Nvidia’s valuation has swelled to $5.05 trillion, a figure so vast it now exceeds the Gross Domestic Product (GDP) of major developed nations. This historic high has transformed the company from a Wall Street darling into a matter of global economic stability.
The sheer scale of the valuation is at the center of an intense “boom or bust” debate. Can one company truly be worth more than the entire economic output of countries like the UK or France?
Proponents of the “boom” say yes. They argue this is the dawn of the AI age, and Nvidia provides the essential tools. They cite the $1F trillion growth in just three months, a half-trillion-dollar order book, and massive deals with OpenAI ($100 billion), Uber, Nokia, and the US government.
However, this unprecedented size has regulators and economists on high alert. The Bank of England and the IMF have both issued formal warnings about an AI bubble, fearing a crash could have global repercussions.
Skeptics point to worrying signs beneath the surface. The $100 billion OpenAI deal is seen by some as “circular” inflation. More critically, analysts note that “nearly all AI pilot programs in businesses fail,” suggesting the demand for chips is based on speculative hope, not economic reality. When a bubble gets this big, its bursting is a global event.