How NVIDIA Became the Most Valuable Company in the World: A Deep Dive into Its AI-Powered Rise

On June 18, 2024, NVIDIA made history by surpassing tech giants like Microsoft, Apple, Samsung, and Alphabet to become the most valuable company in the world, with a staggering market cap of $3.34 trillion.

To put this into perspective, NVIDIA could buy the entire Pokémon franchise—the highest-grossing media franchise in history—36 times over.

But how did a company that started in 1993—just over 30 years ago—manage to outperform Apple, a company that successfully sells luxury smartphones to nearly one-third of the world’s population?

Let’s break it down step by step:

1. The Origins of NVIDIA: A Vision at Denny’s Diner

NVIDIA’s story begins in 1993, when Jensen Huang, along with two co-founders, sat down at a Denny’s Diner to discuss a radical idea.

Who is Jensen Huang?

• A Taiwanese-American entrepreneur
• Started as a microprocessor designer at AMD
• Believed the key bottleneck in computing was processing power

During that fateful diner meeting, the trio laid the foundation for NVIDIA, and while the company didn’t have a name yet, the idea was clear—revolutionize computing performance.

Where Did the Name “NVIDIA” Come From?

• The founders stored their early files under “Next Version” (NV)
• They searched for words containing “NV” and found “Invidia”, the Roman goddess of envy
• NVIDIA’s name and green eye logo are inspired by this

This branding would later become significant, as NVIDIA’s GPUs (graphics processing units) would make competitors “green with envy.”

2. The Breakthrough: The Birth of the GPU

In 1999, NVIDIA changed computing forever with the launch of the GeForce 256, the world’s first Graphics Processing Unit (GPU).

What Made GPUs Revolutionary?

• Traditional CPUs (central processing units) process one task at a time
• GPUs, on the other hand, use parallel processing to divide tasks across thousands of smaller cores
• This enabled faster and more efficient graphics rendering

As gaming exploded, NVIDIA quickly became the go-to brand for high-performance gaming graphics cards.

Fun Fact:

The first-ever PC built by millions of gamers likely included an NVIDIA GPU.

But gaming alone wasn’t enough to turn NVIDIA into a $3.34 trillion company.

3. The AI Revolution: How NVIDIA Became the Backbone of Artificial Intelligence

The real turning point for NVIDIA wasn’t gaming—it was artificial intelligence (AI).

The Game-Changer: CUDA (2006)

In 2006, NVIDIA launched CUDA (Compute Unified Device Architecture)—a software platform that allowed developers to harness NVIDIA GPUs for non-graphics-related tasks.

Why Was CUDA a Big Deal?

• It unlocked the full power of NVIDIA GPUs
• It became the default choice for AI researchers, data scientists, and developers
• Enabled AI models, video editing, financial modeling, and even cryptocurrency mining

Because AI algorithms require massive parallel processing, GPUs are perfect for AI training and deep learning—and NVIDIA had the best GPUs on the market.

Today, CUDA is the industry standard, making NVIDIA’s chips the backbone of AI innovation.

4. NVIDIA’s AI Dominance: Who Uses Their Chips?

1. Tesla’s Self-Driving AI

• Tesla’s supercomputer in Texas relies on $50,000 NVIDIA GPUs
• These GPUs power autonomous driving algorithms

2. ChatGPT, Gemini, and AI Chatbots

• AI models like ChatGPT, Gemini, and Claude all run on NVIDIA’s AI chips
• Every time you ask an AI a question, NVIDIA’s hardware is processing the request

3. Cloud Computing (Amazon Web Services, Google Cloud, Microsoft Azure)

• Amazon Web Services (AWS), which powers 30% of cloud-based internet, runs on NVIDIA technology
• Without NVIDIA’s GPUs, major cloud platforms would struggle to meet demand

4. Healthcare & Biotechnology

• AI-powered protein simulations for disease research rely on NVIDIA chips
• Medical imaging and digital twins use NVIDIA’s hardware for accurate diagnostics

5. Film, Gaming & Metaverse

• Hollywood CGI and gaming engines are powered by NVIDIA GPUs
• Future Metaverse projects will also require NVIDIA’s technology

NVIDIA is not just a company—it’s the fuel behind the digital revolution.

5. The AI Boom: Why NVIDIA’s Stock Skyrocketed

The Stock Split That Changed Everything

In June 2024, NVIDIA announced a 10:1 stock split, meaning:

• Each existing share was split into 10 new shares
• While the total investment value remained the same, each share became more affordable

This made NVIDIA stock accessible to more investors, leading to an explosive surge in demand.

Comparison: NVIDIA vs. AMD vs. Intel

As AI demand surged, NVIDIA’s GPUs became the gold standard, securing its position as the leading chip manufacturer.

6. Is AI Overhyped? The Future of NVIDIA

While NVIDIA’s growth has been historic, there are concerns about whether AI is a bubble similar to the dot-com boom.

Key Challenges NVIDIA Faces

• Energy consumption: AI models are power-hungry, and AI servers could consume as much energy as the Netherlands
• Competition from AMD & Intel: Rival companies are developing AI chips to compete with NVIDIA
• Regulatory concerns: Governments may limit AI expansion, affecting growth

However, even if AI demand slows, NVIDIA’s GPUs power the entire digital world, ensuring its long-term relevance.

7. Key Takeaways: Why NVIDIA’s Success Matters

1. NVIDIA revolutionized gaming with the first-ever GPU (GeForce 256)
2. They bet big on AI in 2006 with CUDA—and it paid off massively
3. Their chips now power AI, self-driving cars, cloud computing, biotech, and the Metaverse
4. The AI boom and a strategic stock split fueled their $3.34 trillion valuation
5. Despite AI concerns, NVIDIA remains the dominant force in tech

NVIDIA’s rise isn’t just about graphics cards anymore—it’s about powering the future of technology.

Frequently Asked Questions (FAQs)

1. Why did NVIDIA become the most valuable company in the world?
NVIDIA became the AI industry leader, supplying chips for AI, cloud computing, and self-driving cars, driving demand for its GPUs.

2. What is CUDA, and why is it important?
CUDA is NVIDIA’s software that allows AI developers to maximize GPU power, making NVIDIA the default choice for AI models.

3. Is NVIDIA’s AI dominance sustainable?
While AI is growing rapidly, NVIDIA faces competition from AMD, Intel, and custom AI chips. However, its deep integration into AI and cloud computing makes it difficult to replace.

4. Should I invest in NVIDIA stock?
NVIDIA remains a strong AI and tech player, but investing should be based on market research and risk analysis.

Final Thoughts

NVIDIA’s rise to the world’s most valuable company isn’t just a business success story—it’s a preview of the AI-powered future. Whether AI, gaming, cloud computing, or digital innovation, NVIDIA is leading the way.