Nvidia (NVDA) Surges As ChatGPT Boom Boosts AI Demand

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Nvidia (NASDAQ:NVDA) seems to be the stock to own at the moment with shares up almost 80% year-to-date (YTD). Jensen Huang, founder and CEO of the chipmaker, said the tech company is seeing an increase in demand as customers rush to join the recent artificial intelligence (AI) boom.

“We are seeing an acceleration in demand,” Huang told Yahoo Finance. “We’re seeing an acceleration of demand for our DGX AI supercomputers. We’re seeing an acceleration of demand for inference, because of generative AI.”

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ChatGPT - The New iPhone Moment

AI is now standing at a turning point as the technology became both accessible and easy to use, Huang said after Nvidia’s GTC (GPU Technology Conference) developer conference last week.

While the broader tech industry continues to deal with declining sales and slowing consumer demand, graphics giant Nvidia is going in the opposite direction. The ongoing craze around OpenAI’s ChatGPT has only further accelerated user interest in the technology, he added. He believes the generative AI breakthrough is the new “iPhone moment.”

“In just a couple of months, [ChatGPT] reached 100 million users, and the number of startups, the number of applications that you’re now starting to see on generative AI is just growing extraordinarily,” Huang said. “So this is definitely the beginning of a new computing platform.”

The groundbreaking chatbot reached 100 million monthly active users just two months after its launch. For comparison, Instagram reached that figure in 2.5 years, while it took TikTok 9 months to get there. Researchers at the Swiss bank UBS said that they have not seen a faster ramp in a consumer internet app in the 20 years they have been following the internet space.

Such an unprecedented rise in adoption underscores ChatGPT’s usefulness in helping consumers with a broad range of tasks, while also revealing a notable curiosity among the general public about AI.

Developed by San Francisco-based AI research laboratory OpenAI, ChatGPT is a generative AI solution that responds to nearly any prompt with incredible speed and clarity. In contrast to other chatbots that can only respond to specific keywords, ChatGPT is able to respond to difficult questions and tasks with comprehensive and high-quality answers.

For this to be possible, ChatGPT runs huge amounts of Internet data through neural networks - computer software modeled on the neurons in the human brain. While this technology has been around for several years, ChatGPT became the first major project to launch such AI for the public and achieve tremendous success.

Margaret Mitchell, a chief ethics scientist at the AI company Hugging Face, said ChatGPT’s popularity was quite surprising even though the “technology wasn’t putting forth any sort of fundamental breakthroughs.”

Major companies working on their own generative AI technology also include Google and Chinese internet giant Baidu. Microsoft-backed OpenAI chose to rush their chatbot to market this fall despite the intensifying competition.

The explosive popularity of ChatGPT has forced tech companies to ramp up generative AI efforts and release their own version. For example, Google’s management declared a “code red” in the wake of ChatGPT’s success, with the tech giant recently announcing its own Bard AI that will hit the markets in the coming weeks.

Similarly, Chinese tech firm Baidu is looking to roll out its own AI chatbot this month, while Anthropic, an AI firm founded by former OpenAI employees, is raising hundreds of millions in funding.

GTC Event Showcases Nvidia’s Superiority

Over the past several years, Nvidia has been capitalizing on the rapidly-growing AI space, with annual revenue at its data center arm skyrocketing from $2.98 billion in 2019 to a whopping $15 billion in 2022. The data center business, which includes the company’s AI products and services, currently accounts for the majority of Nvidia’s sales, overtaking its gaming unit which was central to the company’s growth for years.

Apart from offering sophisticated AI solutions, Huang said Nvidia also allows customers to save cash at a time when companies are ramping up their cost-cutting efforts.

“Everybody wants to do more, but they have to find a way to do it with less,” Huang said, adding that accelerated computing represents the best way to achieve that.

With graphic processing units (GPUs), companies are able to significantly reduce the amount of power they need compared to central processing units (CPUs), allowing them to simultaneously save computing power and decrease their carbon footprint.


During the GTC developer conference, Nvidia also announced new products in gaming, data center, omniverse and edge, as well as fresh developments related to software and services. Highlight of the conference included the company’s new 4nm products, plans to turn into a full-stack provider, and several other opportunities to grow services revenue.

The company unveiled a highly innovative stack of 4nm solutions in gaming, data center, as well as omniverse and edge businesses. The company said it will launch a next-gen GPU workstation, Ada Lovelace RTX 4000, in the October quarter. Nvidia claims Ada can outperform the previous Ampere GPU by two to three times in ray tracing, further extending its dominance in gaming.

The chipmaker also uncovered a more powerful version of its System on Chip (SoC), Thor, to replace Atlan. According to the company, Thor performs twice better compared to Atlan, with a capability to handle 2000 tera operations per second (TOPS).


Nvidia stocks are soaring in recent weeks as investors rush to increase exposure to the booming generate AI market. The stock hit its 11-month high last week and now trades just over 20% off its all-time high thanks to the ChatGPT-triggered frenzy.

Shane Neagle is the EIC of The Tokenist. Check out The Tokenist’s free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and technology.