Nvidia has officially claimed the title of the first company to reach a market valuation of $US5 trillion ($7.6 trillion), a milestone achieved just a quarter after it shattered the $US4 trillion threshold. This accomplishment marks a significant chapter for the Silicon Valley chipmaker.

In the past, Apple set the precedent for reaching new heights with its iPhone-fueled ascent to $US1 trillion, $US2 trillion, and eventually $US3 trillion in market value.

The soaring demand for Nvidia’s chips has driven its stock price upward since the start of 2023. By the close of trading on Wednesday (Thursday AEDT), shares were priced at $US207.04 with a total of 24.3 billion shares, bringing the company’s market capitalization to $US5.03 trillion.

According to the International Monetary Fund, Nvidia’s current valuation surpasses the GDP of major economies like India, Japan, and the United Kingdom.

Initially, Nvidia made its mark by advancing graphics processing units (GPUs) from their original purpose in gaming to training sophisticated AI systems. These innovations are now integral to technologies like ChatGPT and advanced image generators.

Demand skyrocketed as more people began using AI chatbots. Tech companies scrambled for more chips to build and run them.

Nvidia Chief Executive Jensen Huang has downplayed concerns of a bubble bursting. He said the generative AI chatbots that were merely “interesting” when they first took hold a few years ago were now becoming so useful they would become profitable.

Huang was headed to South Korea this week as leaders from major Pacific Rim economies, including the United States, China and Japan, gathered for the annual Asia-Pacific Economic Co-operation summit that has long championed free trade but is now confronting sweeping US tariffs on technology and other products.

The multilateral gathering in Gyeongju is expected to be overshadowed by a sideline event — a face-to-face meeting between Trump and Chinese leader Xi Jinping — as their intensifying trade war leaves the South Korean hosts in a difficult balancing act.

This week, Huang disclosed $US500 billion in chip orders. The company also announced a partnership with Uber on robotaxis and a $US1 billion investment in Nokia, with the two planning to work together on 6G technology.

In addition, Nvidia is teaming with the US Department of Energy to build seven new AI supercomputers.

Last month, Nvidia announced it would invest $US100 billion in OpenAI as part of a partnership that will add at least 10 gigawatts of Nvidia AI data centres to ramp up the computing power for the owner of the artificial intelligence chatbot ChatGPT.

In August, Huang said Nvidia was discussing a potential new computer chip designed for China with the Trump administration. Trump said on Air Force One that he would speak to Xi about Nvidia’s chips on the sidelines of the APEC event that Huang is also attending.

In August, Trump announced a deal with chipmakers Nvidia and AMD to lift export controls on sales of advanced chips to China in exchange for a 15 per cent cut of the revenue, despite concerns from national security experts that such chips would end up in the hands of Chinese military and intelligence services.

That same month, Trump announced the US government had taken a 10 per cent stake in Intel worth around $US11 billion.

Then, Nvidia announced last month it was investing $US5 billion in Intel and would collaborate with the struggling semiconductor company.