Investors have no chill when it comes to Nvidia. They can't get enough. It's the future. It's everything.
And to be sure, there's a lot to love. It's not a meme stock or a tulip craze — Nvidia has the financial goods and the industry dominance to back up the hype. If AI is the future, Nvidia is the engine powering it.
A good engine is crucial. But AI, as an industry, still has a lot of kinks to work out — technically and ethically.
See here: Today, Google hit pause on its AI tool's ability to generate images of people after social media users began noticing the bot, called Gemini, was producing historically inaccurate images. As in, depicting Nazi soldiers as people of color, according to the Verge. Or the Founding Fathers, all of whom were white men, as a racially diverse group. When prompted by CNN on Wednesday to generate an image of a pope, Gemini produced two images, one man and one woman, both with dark skin.
"We're already working to address recent issues with Gemini's image generation feature," Google said in a post on X Thursday. "While we do this, we're going to pause the image generation of people and will re-release an improved version soon."
ChatGPT, the signature product from OpenAI, also ran into some "unexpected responses" (the company words) this week. Several users reported that the bot was generating pure gibberish. Per the Verge: "While discussing the Jackson family of musicians, the chatbot explained to a Reddit user that 'Schwittendly, the sparkle of tourmar on the crest has as much to do with the golver of the 'moon paths' as it shifts from follow.'"
As impressive as these generative AI tools are — and really, they are at times shockingly cool — they are also buggy in ways their creators can't always predict or understand. And because those creators are human beings, who are flawed and have biases, the tools tend to perpetuate stereotypes. (A Bloomberg analysis of a popular text-to-image AI tool, Stable Diffusion, found that in the bot's creations, "women are rarely doctors, lawyers or judges. Men with dark skin commit crimes, while women with dark skin flip burgers.")
There are also legal battles playing out over the way AI companies gobbled up information — often copyrighted text — to train their chatbots to sound human.
And, not least, the guy known as the "godfather of AI" himself is warning about the technology's potential to cause serious harm.
Bottom line
Nvidia has launched itself to a nearly $2 trillion valuation, making it the third largest company on Wall Street. The brand that was once synonymous with the (no offense) unsexy world of "graphics processing units" for the gaming industry is now the tip of the spear in the AI revolution.
Its blockbuster earnings report Wednesday sent stocks higher around the world, with the S&P 500 and the Dow both hitting new record highs Thursday.
It's true that investors sometimes get drunk on the hype around the shiny new thing from Silicon Valley. But Nvidia has something that past hot stocks have lacked: profits. It raked in more than $12 billion in the most recent quarter — a 770% gain year-over-year.
Nvidia now looks like the adult in the room, and, for better or worse, that gives it tremendous power to shape our soon-to-be AI-powered future.
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