Nvidia’s Good Fortune Isn’t Good for Everyone Else

Question: Is what’s good for Nvidia also good for America? That old line, originally referring to General Motors, came to mind after the stock market rallied to new records on Thursday—attributed by pundits to investor enthusiasm about Nvidia’s robust earnings. Stock of the AI chipmaker rocketed 17% on Thursday and Friday, lifting its market value briefly above $2 trillion on Friday and confirming its week-old status as the third most valuable U.S. company, behind Apple and Microsoft. 

But Nvidia’s good fortune isn’t necessarily good for everyone else. Yes, the fact that sales at its data center business, where it sells the specialized AI chips that are much in demand, rose 400% in the fourth quarter demonstrates the continued rush of investment into the new technology. Generative AI promises a revolution in how computing works, including cost savings and efficiencies for companies and people. That may be what the market is responding to. But you could make the case that Nvidia’s inability to meet all the demand for its chips has held back AI development. And the high cost of its chips have contributed to the expense of AI development, which tech companies are grappling with.