Few companies, if any, have achieved the numbers that NVIDIA signed thanks to the boom in artificial intelligence. As a result of the increased interest in this technological option, the company responsible for the most popular graphics cards in the sector experienced unprecedented growth in value that ultimately led it to rub shoulders with titans like Apple and Microsoft, the two most valuable companies in the world. Unfortunately for NVIDIA, the popular saying is very wise and always has something to say, but this time it is not positive: “everything that goes up, must come down“.
As indicated by the portal TechSpot in a recent publication, NVIDIA recorded a historic loss of 279 billion dollars, the biggest single-day drop in US history. Unfortunately for the firm’s interests, the stock price fell over 9% due to weak economic data and 2.4% in after-hours trading after receiving a subpoena from the Department of Justice for an antitrust investigation. Thus, thanks to this drop, they managed to surpass Meta’s negative record and leave behind the 232 billion dollars that Mark Zuckerberg’s company lost in February 2022.
This drop puts artificial intelligence at stake
For many, one of the main reasons for this decline is related to the rise of generative artificial intelligence. Thanks to this condition, NVIDIA became the third most valuable company in the world, but the returns on AI investments fail to match the expenses. In fact, these have been slow and, therefore, have begun to worry investors, a situation that worsened between April and July when it was stated that Big Tech companies needed to generate 600 billion dollars annually to justify AI-related hardware spending.
Therefore, many point out that the artificial intelligence market could be close to a bubble about to burst. Thus, aspects like the recent stock drop and NVIDIA’s quarterly forecasts that did not meet growth expectations have fueled an idea: the generative AI business could soon explode. In fact, many consumers have shown indifference or even hostility towards AI, as they do not trust products that make use of this technology. Be that as it may, if this trend continues, we could be heading towards a market collapse similar to the dot-com bubble in 2000.
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