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Nvidia Corp. was once a scrappy underdog. Founded in a Silicon Valley diner, the designer of graphics chips faced death more than once before finally realizing its founders’ vision of standalone semiconductors used specifically for displaying images on a screen.
Having already surpassed storied titans Intel Corp. and Advanced Micro Devices Inc., the company’s market capitalization touched $1 trillion last week. Graphics didn’t get it there, though. A bet that its approach to number-crunching would be a perfect fit for the nascent artificial intelligence sector ensured that when startups and major tech companies finally caught the wave, Nvidia was there to sell them high-priced chips perfect for the job.
These five charts outline just how Nvidia made it to the top.
Chips used to render graphics propped up the company’s revenue for years as its other category, computing and networking, got a boost from areas like cryptocurrency mining. Then the graphics segment dipped sharply while number-crunching took up the slack.
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The company’s graphics chips are mainly used for gaming, alongside professional applications such as 3D design. But an increasing number of its chips are being installed in data centers to help companies like Microsoft Corp., Alphabet Inc., OpenAI, and Amazon.com Inc. build their AI capabilities and offer those services to clients.
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Last year’s release of ChatGPT ignited a frenzy of interest in generative artificial intelligence — AI that creates content instead of just analyzing information. Nvidia’s leadership position caught the attention of investors, who returned to the stock after getting cold feet following a massive rally in 2021.
