Nvidia Achieves $5 Trillion Valuation Amid AI Market Growth

Nvidia has made headlines by becoming the first company to achieve a staggering $5 trillion valuation, a milestone largely attributed to the explosive growth in the artificial intelligence market. However, a recent study by Greenpeace highlights significant concerns regarding Nvidia's environmental impact, particularly in supply chain decarbonisation.

The report indicates that Nvidia, along with other AI giants like Qualcomm and Broadcom, is lagging in efforts to reduce emissions linked to their supply chains, which account for over 80 percent of their total emissions.

In a ranking conducted by Greenpeace, Nvidia received an F grade, placing it last among the top ten AI companies evaluated for supply chain decarbonisation. This ranking is particularly alarming given Nvidia's financial success, raising questions about its sustainability practices.

Greenpeace emphasizes that the manufacturing of AI hardware is highly energy-intensive and estimates that global electricity demand from AI chip production could increase dramatically by 2030, potentially reaching around 37,238 gigawatt-hours, far exceeding the total electricity consumption of countries like Ireland.

Furthermore, the report notes a lack of commitment from Nvidia and other chip design companies to transition to 100 percent renewable energy across their operations and supply chains by 2030. Currently, only Apple has made such a commitment, while Nvidia has not set any specific renewable energy goals for its supply chain.

Despite Nvidia's claims of achieving 100 percent renewable electricity for its offices and data centers, it has faced criticism for lacking transparency and actionable commitments towards decarbonisation.

The United Nations Environment Programme calls for AI giants to enhance their sustainability practices and improve transparency in their decarbonisation efforts. The urgency of this issue is compounded by the fact that governments around the world are developing national AI strategies without fully addressing the environmental implications.

As AI continues to integrate into various aspects of daily life, the call for a greener approach in the industry becomes increasingly critical. The findings serve as a reminder that while AI companies are experiencing unprecedented financial success, the environmental costs associated with their growth must also be addressed proactively.