Last night, while European and American markets were closed, Jensen Huang delivered his annual grand sermon to developers. Nvidia's CEO pulled out all the stops: $1 trillion in expected orders by 2027 for his new Blackwell and Vera Rubin chips. A figure that makes heads spin and, incidentally, sets up this morning's opening of Western markets.
But wait. One trillion dollars. To put this figure in perspective: it's more than Spain's GDP, more than Apple's market cap just two years ago. And Huang asks us to believe that his company, which was worth $300 billion in 2023, will rake in orders equivalent to a G20 country's economy in three years.
Timing Is Never Innocent
Read more: spacex selling space Read more: breaking beijing admitsThe announcement comes at the perfect moment. While Shanghai closes its doors in a few minutes (3:00 PM local time) and Abu Dhabi still trades until 2:00 PM, Asian investors have had all night to digest this information. When London opens at 8:00 AM, then Paris and Frankfurt at 9:00 AM, and finally New York at 2:30 PM French time, the market will have had time to get carried away.
This synchronization is no accident. Nvidia has mastered the art of circulating information across time zones. An announcement made in the California evening allows Asian markets to react first, creating momentum that Europeans and then Americans will mechanically follow at opening.
Numbers That Don't Add Up
According to the New York Times and CNBC, Huang claims that "the company is experiencing explosive demand for its latest technologies." Fine. But let's dig into these $1 trillion.
The global semiconductor market weighs about $600 billion today. Nvidia therefore claims to capture, alone, more than the entire current sector. Even accounting for AI's explosive growth, this would assume the market triples in three years AND that Nvidia grabs the majority.
It's mathematically possible, economically dubious.
The Bubble Mechanics
We're witnessing a classic phenomenon: confusion between technological revolution and financial valuation. Yes, AI is transforming the economy. No, that doesn't justify any number.
Remember 2000. The dot-coms were going to "revolutionize commerce." They did, actually. Amazon, Google still exist. But meanwhile, thousands of billions evaporated when investors realized that "revolutionary" doesn't mean "immediately profitable."
Nvidia is playing exactly the same tune. The company sells shovels during the AI gold rush. Brilliant strategy, but one that doesn't guarantee all gold seekers will find nuggets.
Who Pays the Bill?
Because behind these supposed $1 trillion in orders, there are companies that will have to write checks. Microsoft, Google, Amazon, Meta... All are investing massively in AI, certainly. But at some point, these investments will need to generate revenue.
Yet for now, AI costs more than it brings in. ChatGPT burns millions per month. Language models consume phenomenal energy. Companies buy Nvidia chips out of FOMO (Fear of Missing Out), not profitability calculations.
The Revealer of Technological Inequalities
This arms race mainly reveals the emergence of a new technological aristocracy. Only companies with tens of billions can play in this court. The others watch, powerless.
Nvidia doesn't just sell chips: it sells access to the very closed club of those who will be able to develop tomorrow's AI. It's a formidable business model, but one that concentrates technological power in a few hands.
Europe, Paying Spectator
While Huang makes his announcements, Europe remains absent. No European semiconductor champion capable of competing. Our companies will have to buy American or Chinese, period.
When European markets open this morning, they'll probably applaud Nvidia's announcement. But they're actually celebrating their own technological dependence.
The Real Question
The question isn't whether Nvidia will reach its $1 trillion in orders. It's how many companies will survive this mad rush for AI investments.
Because when the bubble bursts — and it will burst, like all bubbles — there will be winners and losers. Nvidia, which sells the shovels, has good chances of getting through. Its clients, who dig blindly, much less so.
Meanwhile, markets will get carried away. London first, then Europe, then Wall Street. Because $1 trillion makes you dream. Even when you know that dreams, in economics, often end as nightmares.
Frequently Asked Questions
Q: What did Nvidia's CEO announce regarding future orders?
Nvidia's CEO, Jensen Huang, announced that the company expects to receive $1 trillion in orders for its new Blackwell and Vera Rubin chips by 2027, a figure that surpasses the GDP of Spain and exceeds Apple's market cap from two years ago.
Q: How does Nvidia's projected orders compare to the semiconductor market?
Nvidia's projected $1 trillion in orders is more than the entire current global semiconductor market, which is valued at about $600 billion. This suggests that Nvidia would need to capture a significant majority of the market, which raises questions about the feasibility of such projections.
Q: Why is the timing of Nvidia's announcement significant?
The timing of Nvidia's announcement is strategic, as it allows Asian investors to react first before European and American markets open. This synchronization is designed to create momentum in the market, influencing investor behavior across different time zones.