FILE PHOTO: An NVIDIA logo appears in this illustration taken August 25, 2025. REUTERS/Dado Ruvic/Illustration/File Photo

By Niket Nishant and Rashika Singh

(Reuters) -Nvidia was set to make history on Wednesday as the first company to reach $5 trillion in market value, extending a powerful rally that has cemented its place at the center of the global artificial intelligence boom.

Shares of the Santa Clara, California-based company rose 3.6% in premarket trade after a string of recent announcements reinforced its lead in the AI race.

CEO Jensen Huang unveiled $500 billion in AI chip orders on Tuesday and said he plans to build seven supercomputers for the U.S. government.

Moreover, President Donald Trump is expected to discuss Nvidia's Blackwell chip with Chinese President Xi Jinping on Thursday, reflecting the company's growing clout in an escalating U.S.-China tech rivalry.

Nvidia's $5 trillion valuation, coming just over three months after it crossed $4 trillion, would complete the company's transformation from a niche graphics-chip designer into the backbone of the global AI industry, helping it outpace rivals and turning Huang into a Silicon Valley icon.

That valuation would also surpass the entire cryptocurrency market and equal roughly half the value of the pan-European Stoxx 600 index.

Nvidia's shares have jumped nearly twelve-fold since OpenAI's ChatGPT launched nearly three years ago, massively outperforming the benchmark S&P 500 index's 69% gains over the same period.

"In the long run, we expect tech titans to strive to find second-sources or in-house solutions to diversify away from Nvidia in AI, but these efforts will, at best, only chip away at, but not supplant, Nvidia's AI dominance," said Brian Colello, senior equity analyst at Morningstar.

At current prices, CEO Huang's stake in Nvidia would be worth about $177.4 billion, according to regulatory filings and Reuters calculations, making him the world's eighth-richest person, per Forbes.

Born in Taiwan and raised in the United States from age nine, Huang has led Nvidia since founding it in 1993. Under his leadership, the company’s H100 and Blackwell processors have become the engines behind large-language models powering tools like ChatGPT and Elon Musk's xAI.

While Nvidia remains the clear front runner in the AI race, peers such as Apple and Microsoft have also crossed $4 trillion in market value in recent months.

Analysts say the rally reflects investor confidence in unrelenting AI spending, though some warn valuations may be running hot.

The companies' heavy weightings in the S&P 500 and Nasdaq 100 gives them broad influence over global markets.

Nvidia is due to report quarterly results on November 19.

GEOPOLITICAL BARGAINING CHIP

The company's dominance has drawn global regulatory scrutiny, with U.S. export curbs on advanced chips making it a key pawn in Washington's strategy to limit China's access to AI technology.

"Nvidia clearly brought their story to D.C. to both educate and gain favor with the U.S. government," said Bob O'Donnell of TECHnalysis Research. "They managed to hit most of the hottest and most influential topics in tech."

The developer conference on Tuesday also served as a platform for Huang to walk a geopolitical tightrope.

He praised Trump's "America First" policies for accelerating domestic tech investment, while warning that excluding China from Nvidia's ecosystem could limit U.S. access to half of the world's AI developers.

Rivals including Advanced Micro Devices and several well-funded startups are seeking to challenge Nvidia's dominance in high-end AI chips, but it remains the industry's top choice.

(Reporting by Niket Nishant, Rashika Singh and Johann M Cherian in Bengaluru; Additional reporting by Arsheeya Bajwa and Shashwat Chauhan; Editing by Nivedita Bhattacharjee)