Silicon Valley is feeling the AI boom on the ground

The trajectory of Nvidia’s stock price can’t even be described as a hockey stick — it’s sharper than that. The chipmaker fueling the artificial intelligence boom with its powerful graphics processing units hit a market cap of $1 trillion barely a year ago. Since then, its value has tripled.

That kind of explosive growth has sent shock waves through the markets, the industry and Silicon Valley.

You can find evidence of an Nvidia effect even in some unlikely places, like the Denny’s restaurant on Berryessa Road in San Jose, California.

Legend has it that the company’s founders hatched the idea for the business 30 years ago over bottomless coffee and Grand Slam breakfasts.

At a big corner booth, a plaque on the wall says: “This is the booth that launched a 2 trillion dollar company.” It’s already $1 trillion out of date.

“Every day, every day, they come and take pictures over there, ” said server Arnulfo Alba, who noted a new, bigger plaque is set to replace it — the third one so far. 

In just a couple of years, Nvidia has sprinted past household names like Google and Facebook, even if many people aren’t quite sure how to say the company’s name. CEO Jensen Huang, in his signature black leather jacket, has become a sort of rock star-prophet, and jobs at his company are among the most sought after in Silicon Valley. That wasn’t always the case.

“When we joined Nvidia, we never could have predicted how big would it become right now,” said Charles Tsao, who, along with his partner, Claire Mai, started working at Nvidia straight out of grad school in 2022, when the tech sector was in a bit of a slump. 

They’re both 25. He’s an electrical engineer. She’s a software engineer. And Tuesday, they close escrow on their first home: a $1.5 million condo in San Francisco. It’s a top-floor unit with south-facing windows, a ton of natural light and high-grade appliances.

They had planned to buy in their late 20s or early 30s, but bumped their timeline up.

“We realized, ‘Wow, we have so much in our savings now from Nvidia. It’s grown so much, our stock has basically almost 10-Xed,'” Tsao said.

“They’re just new grads. Imagine the people that have already been there for a couple years in other positions,” said real estate agent Spencer Hsu, who has represented Tsao, Mai and several other Nvidia employees. “They can without a doubt buy virtually any property, and many of them, they can probably buy all cash, to be fair.”

The burst of wealth — not just from Nvidia, but the larger AI boom it leads — is rippling through the local real estate market, said Patrick Carlisle, an analyst with the Compass brokerage in the Bay Area.

“Virtually every statistic — and I’m talking overbidding, I’m talking days on market, obviously median sales prices, are at their most heated points since the absolute peak of the pandemic boom,” Carlisle said.

Despite mortgage rates being twice as high as they were, the median sales price of a home in Santa Clara County, where San Jose is located, hit $2 million. And sales of “luxury” homes above $5 million have jumped more than 60% over the last year as the tech-heavy Nasdaq — buoyed by Nvidia — pushes to new highs.

But this Silicon Valley boom feels different, said Nolan Church, a tech recruiting consultant with Continuum HR, who’s worked at Google and DoorDash.

“It’s kind of like a tale of two cities,” he said.

For those with the highly specialized skills to work in AI or other areas of high industry investment, well, “if you fall into that very select, small subset of people, it’s like, ring the register,” he said.

But for everyone else? “It is the hardest it’s been in the last 10 years to get hired into tech,” Church said.

Companies continue to shed jobs that aren’t AI-related, he noted, and the byword of the day is “lean.” Nvidia itself has only about 30,000 employees, far fewer than its Big Tech peers. Apple has about 160,000 employees and Google 180,000.

But for those riding the AI wave, like Mai, Tsao and their pets, the future is looking bright. “We own a cat and a dog, so I’ve always dreamed of building little cat shelves,” said Tsao.

“Yeah, like an obstacle course for her,” Mai added.

Now that they own a home, they’ll be putting their engineering talent into that project.