Boardroom details Nvidia’s origin story and highlights why the AI computing leader has been taking up the limelight in recent months.
There has been a lot of buzz about Nvidia this past year as far as what the company does and why it’s having a meteoric rise to the top.
The tech company designs and manufactures graphics processing units (GPUs) that have driven advancements across AI, gaming, robotics, and other tech-focused industries. Nvidia also develops wireless communication devices, computing chips, and other tech systems, services, and software that power artificial intelligence. The company hit a $1 trillion valuation in May 2023 for the first time, marking the first of many milestones for the company in this past year.
The AI computing leader might be in the limelight right now, but Nvidia has been building its tech offerings for more than 30 years. Here is a quick rundown of Nvidia’s origin story and what the company is building.
Sign up for Tech Talk, where Boardroom’s Michelai Graham breaks down the latest news from the world’s biggest tech companies and the future of industry-shaping trends like AI.
Nvidia’s Founding
Nvidia was founded on April 5, 1993, by Jensen Huang, Chris Malachowsky, and Curtis Priem. All three founding men have extensive engineering backgrounds, with Priem formerly working at IBM as a graphics chip designer. Huang, Malachosky, and Priem decided to launch Nvidia after projecting an uptick in the need for advanced GPUs, which are specialized devices for processing graphics and images on computers at accelerated rates.
The Nvidia founders specifically saw an opportunity to infuse the gaming and multimedia industries with the tech it was building. They didn’t just want to tackle a graphics processing challenge; they wanted to bring a higher level of realism to computer screens. Huang, Malachosky, and Priem started to solve this problem by developing various graphics processing devices. They started Nvidia with $40,000 of their personal funds before raising millions of dollars in venture capital from notable investment groups, including Sequoia Capital, SoftBank, and TriplePoint Capital.
Nvidia was deep in the developmental stages in the late 1990s, and the company even went through layoffs and almost went bankrupt before it created its flagship product: the graphics processing unit. Nvidia was the first company to bring GPUs to market. Huang, Malachosky, and Priem believed a dedicated GPU was vital to advancing computer graphics because, before this, the majority of graphics were processed via the central processing unit (CPU). Nvidia invented the GPU in 1999, recalibrating the computing industry and the quality of graphics, specifically 3D graphics at the time.
Going Mainstream
Nvidia went public on Jan. 22, 1999, and by the end of that year, its flagship GPU, the GeForce 256, was released. The company’s success skyrocketed after this, and Nvidia won the contract to develop the graphics hardware for Microsoft‘s first Xbox console that later launched in November 2001. In 2004, Nvidia inked a deal with Sony to design the graphics processing unit for the PlayStation 3.
Everything seemed to be going well for Nvidia, but with great success comes great failure. In mid-2008, the company faced a class action lawsuit that included some of its shareholders accusing it of selling faulty graphics chips that were failing at abnormally high rates. Nvidia settled the suit with the Securities and Exchange Commission in 2010 and agreed to allot $200 million to cover customer warranty, repair, and replacements for any faulty chips.
In the midst of that, Nvidia continued its rise and fine-tuned its GPU offerings. Here are some of the company’s big wins over the years:
- February 2008: Nvidia announced its Tegra chip series, which are specialized GPUs for mobile devices and smartphones. These chips also power tablets and Nintendo‘s Switch console.
- January 2011: Inked a six-year, $1.5 billion licensing agreement with Intel that has since been expanded to other partnerships.
- May 2020: Scientists at Nvidia developed an open-source ventilator to address the shortage during the pandemic.
- July 2021: Nvidia launched the Cambridge-1 supercomputer, the company’s first supercomputer for external research access to solve medical challenges using AI.
- Sept. 26, 2023: Nvidia celebrated hitting the $1 trillion valuation mark by adding a plaque to its birthplace, a Denny’s in East San Jose. The Nvidia founders conceptualized the company at the popular diner back in the early 90s before launching it. Denny’s CEO, Kelli Valade, joined Huang at the local Denny’s to unveil the plaque.
- March 1, 2024: Nvidia becomes the third company in US history to surpass a $2 trillion market cap.
Once upon a time, Nvidia almost bought one of its competitors, Arm Holdings, from Softbank in a deal valued at an estimated $40 billion, Boardroom previously noted. The deal ultimately fell through in February 2022, and Arm went public in September 2023 as it also caught the wave of the AI revolution.
The AI Revolution
Nvidia reports that more than 40,000 companies are using its AI technologies worldwide. It’s no secret that AI has been the hottest topic since the end of 2022, when the AI chatbot boom began, thanks to OpenAI. Virtually every major tech company, including Amazon, Microsoft, Google, and Meta, uses Nvidia’s computing chips to power parts or all of their businesses.
Nvidia is headquartered in Santa Clara, Calif., and has nearly 30,000 employees today and counting since now, more than ever, everyone wants to get in on the AI movement.
Read More:
