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VOL. 8, ISSUE 2 (2026)
How NVIDIA builds sustainable competitive advantages in the artificial intelligence industry: A case study based on the dynamic capabilities and resource-based view
Authors
Dr. Lung-Tan Lu
Abstract
The fast advancement of artificial intelligence (AI) has created a major
shift in worldwide semiconductor industry competition because digital
innovation now depends on computing power as its essential strategic asset.
NVIDIA started as a graphics processing unit (GPU) manufacturer before it
became the main AI infrastructure provider which controls the entire AI
ecosystem to achieve market leadership. The research investigates how NVIDIA
developed its strategic operations to win and protect its market position
during the AI revolution. This case study follows a single-case study approach
which tracks NVIDIA's corporate development from 1993 until 2025 through the
analytical lenses of Resource-Based View (RBV) and Dynamic Capabilities Theory
and Porter’s Five Forces Model. The analysis studies multiple aspects which
include strategic development and industry position and ecosystem building and
resource distribution and financial results. The research identifies three main
elements which enable NVIDIA to maintain its market position through
sustainable competitive advantages. The company maintains superior dynamic
capabilities which allow it to detect and handle technological paradigm changes
through its initial backing of Compute Unified Device Architecture (CUDA) and
AI computing infrastructure development. The hardware-software system which
NVIDIA built creates strong user dependencies through its network effects and
switching barriers that protect its market leadership position. The intangible
resources at NVIDIA consist of proprietary software platforms and global
developer communities and extensive intellectual property portfolios and highly
specialized human capital which fulfill all requirements for creating lasting
competitive advantages. The financial review shows that NVIDIA achieved strong
business results through its fabless operational model and its focus on
ecosystem development and its premium product approach which produced high
growth rates and strong profit margins and maintained financial stability and
delivered superior market value to its investors. The company operates under
multiple risk factors which include its concentrated supply network and
political tensions between nations and growing government monitoring and new AI
accelerator technologies entering the market. The research applies RBV and
Dynamic Capabilities Theory to study AI platform ecosystems and high-tech
oligopolistic industries which expands the current knowledge of strategic
management. The research offers operational guidance to technology companies
which need to transform their strategies while building ecosystems and
generating lasting value through their fast-developing technological
environment.
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Pages:56-66
How to cite this article:
Dr. Lung-Tan Lu "How NVIDIA builds sustainable competitive advantages in the artificial intelligence industry: A case study based on the dynamic capabilities and resource-based view". International Journal of Finance and Commerce, Vol 8, Issue 2, 2026, Pages 56-66
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