardware in cryptocurrency mining is due to the split-second competition between users to receive blockchain commissions.


Much of Nvidia’s further investments were not only related with creating more prominent future hardware models (like the Hopper Architecture model), but also in datacenters. These same datacenters were later used to train AI models – also using Nvidia hardware devices. Partially, the global explosion of GPTs and generative AI models are somewhat due to Nvidia’s investments and expenditures, which sustained the base for the expansion of AI models. Proof of the company’s relative success can be seen in its financial terms. Its overall revenue in 2024 has reached over U$D 60.92 billion, a surprising increase compared to its U$D 26.97 billion revenue from 2023. Simultaneously, Nvidia has become the most valuable company in terms of market cap (estimated around U$D 3.6 trillion), surpassing all other major technology companies.


This has been Nvidia’s moment of truth. The past few years have been a stage for global outbreaks in technological advancements. From gaming to crypto to AI, Nvidia has always been there, testing and releasing new models – adapting for the present and future requirements of society. Even in the past few months, the company has been able to develop other innovations to their products. The launch of Grace Architecture model for CPUs and GPUs is just another expansion of the company’s arsenal, contributing to their relevance in the industry. This, of course, has been a product of many years of investment, research, and preparation from the company. However, its actions are still creditable, since it has been in the spotlight in technology for the past years. Any flaw committed by the company could lead to a snowballing cascade, plummeting its legacy, leading to the company’s devaluation. However, it can be clearly stated that hitherto, Nvidia has been extremely successful in its moment of truth and is probably an asset worth observing closely for the future.


Bibliography:

• https://pearler.com/explore/learn/blog/nvidia-shares
  
• https://www.thestreet.com/technology/nvidia-company-history-timeline
  
• https://www.investing.com/academy/statistics/nvidia-facts-and-statistics/