NIXsolutions: AI Helped Tech Giants Increase Market Capitalization by $2.4 TRL

The tech industry experiences significant changes as we delve into the latest Euroscape report.

1. Growth of Tech Giants

Major technology companies, including Apple, Microsoft, Alphabet, Amazon, and NVIDIA, have collectively increased in value by an average of 36%, totaling a remarkable $2.4 trillion gain over the past year. The venture capital firm Accel unveiled these statistics in their annual report (PDF).

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2. NVIDIA’s Remarkable Achievement

NVIDIA, renowned for its accelerators in advanced generative artificial intelligence models, has officially joined the “trillionaire” club with a market capitalization exceeding $1 trillion. This milestone underscores the company’s impressive trajectory.

3. Cloud and SaaS Resurgence

In the realm of cloud services and Software as a Service (SaaS), a substantial 29% growth is observed since the beginning of the year. Prominent players such as Salesforce, Palantir, and Unity have contributed to this revival, as they recover from a $1.6 trillion loss in the previous year.

The resurgence is particularly driven by AI technologies, with OpenAI securing a substantial $10 billion in funding, followed by Inflection at $1.3 billion. In Europe, notable generative AI developers include Hugging Face ($235 million), Poolside ($126 million), and Mistral AI ($113 million). Notably, the percentage of AI developers among unicorns has significantly increased, reaching 40% in Europe and Israel, and an impressive 80% in the United States.

Despite these successes, the tech industry faces its share of challenges. Companies are prioritizing growth and expansion over short-term profits, and capital costs have risen due to increasing interest rates. Consequently, the growth rate in the Euroscape list has declined from an average of 68% in Q1 2021 to 23% in Q2 2023.

Moreover, the number of acquisitions involving major tech companies has seen a substantial decrease, notes NIXsolutions. In 2021, there were 27 such transactions, followed by 26 in 2022, and only 10 in the current year. The recent Microsoft acquisition of gaming giant Activision Blizzard faced regulatory hurdles, signifying a changing landscape in the industry.