Summarize this content to 2000 words in 6 paragraphs in Arabic Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.How did Nvidia get to be — on and off with Apple — the biggest listed company in the world? There are two answers. One is that it is the dominant maker of chips that power the artificial intelligence age. The other is that it has benefited from the magical mathematics of addressable markets.Nvidia’s founder Jensen Huang this week treated attendees of CES, a big tech showcase in Las Vegas, to many new products and projections. Attendees applauded as he brandished a selection of unremarkable-looking black boxes and devices. But the real drama was saved for his vision of “physical AI”, the next frontier of artificial intelligence, where intricate models will birth not just words but robotic actions.Even for a company worth $3.4tn, the numbers bandied around are big. Humanoid robots alone could be a market of $38bn, Goldman Sachs has suggested. But that’s a pittance compared with autonomous vehicles, in effect robots without legs, which Huang sees as a “multitrillion” industry — a claim echoed by his customer and Tesla boss Elon Musk. Manufacturing, ripe for robotisation, is a $50tn market.The theory is that all of these will need data-crunching chips of the kind Nvidia peddles in vast quantities. It’s plausible. Citigroup analysts estimated recently that 1.3bn AI-powered robots, from vacuum cleaners to drones, will be moving around us by 2035. By 2050, some 648mn, roughly the population of Latin America, will to some extent resemble humans. These will rely on models trained to navigate the world, device-level computing power, and fine-tuning as they learn by experience.This is all grist to the mill of an industry fixated on “total addressable markets” (TAMs). That concept, long used in venture capital, is now commonplace among big listed companies too. The phrase appeared in 3,743 filings posted to the Securities & Exchanges Commission between 2015 and 2020; in the five years since, it has appeared in nearly 20,000. It’s easy to see why: identify a new market, assume a future share of it, and presto — a future revenue number for analysts and investors to start pricing in.Nvidia is the poster child for expanding TAMs. Before the AI boom, its market was gaming chips. That expanded dramatically to data centres. Robots — defined broadly — could make it again much larger. It will have an 81 per cent share of a $359bn market for “accelerator” — or AI — chips by 2030, estimates Bank of America. Expect TAMs to rise, though, and with them estimates of Nvidia’s future worth.Huang, adding to the drama, says physical AI is reaching its ChatGPT moment. That’s a claim worth considering, for two reasons. The launch of ChatGPT in 2022 was the moment at which new possibilities, tools and TAMs suddenly hoved into view. But it’s also the moment that investors collectively lost their minds about the value of future profits that don’t yet — and might never — exist.john.foley@ft.com
