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Nvidia has become the world's first $5tn firm, just three months after the Silicon Valley chipmaker initially surpassed the $4 trillion valuation mark.

By contrast, Nvidia’s value is greater than the GDP of India, Japan and the United Kingdom, according to the International Monetary Fund (IMF).

Shortly after US stock markets began trading this Wednesday, Nvidia’s shares touched $207.86 with 24.3bn shares outstanding, placing its market cap at $5.05 trillion.

Ravenous appetite for Nvidia’s processors, regarded as the top-tier in driving artificial intelligence software and tools, is the primary driver that the company’s stock price has surged dramatically from the start of last year.

American equities has reached new peaks this week, supported by massive funding in AI technology.

Major Announcements and Partnerships

On Tuesday, Nvidia’s CEO, Jensen Huang, disclosed $500bn in processor contracts.

The company also unveiled a collaboration with the ride-hailing service on robotaxis and a $1 billion funding in the telecom firm, with the parties aiming to cooperate on next-generation networks.

In addition, Nvidia is joining forces with the US Department of Energy to build seven new advanced computing systems.

Last month, Nvidia stated that it will invest $100 billion in OpenAI as within a partnership that will add at least 10GW of AI computing facilities to ramp up the computing power for the owner of the artificial intelligence chatbot ChatGPT.

This past summer, Huang said Nvidia was exploring a potential new computer chip tailored to the Chinese market with the Trump administration.

Donald Trump said on Air Force One that he would speak with the China's leader, Xi Jinping, about Nvidia’s chips on Thursday.

AI Boom and Economic Significance

Reaching this milestone puts more emphasis on the transformation caused by an AI frenzy that is widely viewed as the biggest tectonic shift in the tech sector since the tech pioneer Steve Jobs introduced the first iPhone nearly two decades back.

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

Potential Concerns

However, worries exist of a potential tech bubble, with officials at the Bank of England earlier this month flagging the growing risk that tech stock prices driven by the artificial intelligence surge could burst.

IMF’s managing director has raised a similar alarm.