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Nvidia to Replace Intel in Dow Jones Industrial Average Amid AI Boom

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In a significant change to the Dow Jones Industrial Average, Nvidia will replace longtime rival Intel in the prestigious index, reflecting the rapid growth in artificial intelligence and shifting dynamics within the semiconductor sector. The switch will take effect on November 8. Additionally, Sherwin Williams will replace Dow Inc. in the index, according to S&P Dow Jones.

This change comes as Nvidia continues to see record-breaking gains in 2024, with its stock surging by over 170% following a 240% increase last year. The AI chipmaker’s market valuation has reached a staggering $3.3 trillion, trailing only Apple in terms of publicly traded company value. Nvidia’s advanced graphics processing units (GPUs) like the H100 have become essential components for tech giants including Microsoft, Meta, Google, and Amazon, which are purchasing these GPUs in bulk for AI and machine learning projects. Demand for Nvidia’s forthcoming AI GPU, Blackwell, has been described as “insane,” further emphasizing its dominance in the field.

Nvidia’s ascent brings four of the six trillion-dollar technology firms into the Dow, with Alphabet and Meta being the only exceptions. The company’s impressive stock rally was helped by a 10-for-1 stock split announced in May, which reduced its share price by 90%, facilitating its addition to the Dow without disproportionately influencing the index’s price-weighted structure.

In contrast, Intel has faced significant setbacks, with its stock declining over 50% this year. Once a leader in PC chip production, Intel has lost considerable ground to competitors like AMD and struggled to penetrate the AI sector. These challenges have been compounded by manufacturing issues and increased competition. Intel recently revealed plans to cut 16,500 jobs and reduce its real estate holdings, a part of cost-saving measures approved by the board’s audit and finance committee.

This change marks the Dow’s first adjustment since Amazon replaced Walgreens Boots Alliance in February. Historically, the index has lagged in adding the largest technology firms, but the inclusion of Nvidia underscores its commitment to capturing the growing influence of the tech industry.

 

OpenAI CFO Reassures Investors Amid Leadership Departures, Funding Round Set to Close Soon

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OpenAI’s CFO, Sarah Friar, sought to calm investors following a series of high-profile executive departures, assuring them that the company remains strong and poised to close a major funding round. In an email to investors. Friar addressed the departure of Chief Technology Officer Mira Murati and two top research executives, Bob McGrew and Barret Zoph, who all left this week.

“While leadership changes are never easy, I want to ensure you have the full context,” Friar wrote. She highlighted Murati’s contributions over her six-and-a-half-year tenure and emphasized the company’s “talented leadership bench” that remains capable of competing in the rapidly evolving AI industry.

Despite the recent turnover, OpenAI, which is backed by Microsoft and has recently partnered with Apple, is finalizing a $6.5 billion funding round. The round, led by Thrive Capital with a $1 billion investment, is expected to value the company at $150 billion. According to Friar, the funding round is oversubscribed and should close by next week.

In her message, Friar emphasized that the company remains “laser-focused” on democratizing AI and building sustainable revenue models, noting that investors will soon be introduced to key product and research leaders. The company remains committed to its next phase of growth.

Murati’s exit follows other high-profile departures at OpenAI, including co-founder John Schulman and safety chief Jan Leike, who joined rival Anthropic. Other founders such as Ilya Sutskever and Greg Brockman have also left, with Sutskever starting his own AI company, and Brockman currently on a leave of absence.

To fill the leadership gap, Mark Chen will assume the role of Senior Vice President of Research, while other executives like Kevin Weil, formerly of Meta, and Srinivas Narayanan will continue to drive the company forward.

In addition, OpenAI CEO Sam Altman addressed concerns in an all-hands meeting regarding rumors of a “giant equity stake” for himself, which he firmly denied. Investors have expressed concerns about Altman’s lack of equity in the company he co-founded nearly nine years ago.