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Nvidia has become the world's first $5 trillion firm, only a quarter following this tech leader initially surpassed the $4 trillion market value barrier.

In comparison, Nvidia’s worth exceeds the gross domestic product of Japan, India, and the UK, according to IMF data.

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

Strong demand for Nvidia’s chips, seen as the top-tier in driving artificial intelligence software and tools, is the main reason that the share value has increased so rapidly from the start of last year.

The wider US stock market has reached new peaks this week, supported by massive funding in AI technology.

Major Announcements and Partnerships

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

Nvidia also unveiled a partnership with the ride-hailing service on robotaxis and a $1 billion investment in the telecom firm, with the parties aiming to work together on next-generation networks.

In addition, Nvidia is teaming with the American energy agency to construct seven new advanced computing systems.

Recently, Nvidia announced that it will invest $100bn in an AI research organization as part of a joint effort that will add at least 10 gigawatts of Nvidia AI datacenters to boost the computing power for the owner of the AI assistant ChatGPT.

This past summer, Huang mentioned Nvidia was exploring a potential new processor tailored to China with the Trump administration.

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

Tech Surge and Market Impact

Hitting the new benchmark puts more emphasis on the upheaval being unleashed by an artificial intelligence craze that is widely viewed as the biggest tectonic shift in the tech sector after the tech pioneer Steve Jobs unveiled the original smartphone 18 years ago.

Apple capitalized on the iPhone’s success to emerge as the initial listed firm to be valued at $1tn, $2 trillion and eventually, $3 trillion.

Potential Concerns

But there are concerns of a possible AI bubble, with UK central bank representatives earlier this month pointing out the growing risk that tech stock prices pumped up by the artificial intelligence surge might collapse.

The head of the IMF has raised a similar alarm.