Nvidia (NVDA), a leading company in the world of AI technology, saw its stock go up by over 2% on Wednesday. This came after a report showed that investments in artificial intelligence (AI) are expected to reach “unprecedented” levels, which is great news for companies like Nvidia that make AI chips.

According to a report by consulting firm Bain, companies are going to need to invest heavily in technology infrastructure to keep up with the AI boom. This means that the cost to build large data centers, which currently ranges from $1 billion to $4 billion, could increase to between $10 billion and $25 billion over the next five years.

These investments are set to create big opportunities for companies that supply AI technology. For Nvidia, the report predicts that the company could make $10 billion from government AI investments in 2024, compared to nothing in that area last year.

In recent months, experts have been watching closely to see how long this AI spending trend will last and how much profit companies like Nvidia will actually make from it.

Nvidia’s stock has been on a strong run, rising about 20% since early September and more than 150% this year alone. This increase happened even though Nvidia’s CEO, Jensen Huang, sold off around $713 million worth of his shares. Despite this sale, Huang is still the company’s biggest shareholder, and Nvidia continues to show solid growth.

Super Micro Computer Stock Drops Amid Government Investigation

On the other hand, things haven’t been as smooth for Super Micro Computer (SMCI), a company that makes AI server equipment. Its stock dropped by 15% on Thursday after news broke that the U.S. Department of Justice (DOJ) is investigating the company for potential accounting issues. This investigation follows a report from a research firm, Hindenburg Research, which had accused Super Micro of having questionable accounting practices and other problems.

Super Micro, which builds equipment using Nvidia’s technology and is a supplier for big companies like Meta (Facebook’s parent company), has seen its stock rise by 57% over the past year, thanks to the growing demand for AI-related technology. However, recent concerns have made the stock more unpredictable. Earlier this year, it joined the S&P 500 index, but since then, it has experienced ups and downs due to missing earnings expectations and delays in important financial filings.

Super Micro’s CEO, Charles Liang, has reassured customers that the DOJ investigation won’t affect their products or the company’s ability to deliver IT solutions. However, financial analysts are being cautious. One analyst at JPMorgan recently downgraded the stock’s rating and significantly cut the price target.

Why This Is a Big Deal for the AI Industry

These developments around Nvidia and Super Micro Computer are major indicators of how quickly AI technology is growing as an industry. The expected surge in spending on AI infrastructure shows that businesses and governments see AI as an essential part of the future. This means that companies that make the technology to support AI, like Nvidia, are in a great position to profit.

In simple terms, the fact that we’re seeing such large amounts of money being invested in AI is a clear sign that the AI industry is booming. It’s a big opportunity for companies involved in making AI chips, servers, and software, and it shows that the world is getting ready to rely more and more on AI in the years ahead.