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Nvidia has become the world's first $5 trillion firm, only three months following the Silicon Valley chipmaker first broke through the $4tn valuation mark.

By contrast, Nvidia’s value exceeds the gross domestic product of Japan, India, and the UK, as reported by the International Monetary Fund (IMF).

Shortly after US stock markets opened on Wednesday, Nvidia’s shares touched $207.86 with 24.3 billion available shares, putting its market capitalization at $5.05 trillion.

Strong demand for Nvidia’s chips, regarded as the most cutting edge in powering artificial intelligence products and software, is the primary driver that the company’s stock price has increased so rapidly from the start of last year.

The wider US stock market has hit new peaks this week, buoyed up by massive funding in artificial intelligence.

Major Announcements and Partnerships

Earlier this week, Nvidia’s Chief Executive, Jensen Huang, disclosed $500bn in chip orders.

Nvidia also unveiled a partnership with Uber on robotaxis and a $1bn investment in Nokia, with the two planning to cooperate on 6G technology.

Furthermore, Nvidia is teaming with the American energy agency to construct multiple AI supercomputers.

Recently, Nvidia announced that it will invest $100 billion in OpenAI as within a partnership that will include at least 10GW of Nvidia AI datacenters to boost the computing power for the owner of the artificial intelligence chatbot ChatGPT.

This past summer, Huang mentioned Nvidia was exploring a potential new processor tailored to the Chinese market with the former U.S. government.

Donald Trump remarked aboard his plane that he would discuss with the China's leader, Xi Jinping, about Nvidia’s technology later this week.

AI Boom and Market Impact

Reaching this milestone puts more emphasis on the upheaval caused by an AI frenzy that is widely viewed as the most significant change in the tech sector after the Apple co-founder Steve Jobs introduced the first iPhone nearly two decades back.

Apple rode the smartphone’s popularity to emerge as the first publicly traded company to be valued at $1tn, $2tn and eventually, $3tn.

Potential Concerns

But there are concerns of a potential tech bubble, with officials at the Bank of England recently pointing out the growing risk that equity values pumped up by the AI boom could burst.

IMF’s managing director has issued comparable warnings.