Hope you’re having a bussin’ week. *Dabs*. Ws in the chat. This week: Nvidia ate, becoming the biggest company ever. It’s giving pick-me. And, the AUD is flexing on the USD, hitting a 90 day high. Savage.

If you didn’t understand the above paragraph, ask someone in your life who is under 25.

On Thursday last week, Nvidia became the first company to reach a $US4 trillion ($AU6 trillion) valuation. What does that mean? What is Nvidia? And why is it worth so much?

When people say a company is “worth” a certain amount – like $4 trillion – they’re usually talking about its market capitalisation, or market cap. That’s the total value of l a company’s share price times the number of shares. For Nvidia, that’s around 24.4 billion shares × $164 = about $4 trillion.

Market cap gives a quick sense of how big a company is. It also helps investors compare companies at similar stages – say, two trillion-dollar companies – to see which one might offer better returns.

Nvidia is an American tech company, founded in 1993 by three engineers — one of whom, Jensen Huang, is still the CEO. Back then, the engineers saw a future where computer and console gaming (like PlayStation) would explode, so they built a computer chip to make game graphics faster, smoother, and more realistic.

In 1999, it launched its first Graphics Processing Unit (GPU). It took off. The chips powered things like the original Xbox, and by the early 2000s, Nvidia was a big name in gaming and graphics.

Not quite. In 2006, Nvidia’s engineers built a tool that let engineers program GPUs to do many complex calculations, really fast, at the same time. That made them useful beyond gaming and graphics. The chips could be used in finance, science, and medicine, for tasks including analysing massive datasets and running simulations.

One use in particular: AI. Most modern AI systems rely on deep learning — processing millions (or billions) of data points to make predictions and identify patterns. That involves a lot of calculations, and Nvidia’s GPUs are built for exactly that: doing tons of maths really fast, all at once.

Nvidia made it easy for AI researchers to use its chips with special software tools. When the AI boom hit, companies like OpenAI, Google, Meta, and Microsoft started snapping up Nvidia chips to train their massive AI models. These companies have built huge data centres with tens of thousands of Nvidia’s GPUs. As they keep building more, they’ll need even more chips.

Here’s one example: a new data centre being built for OpenAI in the U.S. state of Texas has eight buildings. Each building will host around 50,000 Nvidia chips, which each sell for up to $40,000.

Eight buildings x 50,000 chips x $40,000 = $2 billion worth of Nvidia chips.

Now multiply that by the 1,240 existing or planned data centres in the U.S. as of June 2025, according to analysis by Business Insider.

That is a lot of revenue and potential revenue for Nvidia.

This is why Nvidia hit $4 trillion. Everyone wants a piece of that juicy GPU revenue stream. Sounds pretty bussin’ to me.

As of Friday, one Aussie dollar bought you 65.8 US cents. That’s the strongest it's been since November last year.

Let’s have a look at some data. The exchange rate peaked at just over 69 cents (it’s just a number, it’s ok, no need to giggle) around mid-September 2024, then dropped off. Since the start of 2025, it’s been slowly climbing again.

This is more about USD weakness than AUD strength. Let’s add the trade-weighted index (TWI) to the chart. The TWI shows how the Aussie dollar is doing against a basket of currencies, weighted by how much we trade with each country.

We can see the two lines moved together until this year. In 2025, the blue line (AUD to USD) goes up, but the red line (AUD to all currencies) stays flat. That tells us the Aussie dollar is rising against the U.S. dollar, but not much against other currencies. This means it’s not the AUD getting stronger, it’s the USD getting weaker.

Let’s confirm by looking at the U.S. version of the TWI. It is getting weaker against all other currencies, with the decline starting around the same time that the AUD started to appreciate against the USD. So yep, this is mostly a story about a weaker USD.

Why? Three main reasons:

Tariffs lead to higher inflation, causing higher interest rates, strengthening the USD (see my first newsletter for how higher rates attract foreign money). Plus, investors thought tariffs would hurt other countries more than the U.S, so they poured money into American assets. Higher demand for USD leads to a stronger USD.

But so far, those expectations haven’t played out. Tariffs haven’t clearly boosted inflation yet, and other countries’ growth prospects have not been too badly hit by the tariffs. Those USD-boosting forces have faded — or even reversed.

The USD is the world’s go-to safe haven currency, because global trade and finance run on dollars. In this way, it has the same appeal as gold. But lately, that appeal has taken a hit, partly due to (a) uncertainty around trade policy and (b) worries about the U.S. debt, which is high and projected to increase.

Even though tariffs could lift inflation later, for now it’s near target in the U.S. Some recent data suggests the economy may slow. Markets are now expecting the U.S. to cut rates, and that’s being priced into the USD, pulling it down.

It depends who you ask. If you’re an American exporter, a weaker USD is great, because it makes your goods cheaper for overseas buyers. Same goes for tourists visiting the U.S. — your Aussie dollars go further. But if you’re an American importer, it’s bad news, because buying goods from overseas gets more expensive.

Hard to say. The USD could keep falling, or it might have already hit its low. One investor told the Financial Times this week: “A weaker dollar has become a crowded trade, and I suspect the pace of decline will slow.” In other words, lots of people are already betting on a weaker dollar, so any further fall might be slower from here.

Do you remember TDA’s podcast about those $100 million pay packages Meta was offering AI researchers? Well, that story is closely linked to the Nvidia story. One of the key skills Meta is chasing is the ability to optimise the training and development of AI models on Nvidia GPUs using Nvidia’s software.

In other words, if you’re good at programming Nvidia chips to make AI systems run faster and more efficiently, you’ve won. Congratulations. Enjoy your gazillions of dollars.

And a quick titbit for anyone travelling through Europe this summer — Paris has re-opened the Seine for public swimming for the first time in over 100 years. If you’re passing through la ville lumière, make sure to take a dip.

Speaking of valuations, let’s talk value you can actually taste

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