Economic Analysis Report of Nvidia
Journal: Modern Economics & Management Forum DOI: 10.32629/memf.v6i6.4667
Abstract
As the global economy shifts towards artificial intelligence and digital infrastructure, Nvidia has emerged as a pivotal player. This report provides a comprehensive economic analysis of Nvidia's market position, cost structure, and strategic sustainability. Utilizing frameworks such as cost theory, oligopolistic market analysis, and Schumpeter's "creative destruction", the study examines how the company leverages technological leadership and platform integration to drive performance. The analysis reveals that Nvidia benefits significantly from economies of scale and has established high entry barriers in the Data Centre market through its vertically integrated Blackwell architecture and CUDA ecosystem. In the Gaming segment, the firm employs non-price competition strategies to mitigate higher price elasticity. Despite challenges posed by geopolitical trade restrictions and regulatory scrutiny , the report concludes that Nvidia's dual strategy of aggressive hardware innovation and ecosystem expansion positions it for sustained profitability and continued market dominance in the near future.
Keywords
Nvidia, semiconductor industry, oligopoly, economies of scale, AI infrastructure
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[9] Caballero, R.J. (2010). Creative destruction. Economic Growth, pp.24–29.
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[14] Alsop, T. (2025). PC graphics processing unit (GPU) vendor shipment share worldwide from 2009 to 2024, by quarter. [online] Statista. Available at: https://www.statista.com/statistics/754557/worldwide-gpu-shipments-market-share-by-vendor/ [Accessed 25 May 2025].
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[19] Dieuwertje Luitse (2024). Platform power in AI: The evolution of cloud infrastructures in the political economy of artificial intelligence. Internet Policy Review, 13(2).
[20] Acton, M. (2025). Nvidia quarterly revenue surges nearly 70% despite China curbs. [online] @FinancialTimes. Available at: https://www.ft.com/content/5f2c318b-39e6-4ce9-bcd4-d950aa5525c8?utm_source=chatgpt.com [Accessed 26 May 2025].
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[23] Davidson, H. (2025). US chip export controls are a 'failure' because they spur Chinese development, Nvidia boss says. [online] the Guardian. Available at: https://www.theguardian.com/technology/2025/may/21/us-chip-export-controls-a-failure-spur-chinese-development-nvidia-boss-says [Accessed 27 May 2025].
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