AI drives up chips share price

AN AI arms race sparked by the ChatGPT chatbot phenomenon has lit a fire under Nvidia. Jensen Huang, co-founder and chief executive of the California-based chipmaker, said that demand had gone ‘‘through the roof’’ in the past two months due to the popularity of so-called generative artificial intelligence.

Shares in the company jumped by 14% to close at US$236.64 (NZ$379) on the Nasdaq on Friday after fourth-quarter revenues of US$6.05 billion exceeded Wall Street expectations, and it raised sales forecasts for the next quarter to US$6.5b.

Nvidia controls about 80% of the market for graphics processing units: Cards and chips that give computers the power to complete complex tasks such as simulating natural language or generating photo-realistic images. Founded 30 years ago to create graphics for PC games, its semiconductors were adopted during the bitcoin boom to ‘‘mine’’ cryptocurrencies, and generative AI is seen as the next wave.

The company’s share price has risen by more than 50% so far this year, making it the seventh most valuable listed US firm, worth US$580b.

Huang also announced a revenueraising plan to sell direct access to DGX Cloud, an AI supercomputer accessible via a standard web browser, which would enable firms without vast amounts of computing power to develop their own AI-powered services.

‘‘The culmination of technology breakthroughs has brought AI to an inflection point,’’ Huang said. ‘‘From startups to major enterprises, we are seeing accelerated interest in the versatility and capabilities of generative AI.’’

Logan Purk, an analyst with Edward Jones, said: ‘‘The AI arms race taking place should drive accelerated adoption of the company’s new products.’’