Nvidia’s $5.05 trillion valuation, achieved this week, has ignited a fierce controversy: Is this “boom” built on real-world adoption, or is it a speculative bubble inflated by hype?
The “boom” argument is compelling. The company, which grew by $1 trillion in three months, has a $500 billion order book. It also has a $100 billion deal with OpenAI and major partnerships with Uber, Nokia, and the US government. President Trump is also a vocal supporter. These facts suggest a company deeply embedded in the real economy.
However, the “bust” argument is gaining traction. The Bank of England and the IMF have both issued formal warnings about an AI bubble, suggesting the valuation is detached from fundamentals.
Skeptics are scrutinizing the “real-world” deals. They label the $100 billion OpenAI pact as “circular,” a sign of hype, not real business.
Their biggest concern is the lack of tangible profits for AI customers. Analysts report that “nearly all AI pilot programs in businesses fail.” This “hype vs. reality” disconnect is the central question, and with a $5T valuation, its answer is a matter of global economic stability.