As we begin the new year, it is clear that artificial intelligence (AI) will continue to drive market momentum and innovation.
Central to the success of artificial intelligence technology is the need for immense computing power. This demand is being met by major tech companies such as Nvidia, Arm, and TSMC.
“Nvidia’s advanced chips, referred to as ‘AI factories’, are manufactured by TSMC based on Arm’s designs. Together, these companies form a powerful trio that is driving the artificial intelligence revolution,” said Jean-Paul van Oudheusden, Market Analyst at eToro.
Within the first three days of trading into 2025, shares of Nvidia, Arm, and TSMC have already risen by 11 per cent, 19 per cent, and 11 per cent, respectively.
“ASML also reported a 10 per cent increase, underscoring the growing significance of artificial intelligence in shaping the economy. These early gains are a testament to the enduring and expanding role artificial intelligence will play throughout 2025,” said Jean-Paul van Oudheusden, Market Analyst at eToro.
Towards an AI assistant for everyone
The growing interest in AI is taking centre stage at the Consumer Electronics Show (CES) in Las Vegas. Major tech companies are unveiling products such as laptops, TVs, and displays that showcase AI-powered assistants now within reach of everyday consumers.
“While challenges remain in perfecting these technologies, Nvidia CEO Jensen Huang’s keynote speech at CES confirmed that the AI revolution is imminent,” van Oudheusden said.
He added, “In the near future, users will be able to interact with screens that provide real-time data, while humanoid robots will take on increasingly complex physical tasks, though their development is expected to take more time.”
US AI start-ups raise $97bn in 2024
In 2024, early-stage AI companies in the United States secured an impressive $97bn in funding, accounting for nearly half of the $209bn raised by all American start-ups combined, according to PitchBook.
European start-ups also capitalised on the AI boom, raising $62bn, with a quarter of that amount directed towards AI ventures.
“A significant portion of this funding came from private sources, with major players like Elon Musk’s xAI, OpenAI, and Anthropic leading the charge in the US. In Europe, Mistral AI is also emerging as a key competitor. These developments further highlight the US as a global hub for AI innovation and investment. The surge in AI funding shows no sign of slowing down in 2025,” eToro’s van Oudheusden added.
Impact on Google, Amazon, Apple, Meta, and Microsoft market cap
The dominance of Nvidia, Arm, and TSMC has attracted not only end-users but also investors, with major tech giants like Google, Amazon, Apple, Meta, and Microsoft increasing their combined market capitalisation by an astounding $8tn since the launch of ChatGPT in autumn 2022.
“The AI race extends far beyond securing funding and developing hardware; it is also about attracting top talent, fostering innovation, and creating the most conducive environments for technological breakthroughs,” van Oudheusden said.
According to PitchBook, Europe has already fallen behind in this race, with many start-ups in traditional sectors struggling to secure the necessary funding.
“As a result, investors in 2025 will need to prioritise AI to stay ahead of the curve and capitalise on its vast potential,” van Oudheusden concluded.
