By “During a gold rush, sell shovels.”
That saying—popular today among startups and investors—started after the California gold rush in the mid-1800s when those making the most money were the suppliers selling shovels and picks, not the gold-panners themselves. Today, it refers to profiting off the supplies, technology, or infrastructure needed by the millions of people trying to access or leverage a particular asset.
ChatGPT set off a new sort of gold rush—the artificial intelligence boom—in November 2022 when OpenAI launched the technology. Tech giants (the gold-panners in this metaphor) have since poured billions (and counting) into building AI systems for the masses while scrambling to be the first to add AI features to their products. Microsoft rolled out its “Copilot” system in 2023 for Windows users, while Apple and Google announced transcription and image-generation features for their phones in the last year.
To get a sense of how big the AI market will grow in the near future, Verbit analyzed financial research and recent data on trends around the technology. Skeptics note those racing to build AI systems have struggled to profit from their ventures, largely due to the expense of building and running the tech. But, for the “shovel-sellers” such as Nvidia, selling the computer chips required by tech companies to train AI models has proven wildly lucrative.
Since the debut of ChatGPT less than two years ago, shares in Nvidia have risen by more than 600%. In June, the chip manufacturer became the world’s most valuable company. The company’s rapid ascension—despite a slip in Nvidia shares since June—offers valuable insights into how companies and investors view the future of AI.
