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What’s the craze for AI? Just days after becoming the darling of the entire world, it’s turned into a bloodbath for one company.
Just days after becoming the darling of the entire world, it’s turned into a bloodbath for AI tech chip manufacturer Nvidia. But fast forward several days and it’s been an absolute slaughter for the AI company. As of Tuesday morning, less than a week after its rise to glory, Nvidia’s stock fell 6.7 per cent.
That was its third straight drop on the stock market and its largest single fall in a day since April. Some commentators say the company is dragging down the NASDAQ amid its temporary fall from grace.
In all, with the past three days factored in, about $646 billion ($US430 billion) of Nvidia’s valued has been wiped out of existence.
That’s the biggest value that has been erased in the space of three days for any company in the history of the world, according to data compiled by Bloomberg.
At market close on Monday US time, Nvidia’s market cap had sunk to $4.36 trillion ($US2.9 trillion).
Regardless, Nvidia’s rise to power is still unprecedented.
Nvidia shares have risen more than 190 per cent over the past year.
And of that, 30 per cent of its value has come from the past three months alone.
Nvidia’s US CEO and founder Jensen Huang has made the most of the company’s rise to cash in.
He has reportedly selling shares worth a total of about $143 million ($US95 million) between June 13 and June 21.
Nvidia has been in business for 30 years but its name isn’t as well known to consumers, as the company isn’t quite as customer facing as businesses like Apple or Microsoft.
Nvidia’s CEO Mr Huang established Nvidia in 1993 on his 30th birthday to bring three-dimensional graphics into the gaming and multimedia markets.
The Taiwanese-born tech whiz — who moved to Kentucky at age 9 — reportedly dreamt up the chip giant alongside fellow engineers Chris Malachowsky and Curtis Priem at a Denny’s restaurant in San Jose, California, where he had worked part-time before getting his masters degree from Stanford University.
It was mostly an obscure business, though well known in the gaming world because of its GPU devices.
But in recent years, Nvidia branched into the AI space with its chips, and has enjoyed massive demands for its products.
That growth was driven by the surge of interest in artificial intelligence and the expected demand for its computer chips that process it.
In a sign of its eye-watering rise to power, only last year did Nvidia manage to reach a market cap of $US1 trillion.
It was just shy of the exclusive $1 trillion club.
But now it has joined the ranks of elite businesses and overtaken them all.
AP-AFP
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