Why Is Nvidia the King of AI Chips, and Can It Last?: QuickTake

Since generative artificial intelligence began to make headlines in 2022, investors have poured money into Nvidia Corp., convinced that its leading position in AI hardware will deliver riches.

The bet has paid off handsomely. The company reached a valuation of $5 trillion in late October and is on course to report more net income this year than its two main rivals will chalk up in sales, combined. A flurry of multi-billion-dollar data center investments in recent months suggests that, if anything, the AI gold rush is still accelerating.

But a massive run-up in stock prices — and the questionable ...