In late October, NVIDIA’s valuation reached $5 trillion – which makes the company worth more than the UK economy (about $4 trillion). But what does that mean for the channel and for partners?
► NVIDIA now worth more than the UK economy
► High valuation demonstrates confidence but could be a doubled-edged sword
The meteoric rise in the value of NVIDIA and other AI leaders could be interpreted as a demonstration of the market’s confidence that the technology will yield a good return on investment. While that continues, end user customers are also likely to be more confident about investing in AI themselves and that can only be a positive for the channel.
Conversely, if the AI bubble – as some have called it – eventually bursts and values decline significantly, and perhaps suddenly, that could have the opposite effect on customer confidence.
The high valuation of AI stocks then, is a doubled-edged sword. On the one hand it provides a tremendous foundation on which NVIDIA and others can continue to build and encourages organisations to explore the potential of AI. On the other, it means that any fall will be harder and could set back investment and purchasing plans.
The ideal scenarios would be for investment to become more evenly paced, allowing NVIDIA and others to continue their research and development work and giving the IT industry time to deliver demonstrably positive results with AI. This would then provide a further boost in confidence and lead to further commitment. As is often the case with a new and transformative technology, the expectations of market investors and customers must be carefully managed and tangible benefits shown at an appropriate juncture to ensure market and customer confidence holds.
Destination AI
Destination AI from TD SYNNEX is our comprehensive end-to-end programme designed to help you and your customers get ahead of the AI curve.
