Nvidia has overtaken Microsoft to become the world's most valuable company.

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SAN FRANCISCO — Nvidia, the computer chipmaker at the heart of the artificial intelligence boom, continued its impressive stock market rally on Tuesday, eclipsing Microsoft and Apple to become the world's most valuable public company.

Shares of Nvidia rose. Up more than 3 percent on Tuesday, giving the company a total market valuation of $3.34 trillion. Apple and Microsoft, which have swapped positions as the world's most valuable companies for years, were worth slightly less – $3.29 trillion and $3.31 trillion, respectively, at the close of trading.

Nvidia's computer chips and software are critical to training the AI ​​algorithms behind image generators and chatbots like OpenAI's ChatGPT. As the tech and business worlds immerse themselves in the AI ​​boom, demand for the chips is skyrocketing, boosting Nvidia's revenue to $26 billion in the first quarter of this year, up from just over a year earlier. was $7.2 billion.

The AI ​​boom has been reshaping the world's biggest companies over the past two years. In January, Microsoft overtook Apple to become the world's most valuable company as investors poured money into the hot technology.

Gene Munster, managing partner at Deepwater Asset Management, said Nvidia, already a large company, has “the most remarkable growth story” in tech.

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“I don't think it's done,” he said. “If you believe AI is going to be as transformative as some people believe, it will continue to grow.”

Nvidia's rise to become the world's most valuable company shows how strongly investors believe big tech executives' claims that AI will permeate all aspects of modern life. The technology demands more processing power from computers than other types of software, and business leaders are busy building new data centers and filling them with chips from Nvidia and other companies to handle new AI tasks.

Professional investment funds and individual retail investors alike have poured their money into Nvidia shares, which has seen the company's price rise faster than its earnings growth. Since OpenAI sparked a wave of interest in AI with the launch of ChatGPT in late November 2022, Nvidia's stock price has risen nearly 700%.

Nvidia controls about 70 percent of the market for AI chips, making the company the kingmaker in the industry. It has drawn renewed scrutiny from regulators.

Nvidia declined to comment Tuesday.

Before the AI ​​boom, Nvidia was best known for making computer chips used in video game consoles and computers. But the special features of these “graphics processing units” that made them useful for gaming also made them well-suited to crunch the massive calculations needed to train AI algorithms.

In the mid-2010s, researchers in artificial intelligence labs began using Nvidia GPUs as they tinkered with the ever-capable AI. The company took notice and began improving the software used to program its chips to make them better suited for AI work. At the time of the AI ​​boom, most of the industry was used to using Nvidia's chips and software. Other chip companies, such as AMD and Intel, have scrambled to catch up, but industry analysts and AI researchers say Nvidia will continue to benefit from its head start for years.

Shira Ovid contributed to this report.

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