JUANA SUMMERS, HOST:
The chip company Nvidia has become the symbol of everything AI, and it has had a wild week. Just a couple days ago, it reported blockbuster earnings. At the same time, Wall Street has been dumping its stock this week, causing it to lose some $200 billion in value. NPR finance correspondent Maria Aspan is here to explain just what's going on. Hey, Maria.
MARIA ASPAN, BYLINE: Hey, Juana.
SUMMERS: So Maria, why has Nvidia had such an up-and-down week?
ASPAN: So to recap in case you are not following this deeply unsexy company, like I am, Nvidia is a B2B hardware company. But it provides the chips that all of these big tech companies are using to develop AI. So it's powering companies like Microsoft, Google, Facebook, Amazon. And this week, as you put it, Juana, Nvidia reported amazing sales - $30 billion in just the last three months, more than double what it did a year ago. And yet Wall Street freaked out. That's partially because Nvidia's stock has been this huge success story, and it didn't beat everyone's expectations enough, which then got everyone really worried about the future and how long Nvidia, and by extension, the longer AI boom, can really live up to these huge expectations.
SUMMERS: I mean, Maria, markets can be quite volatile. So does any of this actually mark any sort of lasting change in how investors think about Nvidia and AI in general?
ASPAN: It's more of a warning bell. So obviously, two things can be true. Nvidia can be a hugely successful company that is powering the AI boom, and it can also be overhyped or, at least for Wall Street, overvalued. I talked about this today with Michael Sonnenfeldt. He's the founder of TIGER 21, a network of wealthy investors, and I really liked how he put it.
MICHAEL SONNENFELDT: You can't grow a tree to the moon. Growth doesn't go on forever. Not only does Nvidia have a question of how pervasive in the society will AI become, but, when will its natural competitors finally catch up?
ASPAN: And I should say, Nvidia's not really worried about competitors right now. But long term, that's the $3 trillion question.
SUMMERS: I mean, that begs another question. Are there actually any serious competitors?
ASPAN: Right now, Juana, Nvidia's the hands-down winner. And it's going to be for a while. Look, they say they're working with tens of thousands of companies and startups, including the who's who of Big Tech. But we are starting to see the market mature a little bit. There are other chipmakers, like AMD and Intel, and we've also seen some of the big tech companies and customers, like Microsoft, start to make their own chips. And bigger picture, honestly, this is what usually happens with world-changing new technology.
SUMMERS: Maria, is this up-and-down that we're seeing pretty normal?
ASPAN: So, you know, we saw the same sort of story play out with Tesla a few years ago. Tesla introduced us all to electric vehicles, made them cool. It became worth a trillion dollars. But today a lot of companies are making EVs. And that might be bad for Tesla, but it's good for the rest of us.
And we're starting to see the same thing with AI. We're just at the beginning of how all of this artificial intelligence is going to change our world and all of the demand for it. So, you know, the future looks bright for Nvidia right now, but as it continues, the competition that may be bad for Nvidia might become good for all of us.
SUMMERS: That's NPR finance correspondent Maria Aspan. Maria, thank you.
ASPAN: Thanks so much, Juana. Transcript provided by NPR, Copyright NPR.
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