Nvidia’s 2024 valuation surge was closely linked to demand for GPUs used in artificial intelligence.
Nvidia designs graphics processing units, or GPUs, that can perform many calculations in parallel. Although GPUs were first associated with computer graphics and gaming, they became central to training and running large artificial-intelligence models because of their parallel-processing capability.
Demand for Nvidia’s data-center products rose sharply as cloud providers and AI developers invested in computing infrastructure. Investors responded by bidding up Nvidia’s shares, causing its market capitalization to join the world’s highest-valued companies.
Nvidia does not manufacture every chip in its own factories. It uses a fabless semiconductor model and relies on specialist manufacturing partners, including Taiwan Semiconductor Manufacturing Company. This distinction often causes confusion: Nvidia designs major AI chips, while other companies fabricate many of them.