The release of OpenAI’s flagship artificial intelligence (AI) platform – ChatGPT – in the transitional week between November and December 2022 brought significant changes to the operations of numerous companies and, arguably, to the logic of the stock market itself.
One of the more illustrative ways of demonstrating the impact of the AI boom is through the market capitalization of the 10 biggest companies heavily involved with the technology.
According to Finbold research, the market cap of these firms grew by $5.4 trillion from December 3, 2022, to June 5, 2024.
The biggest winners of the AI gold rush
Indeed, the rollout of the platform propelled a selection of firms to unprecedented highs, with few becoming as popular or as prominent as the blue-chip chipmaker Nvidia (NASDAQ: NVDA), which saw its market capitalization rise from a relatively modest $420 billion to $2.8 trillion.
Nonetheless, no matter how impressive its rise was, the semiconductor giant was not the only company to see massive growth due to the AI boom, and it is far from the biggest.
Microsoft (NASDAQ: MSFT) made a strategic move by becoming an early backer and partner of OpenAI in 2019, significantly enhancing its AI capabilities and leading to substantial market cap growth.
AI growth remains disconcertingly concentrated
An interesting trend emerging from the AI company growth figures is the incredible level of inflow concentration in the market.
Having grown $2.4 trillion in the examined time frame, Nvidia accounts for about 45% of the total growth of the 10 biggest companies. Additionally, the bulk of the remaining 55% of growth is dominated by just 3 firms: Microsoft, Alphabet (NASDAQ: GOOGL), and Meta Platforms (NASDAQ: META).
The situation is very similar when it comes to the total market capitalizations of the 10 biggest AI companies as of June 5, 2024.
The top 3 firms, Microsoft, Nvidia, and Alphabet, have a combined market cap of $8.1 trillion, making up 78.64% of the total $10.3 trillion. Including Meta and Tesla (NASDAQ: TSLA) raises this to 95.77%, with a combined market cap of $9.8 trillion.
In contrast, the last 3 companies account for just 0.81% at $83.32 billion.
A buzzword but not a silver bullet
Adopting AI-related terminology and integrating the technology – whether called for or not – has become a popular strategy among companies seeking to attract and endear investors.
Finbold’s analysis of the growth of the 10 biggest companies operating in the sector, however, demonstrates that for all its popularity and promise, artificial intelligence is far from a silver bullet guaranteeing growth to ailing companies.
Despite the success of companies like Nvidia, Meta, and Palantir, some stocks have declined despite their involvement in cutting-edge technology.
A prime example is Elon Musk’s Tesla Motors, which, despite its innovations in electric vehicles (EVs), hasn’t been able to counteract the broader industry downturn.
Despite working on artificial intelligence aimed at providing fully autonomous vehicles – and despite the billionaire owner of the firm promising the unveiling of a ‘Cybercab’ in August – Tesla’s market capitalization dropped $48 billion since ChatGPT’s release kicked off the AI boom.
Mobileye – a subsidiary of Intel (NASDAQ: INTC) and another company working on AI-driven driver assistance – has also seen its stock market value drop since late 2022.
Finally, though Adobe (NASDAQ: ADBE) is up compared to where it stood when ChatGPT was released, its market capitalization fell a significant $70 billion in 2024, despite the year featuring some of the biggest AI-driven surges.
