Nvidia at $5 Trillion: AI Revolution or Historic Bubble?

Nvidia’s valuation has soared past the $5.05 trillion mark, triggering an intense and critical debate across the financial world. The central question is whether this valuation signifies the dawn of a legitimate AI-driven economic boom or if it’s the zenith of a speculative bubble, poised to burst.
The chipmaker, which added a staggering $1 trillion to its value in just three months, stands at the epicenter of this controversy. Proponents of the “boom” thesis point to this rapid growth as evidence of a fundamental shift in the economy.
Their case is bolstered by concrete figures: a massive $500 billion order book and a landmark $100 billion deal with AI leader OpenAI. Furthermore, Nvidia has secured high-profile partnerships with companies like Uber and Nokia, as well as the US government, indicating deep integration into the economy.
However, the “bust” argument is equally formidable. Skeptics highlight formal warnings from top financial institutions, including the Bank of England and the IMF, which have both cautioned about a dangerously inflated AI bubble. These critics often point to the $100 billion Nvidia-OpenAI deal as “circular,” suggesting it’s an example of market inflation rather than genuine demand.
The most significant concern is the gap between AI spending and tangible profits. Analysts warn that “nearly all AI pilot programs in businesses fail.” This suggests the enormous demand for Nvidia’s chips might be speculative, based on hype rather than proven business models, turning this Wall Street debate into a matter of global economic stability.