How Microsoft and Nvidia bet correctly to leapfrog Apple
How did Nvidia briefly become the world's richest company?
Nvidia briefly became the world's richest company due to its strong position in the artificial intelligence industry. The company's chips are unmatched in producing processors that power AI systems, including for generative AI, the technology backing OpenAI's ChatGPT that can create text, images, and other media. Nvidia's market capitalization reached $3.34 trillion, surpassing Microsoft and Apple.
What key factors propelled Microsoft and Nvidia's success?
Microsoft and Nvidia's success can be attributed to their early investments in AI and their foresight in recognizing its potential. Microsoft started investing in OpenAI, the creator of ChatGPT, back in 2019, while Nvidia CEO Jensen Huang pushed his company towards AI chip development many years before the AI boom. Both companies took a long-term bet on AI, and so far, it has paid off.
When did Microsoft begin investing in OpenAI?
Microsoft began investing in OpenAI in 2019, with an initial investment of $1 billion. This investment made Microsoft the exclusive provider of cloud computing services to OpenAI. In 2023, Microsoft made an additional multi-year, multi-billion dollar investment to accelerate AI breakthroughs and ensure these benefits are broadly shared with the world5.