Rama Krishna Sangem
The answer is simple: Because of promise of Artificial Intelligence (AI). These two technology giants – Microsoft and Nvidia, both based in the US have in one single day last week added around 125 billion US dollars to their market capitalization. This has stunned the world, which is still believing that the story of technology companies is still bleak, thanks to the slowdown in America, EU and China.
As a result, these big technology companies in July rose to a market capitalization of whopping peaks – Microsoft to 2.6 trillion US dollars and Nvida at 1.112 trillion US dollars. If you add these two, their market cap is much bigger than the size of India’s GDP, which is around 3.25 trillion US dollars. So, one can imagine the size and scale of these corporations.
Not just them, there are five more big tech companies – Alphabet (market cap 1.52 trillion US dollars), Amazon (1.33 trillion dollars), Apple (3.03 trillion dollars) Meta (775 billion dollars) and Tesla (823 billion US dollars) – all from the US – too have added immense market capitalization since recently. If you add their total market cap now, it would be around 11.26 trillion US dollars, next only to China GDP, which is at 16 trillion US dollars.
What’s driving this tech march?
Again, the answer is AI,or the prospects of AI in coming years. The US stock markets, mostly Nasdaq 100 or S&P 500, are betting high on the future course of AI and their impact on businesses and industry. Microsoft’s last year innovations in AI, especially rolling out of Chat GPT have triggered high expectations of investors on the scope of future technologies, on all sectors.
The markets believe that AI can add up to 14-15 trillion US dollars value to the market cap by 2030. If that happens, it would be a phenomenal jump in global wealth and trade and industry. All nations, particularly those with strong basics in AI are bound to gain in next few years. All these big 7 tech giants and those from China too are in the race to build their own AI innovations.
Gone are the fears of jobs losses in technology companies. Retrenchments will be replaced by recruitment. Of course, there will be some pause – transition to traditional to AI platforms. Those who can master AI are sure to get medals in this gold rush. Whether India will be able to cash in on this march of tech giants is to be seen. Recent deals of India with the US, France and other countries can be of some help.