Daniel Cole/REUTERS
Nvidia became the first $4 trillion company this week. The moment reminded me of something my tech friend mentioned before he moved to the UK earlier this year: There have never been companies like these.
$4 trillion is the GDP of Japan, according to the World Bank. Nvidia is not far behind Germany, the third-largest economy in the world. This is a single corporation with only about 36,000 employees.
Why is Nvidia so valuable? After a DeepSeek-inspired freakout earlier this year, the industry now thinks AI models probably need even more Nvidia GPUs and related gear. New types of “reasoning” models are especially expensive to run, which means extra demand for Nvidia’s wares.
Who buys all this stuff? Mainly cloud providers, such as Amazon, Microsoft, and Google, along with other Big Tech and AI companies, such as Meta. They also compete with Nvidia, so I call them frenemies. Add up the market value of these four giants and you get to about $10 trillion. Throw Apple and Nvidia into that mix, and you’re over $17 trillion — approaching China’s GDP. Just from six companies based in two medium-sized urban hubs on the northwest coast of the US.
This compares a “flow” with an asset, so I’m risking a lecture from journalism schools I never attended, but it gives you an idea of the financial heft of these private entities. There are other ways to comprehend their size:
- Profit: Yeah, I know, so old-fashioned! The net income of these six companies totalled almost $500 billion in 2024. That’s well over half the US annual defense budget.
- Capex: Meta, Microsoft, Amazon, and Google will spend about $325 billion this year, mostly on AI data centers. Then there’s Project Stargate, involving OpenAI, Oracle, and others, which is investing at least $100 billion. That rivals the (inflation-adjusted) cost of the US Interstate highway system, which took more than three decades to build.
- Employee wealth: Most of these companies don’t employ that many people, relatively speaking. Thirty-six thousand workers and a $4 trillion valuation represent an unprecedented concentration of wealth.
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