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The Story of Jensen Huang

Jensen Huang, the founder of Nvidia, is the 3rd largest company in the world with a market cap of 2.2 trillion. The company has experienced significant growth, with its stock rising 280% in the past year and over 2200% in the past five years. Nvidia’s revenue has increased from $5 billion a quarter to $18 billion per quarter, and their net income has risen from $2 billion a quarter to $9 billion per quarter. Nvidia’s employees have a 98% approval rating, making him the world’s best CEO of 2023.

However, Nvidia faced numerous challenges in the chip industry, pivoting from gaming to mining to data center to AI. Despite these challenges, Huang has managed to become the #1 CEO in the world. Born in Tainan, Taiwan, Huang’s humble beginnings include his parents wanting him and his brother to get an American education. He attended Oregon State University, worked as a director at LSI Logic, and later at Stanford, where he earned a master’s in electrical engineering. On his 30th birthday, Huang decided to pursue a bigger career and founded Nvidia with fellow engineers Chris Malachowsky and Curtis Priem.

Nvidia, originally called NV, was founded by three engineers in the late 1990s to address the video game market. The company’s first product, the NV1, was developed using quadratic primitives, which were later replaced by triangle primitives by Microsoft in 1995. This led to the layoff of half of the company’s staff and the introduction of the RIVA 128, which sold 1 million units within four months.

Nvidia took the company public in 1999, using the momentum from the RIVA 128 to build its first fully fledged GPU, the George 256. This GPU was a massive success and won Nvidia a contract from Microsoft, giving them $200 million to be the official GPU partner for the Xbox. This gave Nvidia worldwide exposure and added the company to the S&P 500.

However, Nvidia faced challenges in breaking into the PC industry. In 2008, Apple, Dell, and HP launched a class action lawsuit against Nvidia for shipping GPUs with high failure rates. Nvidia agreed to reimburse or repair affected computers but took a $150- $200 million loss, forcing layoffs and causing the stock to crash.

Jensen’s second rule of success is humble optimism, as he learned that it was okay for CEOs to say that their strategy didn’t work, that the technology didn’t work, or that the product didn’t work.

Nvidia dominated the GPU industry by the 2010s and was synonymous with gaming graphics. However, Jensen Huang embraced change and embraced the unknown to create breakthroughs. He focused on crypto currency mining, which led to a shortage of GPUs for the core gaming community. Despite this, Nvidia continued to explore AI self-driving technology, partnering with Tesla. Tesla eventually ditched Nvidia in favor of their own chip in early 2019, but Jensen believed that many other companies would want AI chips. This led to Nvidia’s unprecedented run over the past few years, becoming the go-to AI chip producer.

Today, Microsoft, Google, Meta, Amazon, and other Fortune 500 companies are spending $10s of billions on these chips. Nvidia’s revenue does not account for 5% of its market cap, and they can still be a trillion dollar company. Jensen Huang remains the #1 CEO in the world, believing that Nvidia is always one wrong step away from losing everything.

Written by Nouriel Gino Yazdinian

Image Courtesy of  Coolcaesar

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