Nvidia’s historic $5.05 trillion valuation has sparked an intense debate: is this the start of a new AI-driven boom or the peak of a massive bubble destined to bust? The chipmaker, which crossed the $5 trillion mark on Wednesday, is at the center of this controversy.
The “boom” argument is compelling. The company’s value grew by $1 trillion in just three months. It has a $500 billion order book, a $100 billion deal with OpenAI, and partnerships with Uber, Nokia, and the US government. President Trump is also a vocal supporter.
The “bust” argument is equally strong. The Bank of England and the IMF have issued formal warnings about an AI bubble. Skeptics point to the “circular” $100bn Nvidia-OpenAI deal as proof of market inflation.
Furthermore, there is a major disconnect between AI spending and profits. Analysts are concerned that “nearly all AI pilot programs in businesses fail,” suggesting the demand for chips is speculative.
As Nvidia’s valuation eclipses the GDP of major nations, the “boom or bust” question is no longer just a Wall Street debate, but a matter of global economic stability.