The AI Chip Behind Nvidia’s Supersonic Stock Rally

When a new gadget sets the technology world alight, it’s usually a consumer product like a smartphone or a gaming console. This year, tech watchers are fixating on an obscure computer component that most people will never even see. The H100 processor has enabled a new generation of artificial intelligence tools that promise to transform entire industries, propelling its developer Nvidia Corp. past Microsoft Corp. to make it the world’s most valuable company. It’s shown investors that the buzz around generative AI is translating into real revenue, at least for Nvidia and its most essential suppliers. Demand for the H100 is so great that some customers are having to wait as long as six months to receive it.

The H100, whose name is a nod to computer science pioneer Grace Hopper, is a beefier version of a graphics processing unit that normally lives in PCs and helps video gamers get the most realistic visual experience. It includes technology that turns clusters of Nvidia chips into single units that can process vast volumes of data and make computations at high speeds. That makes it a perfect fit for the power-intensive task of training the neural networks that underpin generative AI. The company, founded in 1993, pioneered this market with investments dating back almost two decades, when it bet that the ability to do work in parallel would one day make its chips valuable in applications outside of gaming.