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ChatGPT for NVIDIA is a new goldmine, akin to mining.

Published: 2023-01-23

The excitement around the ChatGPT AI bot, released by OpenAI at the end of last year and demonstrating the ability to generate high-quality texts and answer complex questions, turned out to be in the hands of NVIDIA. In the first three weeks of 2023, the chipmaker's shares rose by 22%, making it one of the leaders of the S&P 500 index. This is because the spread of AI bots promises big profits for NVIDIA.

NVIDIA leads the market in graphics chips used to train and run AI algorithms, and the more users turn to ChatGPT for help, the more processing power OpenAI needs to generate answers, texts, and solve other tasks.

Citigroup estimates that the surge in ChatGPT usage could boost NVIDIA sales by between $3 billion and $11 billion in 12 months. Since the growth of a nascent service is difficult to model, Citigroup analyst Atif Malik based his estimates on a forecast of the number of words generated by ChatGPT and NVIDIA's revenue per word.

Bank of America also believes that NVIDIA is one of the main beneficiaries of the growth in the use of so-called generative AI. In turn, Wells Fargo & Co. said future NVIDIA chips would benefit from the need for AI bots like ChatGPT for higher computing power.

Of course, no one is immune from the fact that in the case of ChatGPT, the story will repeat itself with orders for chips from cryptocurrency miners, which have risen and declined sharply several times over the past few years. Investors in NVIDIA and other semiconductor manufacturers who invested in their stocks in late 2021 know that the promise of continuous earnings growth may be just an illusion.