Nvidia has become the first company to reach $5 trillion in market value amid a global artificial intelligence arms race.

The chipmaker surge on Wednesday came only three months after the company topped the $4 trillion mark.

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The milestone underscores the company’s swift transformation from a niche graphics-chip designer into the backbone of the global AI industry, turning CEO Jensen Huang into a Silicon Valley icon and making its advanced chips a flashpoint in the tech rivalry between the US and China.

Since the launch of ChatGPT in 2022, Nvidia’s shares have climbed 12-fold as the AI frenzy propelled the S&P 500 to record highs, igniting a debate on whether frothy tech valuations could lead to the next big bubble.

The new milestone would surpass the total cryptocurrency market value and equal roughly half the size of Europe’s benchmark equities index, the Stoxx 600 index .

“Nvidia hitting a $5 trillion market cap is more than a milestone; it’s a statement, as Nvidia has gone from chip maker to industry creator,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown, which holds shares in the company.

“The market continues to underestimate the scale of the opportunity, and Nvidia remains one of the best ways to play the AI theme.”

Huang unveiled $500bn in AI chip orders on Tuesday and said he plans to build seven supercomputers for the US government.

Meanwhile, President Donald Trump is expected to discuss Nvidia’s Blackwell chip with Chinese President Xi Jinping on Thursday. Sales of the high-end chip have been a key sticking point between the two sides due to Washington’s export controls.

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At current prices, CEO Huang’s stake in Nvidia would be worth about $179.2bn, according to regulatory filings and Reuters calculations. He is the world’s eighth-richest person, as per Forbes’ billionaire list.

Born in Taiwan and raised in the US from age nine, Huang has led Nvidia since founding it in 1993. Under his leadership, the company’s H100 and Blackwell processors have become the engines behind large-language models powering tools such as ChatGPT and Elon Musk’s xAI.

While Nvidia remains the clear front-runner in the AI race, Big Tech peers such as Apple and Microsoft have also crossed $4 trillion in market value in recent months.

Analysts say the rally reflects investor confidence in unrelenting AI spending, though some warn valuations may be running hot.

“AI’s current expansion relies on a few dominant players financing each other’s capacity. The moment investors start demanding cash-flow returns instead of capacity announcements, some of these flywheels could seize,” said Matthew Tuttle, CEO of Tuttle Capital Management.

Nvidia is due to report quarterly results on November 19.

Regulatory pressures

The company’s dominance has drawn global regulatory scrutiny, with US export curbs on advanced chips making it a key pawn in Washington’s strategy to limit China’s access to AI technology.

“Nvidia clearly brought their story to DC to both educate and gain favour with the US government,” said Bob O’Donnell of TECHnalysis Research. “They managed to hit most of the hottest and most influential topics in tech.”

The developer conference on Tuesday also served as a platform for Huang to walk a geopolitical tightrope.

He praised Trump’s “America First” policies for accelerating domestic tech investment, while warning that excluding China from Nvidia’s ecosystem could limit US access to half of the world’s AI developers.

Rivals, including Advanced Micro Devices (AMD) and several well-funded startups, are seeking to challenge Nvidia’s dominance in high-end AI chips, but it remains the industry’s top choice.

On Wall Street, Nvidia’s stock is surging. As of 10:45am in New York (14:45 GMT) the stock is up 5.1 percent from the market open.