Nvidia's Explosive Rise from Zero to $3 Trillion (Documentary)

Hi, welcome to NVIDIA. In many ways this is the future of computing. They said the future was a dream. Welcome back, everybody. Jensen is here. Of course, the CEO of NVIDIA. This is the clear winner. Of every winner in the world of artificial intelligence thus far, his company powers everything from Open AI, Google's programs , Meta. we're all frenemies in some ways. We'll talk about it. Most valuable tech company. This company is now worth more than most other countries GDP in the world. It has in fact surpassed Australia, South Korea, even Russia. Every innovation, every

breakthrough, every connection, every revolution. They are all powered by a single spark. Only four companies in the world are Worth more than two trillion dollars. Quick, what's the most valuable tech company you can think of? Tesla? Is it Apple? Maybe Meta? Whichever one came to mind, the chances are that it is still not as valuable as NVIDIA. And it changes everything. While it might not have the instant name recognition of an Apple or a Tesla, NVIDIA is one of the most important companies in the world, as well as being one of the most profitable. NVIDIA

has done it again, the chip giant blowing past analyst expectations in its strong fiscal first quarter, data center revenue alone soaring by 427 percent year over year. Just as interesting as its current success is, so is its incredible backstory. NVIDIA has been around since the 1990s, But only really found itself among the big leagues in the last decade, but how did the company get started and how was AI about to make it even more powerful? Stick around and find out. As we dive into Nvidia, it's important that we know the men behind it. Nvidia was

founded in 1983 and is a creation of three engineers. Jensen Huang Chris Malachowsky, and Curtis r Priem. I'm Jensen Huang. I'm the president and CEO of Nvidia. I met Chris and Curtis. They were at SUN Microsystems. I was at LSI Logic. So we were all from the workstation industry and all we had ever worked on were SUN workstations and have Valiant workstations and things like that. Huang was born in Taiwan, but immigrated to the United States as a child. He got degrees from Oregon State University and Stanford. By the time NVIDIA came to be, he

had worked as a director at LSI Logic and as a microprocessor designer at Advanced Microdevices Incorporated. Malachowsky was raised in New Jersey. and graduated from the University of Florida. His work history by 1993 included Hewlett Packard and Sun Microsystems. Preim had also worked at Sun Microsystems and is credited With designing the first graphics processor for the PC, the IBM Professional Graphics Adapter. The three met thanks to their work when Jensen was sent by LSI Logic to Sun Microsystems. Where I ended up working on computer graphics. There I met my colleague, Curtis. And we were designing

graphics devices for the Sun workstation. Got together with our friend Jensen, the Supplier of chips to Sun Microsystems. And we decided to start NVIDIA. To go pursue Multimedia in the PC space. Which was a rather young and immature technology at the time. Malachowsky and Preim were building chips as part of their jobs, and once Jensen was assigned to their department, a friendship blossomed. But after a while, some major changes took place at Sun Microsystems. The type of graphics architecture that Malachowsky and Preim specialized in wasn't the industry standard anymore, so they decided to leave. Once

they were free agents, they felt that the next move would be to start their own company, but to do this, they'd need some help. So they reached out to their good friend Jensen Huang to join them, but he wasn't really interested. In the initial stage, they Didn't know what type of company they wanted to build. They just knew they wanted to have one. Plus, at the time, Huang had a job that was stable and paid well, plus a family to look after. Asking your friend to quit his cushy job to start a company that you

don't know what it will be won't really go down well. As Huang said, they kept asking me and finally I said, They kept asking me and finally I said, well, you know, tell you what, why don't we just go out and we can think through what kind of company you guys can go build. Not to be deterred, the three men agreed to meet up and discuss this future company. And that is when the now iconic meeting took place at a Denny's diner in East San Jose. Even after the initial meeting, they Would meet day after

day, downing cups of coffee and putting together the vision for what would become NVIDIA. So, what was the vision for the computer industry? Let's just say it all had to do with PCs. Keep in mind, this was back in the 90s when PCs were just taking off. Around the time that NVIDIA was being conceptualized, PCs hadn't become a thing yet. But Huang, Malachowsky, and Preim predicted that it would happen soon. They weren't the only ones who would think this, after all. The R& D departments of all the major tech companies would be racing to the

pinnacle of the PC market, so NVIDIA needed to stand out. How were they going to design PCs that could be a cut above the rest? The answer was video games. Computers up until that point were Designed to be mostly functional. With not much emphasis on entertainment, Huang explained that computers of that time didn't have microphones, speakers, video, or graphics. Well, the NVIDIA founders wanted to counter that by enabling computers to have 3D graphics. This way they could play video games. But why video games? Video games were really unique because despite the fact that they were

Challenging to develop in terms of computer design, They were hot sellers. The 80s were the period when video games stopped being limited to just arcades and could be played in people's homes. Nintendo and Sega Genesis were already doing great things in the market, but what if PCs could let consumers play better? It would be a goldmine. There were just a few problems. First, the three men hadn't actually Seen a PC before . Again, this was the 90s, and PCs weren't the common household item they are today. Not to be deterred, they went out and bought

a Gateway 2000 PC, and immediately took it apart so they could learn how it worked. The other problem was that they didn't have much in the way of funding, or even a company name. Soon, they were able to raise $40,000, which took care of the first part, but what about the name? The name NVIDIA came about in a very geeky way. Whenever the founders would save files to their computers, they would use the name N V. Which meant next version, because they were constantly changing. So, they figured that they'd look for all the words that

had N and V in them. After much searching, they came across NVIDIA, the Latin word for envy. They adapted the name to NVIDIA, and On April 5th, 1993, the empire that would be known as NVIDIA was born. We started a company, and the business plan basically read something like this. We're going to take technology that was available only in the most expensiveworkstations. We're going to try to make it reinvent the technology and make it inexpensive. And, the killer app was video games. And so I, I took this idea to Sand Hill Road. And, they told

me there was no video game market. People don't start companies to play games. And, my parents, like, I remember calling my mom and telling her that we would start this company. And she says, you know, what did you, what do you guys do? And I said, we built these things called 3d graphics chips and, people would use them to play games. And then she, she said, why don't you go get a job? Even though NVIDIA was off the ground, they weren't going to go too far with just 40,000, which is nothing in the billion dollar

world of tech. Luckily, as we've said, the three men had a lot of experience working in tech, which meant they had connections they could lean into. Jensen Huang especially had a very promising connection, the head of LSI Logic, Wilfred Corrigan, who happened to be his former boss. When they spoke with Corrigan, he said that they need to speak to Don Valentine at Sequoia Capital. Now, the NVIDIA founders have been open about the fact that they were Terrified during their pitch meeting, even though Wilfred Corrigan spoke very highly of them and basically demanded that Don Valentine

give them money. They were still nervous. Wilfred said, look, if you're going to start a company, go talk to Don Valentine. And while I was sitting there, he picked up the phone and he said, Hey, Don, I'm going to send a kid your way. He's one of my best employees. I'm not sure what he's going to do. Give him money. After all, they were a newbie company asking for millions. Huang admitted that he was very Anxious and basically bombed the pitch. Don Valentine decided that he was going to give them the funds they needed, mostly

because Wilfred Corrigan told him to, but he did give them a chilling warning, if you lose my money, I'll kill you. In order for Nvidia to succeed, we needed another startup to succeed. And that other startup was electronic arts. And, and then he, on the way out, he, he reminded me that electronic art's CTO. is 14years old and had to be driven to work by his mom. And he just wanted to remind me that that's who I'm relying on. That, that, and then, and then after that he said, if you lose my money, I'll kill

you. And that, that was, that was kind of my memories of that first meeting. NVIDIA launched with 20 million In funding from Sequoia Capital and other firms, and immediately had a failure on its hands. What was this failure? The NV1 chip that was released in November 1995. Now, on paper, the NV1 chip sounds pretty amazing. The chip had both 2D and 3D graphics, video processing, audio wavetable processing, a game port, and others. The plan was that once it hit the Market, it would replace 2D graphics cards, Sound Blaster compatible audio systems, and 15 pin joystick

ports. To top it off, it would be compatible with the Sega Saturn console that was about to hit the market. The stars were aligned for it. So what happened? Well, a few things. First, the NV1 chip was optimized to process quadratic primitives when other companies were Optimizing for triangle primitives. Once the chip hit, companies like Microsoft favored the triangle primitives, which left NVIDIA in the dust. Then there's the fact that it was too expensive. Yes, it had tons of impressive features all at once, but this made it higher cost compared to other options like the

S3 Graphics Verge and Matrox Mystique. And the Sega Saturn console that Was supposed to guarantee NVIDIA a hit, failed in the market as well. The result? NVIDIA gave its customer partner, Diamond Multimedia, 250, 000 units of the NV chip to sell, and 249, 000 were sent back. Our customer partner, Diamond Multimedia, we sold them 250, 000 NV1s, but the retail sales wasn't very good. It was so bad that the NV2 that was Already in development was canceled and the company had to let go of a bunch of its staff, but not to be deterred, the

founders took the lessons learned from the failure of the NV1 and put all their efforts into its next big release, the Riva 128. It is important to remember that when the Riva 128 was released in August, 1997, NVIDIA was on its last leg. When Sega cancelled the NV2 contract, the company was given about 5 million Dollars which helped it stay afloat, but this lifeline was exhausted. It had one month of payroll left, and if this product wasn't a hit, NVIDIA as a company was done for. Fun fact, this time in NVIDIA's history was so dire,

that the company has an unofficial motto. We're only 30 days away from going out of business, that it uses to this day. All the time and effort that Nvidia had put into getting the best Talent was about to be tested. The Riva 1 28, which stands for Real-Time Interactive Video and Animation Accelerator, was a pretty impressive GPU. It was the first to be able to integrate 3D 2D and video acceleration, which blew competitors out of the water. On top of this, Nvidia performed the world's first PC chip emulation, which was done with a piece of

hardware they got from a defunct company called ICOs. And there was this other company that went out of business at the time, and I'd heard about it. It's called Icos. And Icos had built this thing called an emulator, an end system emulator. We called Icos. They said, thanks for calling, but we're out of business. The Riva 128 was unlike anything the market had seen before and did not have the pricing issues that NV1 did. Within four months of release, the Riva 128 sold a million units, which is especially incredible when you realize that the NV1

barely sold a thousand. Riva 128 was a reset of our company because by the time that we realized we had gone down the wrong road, Microsoft had already rolled out DirectX, it was fundamentally incompatible with NVIDIA's architecture, 30 competitors had already shown up, and that time, 1997, was probably NVIDIA's best moment. And the reason for that was our backs were up against the wall. We were running out of time. We're running out of money and for a lot of employees running out of hope. And the question is, what do we do? Well, the first thing

that we did was we decided that, look, DirectX is now here. We're not going to fight it. Let's go figure out a way to build the best thing in the world for it. And Riva 128 is the world's first fully accelerated hardware accelerated pipeline for rendering 3d. Less than a year later, the Riva TNT was released, and this product tried to compete with the then popular Voodoo 2, a set of three specialized 3D graphic chips that was released by its competitor 3DFX. The Riva TNT had twice the render speed and a higher memory than the

Riva 128, but this Didn't mean that it was perfect. It didn't quite surpass the Voodoo 2 in terms of performance and sales, and the lack of support for Glide API, which was big with developers at the time, meant that Riva TNT was not Exactly a runaway success. Still, it was far from a failure and helped establish NVIDIA as a major player in the tech world. The company might have gotten off on a shaky note, but the Riva's created A turn around in its credibility and its financial situation. Suddenly, it was the cool new kid on

the block. And after the Riva TNT, they were about to get an even bigger cash influx by going public. On January 22nd, 1999, NVIDIA became a publicly listed company, and this meant that it had more publicity and more money to pursue new ventures. The first of these would be NVIDIA's Fifth chip, the GeForce 256, which was a GPU at its core and marketed as such. At its time, the GeForce 256 was one of the best products in the market, because it also featured the world's first programmable accelerator. That was the world's first GPU, and that

was, adding programmability to acceleration. So, we created the world's first programmable accelerator. A programmable accelerator is Accelerated computing. It significantly increased computers processing abilities. The GeForce 256 also found a lot of applications in the video game sector. At this point, the video game industry was worth billions, and had been mainstream for years. Every company was trying to align itself with the gaming industry in some way. But NVIDIA struck gold With the GeForce 256. These are some of my favorite GPUs. Look at GeForce 256. The world's first GeForce. Look how cute GeForce 256 is. At the

time, so you know, at the time, it was the single largest chip ever built. It was bigger than a CPU. And people were shocked. That we built something that big and they were even more shocked That we could sell something that big. You might recall that in the past that NVIDIA's early projects failed partially because the other options in the market weren't compatible with its products. One example of this was Microsoft's DirectX. When the NV1 was first released, Microsoft's DirectX APIs only supported triangle primitives, which meant that NV1 had limited use. Now, Microsoft came around

and wanted to use the GeForce for a brand new product. What was this project, you ask? You may have been wondering what this great device was here. This is the Xbox. And so, for the first time, let me now unveil Xbox. Unless you've been living under a rock, you know how big of a deal the Xbox is. Not only did this get Nvidia even more popularity in the tech World, but it also got a tidy 200 million advance for its troubles. It seemed that the days of barely having enough to cover payroll were well behind

them. But, while this deal was profitable, it did cause some minor complications at NVIDIA. As you can imagine, this 200 million project with Microsoft was a big deal, and needed the best hands on deck. So, NVIDIA had its best engineers Working on the Xbox deal, which meant that in house NVIDIA projects were in a weird spot. Years later, though, There was a bit of trouble with the law because of the Xbox deal. David Chang, who worked on the Xbox project, had used his knowledge of the deal to commit insider trading, along with 15 others. He

was found guilty of this charge and was fined 116, 000 by the SEC. But, outside of the Xbox deal, NVIDIA also spent much of the 2000s acquiring companies and intellectual property. In 2002, NVIDIA bought the intellectual assets of 3dfx, a long time rival. The same year, it bought Exluna a maker of software rendering tools. In 2003, Nvidia paid $70 million In 2007, Nvidia bought Portal Player Incorporated. And in 2008. It bought Ageia, a Semiconductor company. All these acquisitions were not coming cheap, and were also around the same period that NVIDIA was subpoenaed by the U.

S. Department of Justice. At the time, there were suspicions of violations of antitrust regulations, not just from NVIDIA, but also from its main rival, AMD. No charges were ever filed, and the issue quickly died down. In fact, NVIDIA was Forbes Company of the Year for 2007, which showed that it had really put itself on the map in a little over a decade. But this didn't mean that NVIDIA was out of the woods just yet. Besides all the money that was being spent on the acquisitions, NVIDIA wasn't the new kid on the block anymore. They'd had

a big hit on their hands when they developed the GPU and made waves in the gaming Space, but this was the problem. They were being pigeonholed into the gaming space. They had rivals with AMD and Intel, and while they weren't doing badly, they weren't doing They needed something new. Something not tied to video games. In 2008, a year after they won the award from Forbes, NVIDIA faced a number of challenges. Several of its GPUs and mobile chipsets had suffered malfunctions due to a Manufacturing error and this led to a write down of 200 million in

revenue. This happened in the very first quarter and would not be the only setback for the year. The faults with the GPUs didn't just impact their revenue but also made them the subject of a class action lawsuit in late 2008. Consumers claimed that the GPUs had been put into Apple, Dell, and HP laptops, and they, in turn, malfunctioned. In response, NVIDIA offered repairs and refunds to customers, and the issue was fully settled in 2010. As the 2010s began, NVIDIA took a bold move regarding Intel. For years, the two companies had been at each other's throats,

and things got messy. On the lighter end, NVIDIA created a website called Intel's Insides, where they posted satirical cartoons making fun of its rival. In the cartoons, Intel is about to kill off the free market represented by a turkey and tries to take credit for NVIDIA's work. Let's just say that this feud was nothing if not interesting. But, cartoon and troll websites aside, the two companies were constantly going at each other in court. In the computing world, you and Intel have butted heads more and more. It seems and, I'll ask it simply, you Know, why

do you hate Intel so much? Well, we don't hate Intel so much, but they do hate us a lot. In early 2009, Intel sued NVIDIA and claimed that it didn't have the right to design chipsets that would be compatible with its processors. NVIDIA shot back and said that Intel was doing too much huffing and puffing over the CPU sector, which was on the decline. NVIDIA countersued, but in the meantime, it had to halt production of its nForce chipset line. You're in a high profile battle, legal battle with Intel that's scheduled to be litigated later this

year. What's, what's, what's going on there? We're engaged in two legal, legal disputes, with, related to Intel. One of them, chipset line. They initiated and we Sued, we countersued. The second one, Is related to the FTC. With respect to antitrust. The issues at the time can be looked at like this, the two companies had a deal that allowed NVIDIA to design chipsets that would be compatible with Intel products. Then there was a dispute about whether or not the license Covered specific products. This was what led to the lawsuits and cartoon trolling. But by 2011, the

two came to a solution in the form of a six year cross licensing deal that would let Intel access NVIDIA's tech and let NVIDIA License Intel's patents. Intel paid 1. 5 billion for this deal and it ended the long running legal battle. Today, things are much better Between Intel and NVIDIA. In fact, NVIDIA CEO, Jensen Huang said in 2022 that the company was open to having Intel manufacture its chips. It's crazy to think that these two companies that were at each other's throats for so long would have made peace, but that seems to be the

case. Back in the early 2000s was a crucial time in the Intel NVIDIA rivalry. Yes, the two had been competitors for years, but the industry was changing. There was debate about whether CPUs or GPUs would be the future of the tech world. NVIDIA accused Intel of clinging to the old glory days of CPUs while they were looking to the future with GPUs. It was this vision that saw NVIDIA explore deep learning. Ready? Go! Once upon a time, it was all fun and games. NVIDIA started off by making chips for video game machines. Graphics became serious

business when people started using NVIDIA for blockbuster movies. Medical imaging devices. And the world's most powerful supercomputers. And then one day, researchers discovered that our technology was perfect for AI. And one day, about six years ago, a whole bunch of researchers Discovered that our GPU was perfect for deep learning. NVIDIA's adventures in the world of deep learning began with the release of CUDA in 2006. In 2006, CUDA, which has turned out to have been a revolutionary computing model, we thought it was revolutionary then, it was going to be an overnight success, and almost 20 years

later it happened. We saw it coming. So what is CUDA? Well, it's a closed source parallel computing platform, an API that lets software use certain GPUs. The fact that it allows for broader use of GPUs, the thing NVIDIA was known for at the time meant that this tech could expand beyond just gaming. And one way that these capabilities were being explored was through students at university campuses. Andrew Ng, a computer science Professor at Stanford has explained that as far back as 2008, he had students telling him about CUDA and all the cool things that it

could do. One thing stuck out, which was that it could speed up deep learning. And then there was one other breakthrough technology I remember at Stanford when my students were telling me, Hey Andrew, there is this. Thing called CUDA. Not that easy to program, but it's letting people use GPUs for something different. But could we build a server to use GPUs and see if they could scale up deep learning? And that server wound up being what we use for our first deep learning experiments to train Neural networks. We started to see 10 x or even

a 100 x speedups. Now deep learning is an AI method that Teaches computers to process data. in a similar way to what we humans do. The faster computers can process data, the faster AI can develop. The fact that CUDA could do this was a big deal. Ng students weren't the only ones with this idea. From Toronto to New York, computer labs were experimenting with CUDA's AI capabilities and reaching out to NVIDIA. This was good. They'd found another application of one of its most ingenious products. In 2024, we all know that AI is big business and

very profitable, but in the late 2000s, it was a big risk. No one knew if it would go anywhere. And even though NVIDIA was a successful tech company, Huang has admitted that they were uncertain about it. However, they decided to take the leap and poured money into getting the best AI researchers And developing products around AI. Something happened about a decade and a half ago that completely transformed computer science. I'll It was possible to use a piece of software called deep learning, a set of algorithms that studies a bunch of data and learns patterns from

it triggered what we now NVIDIA made a crucible decision that would change not only its own trajectory, but that of The entire technology industry. They would commit to AI computing. This was a giant pivot for our company. We're adding costs, we're adding people, we have to learn new skills. It took our attention away from Our normal day to day competition in computer graphics and gaming, the company's focus was steered away from its core business. And it wasn't just in one place. It's all over the company. It was a wholesale pivot in this new direction. AI

wasn't the only thing that NVIDIA was spending money on in the late 2000s and early 2010s. In 2011, it released its Tegra 3 ARM system on a chip, which was designed for mobile devices and also acquired a chip making company called Icera for $367 million. An update to the Tegra 3 called the Tegra4 hit the market in 2013, and that Same year Nvidia acquired a company called PGI from STMicroelectronics. But the biggest expense that Nvidia would take on in 2013 was the creation of its new headquarters. The vision the company had was of two triangle

shaped buildings on San Tomas Expressway, though another headquarters would be open in 2022, but more on that later. The rest of the 2010s were filled with some pretty cool Developments for NVIDIA. It released the first GPUs of the GeForce 10 series. The GTX 1080. Partnered with automobile companies and made more acquisitions. One particular acquisition sticks out, which is its 2019 acquisition of Mellanox Technologies for 6. 9 billion. The motivation for this purchase appeared to be Nvidia trying To make its way into the high performance computing space. Now, any company in the tech space designing for

computers would want to pursue high performance. But in NVIDIA's case, this was especially relevant because of its AI ambitions. Today I want to talk about the new computer revolution. And I think you feel it, you feel it all around you. And surely in Silicon Valley, we feel it every day. This new computer revolution is called the artificial intelligence revolution. Remember the research that the company was doing into AI in the 2000s. It was about to pay off in a major way, partially thanks to a little company called OpenAI. Even if you haven't heard of OpenAI,

you would have heard of Its flagship product, Chat-GPT. Generative AIs like Chat-GPT rely on large language models to complete their processes. Our advances. Depend on GPUs being fast. Speed of our computers is in some sense, the lifeblood of deep learning. And guess which company had spent years developing GPUs that could accelerate machine learning. That's right. NVIDIA. Not to mention that NVIDIA was an early supporter of OpenAI. It was truly a situation of planning, meeting opportunity. I hand delivered the world's first DGX to OpenAI. Since then, half of the Fortune 100 companies have installed DGX AI

supercomputers. DGX has become the essential instrument of AI. A decade before, no one knew if AI would be profitable. Now, it was clear that it was. This created a massive revenue stream for NVIDIA that brings in billions of dollars and has made it one of the most important companies in the world. Besides the work that it does with OpenAI, NVIDIA has also explored other AI ventures. For example, in 2023, OpenAI teamed up with Getty Images To launch a new program called Generative AI by Getty Images. In the same year, NVIDIA celebrated its 30th anniversary at,

you guessed it, a Denny's restaurant. The same one where the three engineers had met all those years ago with the idea of starting the company. So we came here, right here to this Denny's, sat right back there, and the three of us decided to start the company. Frankly, I had no idea how to do it. And nor did they. None of us knew how to do anything. Now the restaurant has a plaque declaring that a trillion dollar company was created there. Yes, that's a trillion with a T. When did that happen? Let's take a look

at the company's revenue history, shall we? In 2004, NVIDIA had a revenue Of just over 2 billion dollars. And for the rest of the two thousands, it stayed around the three or 4 billion mark. By 2013, its revenue was about 4.1 billion. Impressive, but not the revenue you'd expect for a trillion dollar company. It's when you get to the mid 2010s that things start to shift a lot. NVIDIA's revenue had ballooned to 9.7 billion by 2017 and got to Over 11 billion by the next year. The biggest year to year growth so far has been

from 2022 to 2023. In 2023, NVIDIA joined the likes of Apple, Microsoft, and Amazon when it became a trillion dollar company. That's right, the same company that was on the brink of folding up and barely had a month's payroll at one point had become one of the biggest businesses in the world. But how did this happen? How did NVIDIA grow so big from the 2000s to the 2020s? Sure, it was a successful company, even in the 2000s, but it was nothing like what we see now. In a nutshell, it was AI. Okay, so we know

that NVIDIA makes a lot of money, but how? There are a few different ways, and we'll go through all of them. First, let's talk gaming. After all, this was what NVIDIA started With, and while it's not primarily known as a gaming company today, it is still a big deal in the space. To me, the thing that really changed the course of game development for the industry was the invention of the GPU. On August 31st, 1999, NVIDIA invents the world's first GPU. PC gaming graphics are never again going to be the same. NVIDIA has always worked

to create the best graphics in the business. And over 30 years later, this still pays off. It partners with some of the biggest game developers in the world and gets a pretty penny for its troubles. The next thing is crypto mining. You see, mining crypto requires computers with a lot of processing power, the same type that NVIDIA's GPUs offer. And while the company didn't set out to target the crypto market Necessarily, it has found a market with them and it sells its GPUs to crypto hungry users to this day. The thing you'll notice with the

first two examples is that any activity that requires fast and effective computers is one that NVIDIA can cash in on, and it did for decades. But in the 2010s emerged a market that needed so much computing power that it put NVIDIA on the map AI. . People Are changing the world with AI. From drug discovery, to chatbots, to autonomous machines, and beyond. To achieve these breakthroughs, they need more than just AI expertise and development skills. They need an AI factory. While many scientists believe that we're just scratching the surface of what AI can do, it's

already prominent in our daily lives. When a chatbot helps you with your Customer service query, when Siri plays you a song, when ChatGPT writes your emails, these are all examples of AI. Speaking of ChatGPT, understanding how NVIDIA makes money can't be complete without a shoutout to it, or specifically, a shoutout to OpenAI, its parent company. Take a moment and think of all the transactions ChatGPT completes in a single day. As per current courses, ChatGPT Gets 10 million queries a day. This means two things. Number one, ChatGPT is very popular. And number two, its data centers

are doing a lot of work and will need some high powered GPUs. And as you might have guessed, it is NVIDIA that has the honor of hosting Open AI's data centers. Companies pay for the use of NVIDIA's data centers so that they don't have to host the hardware themselves. And as AI's use continues to grow, so will its profits. It's no coincidence that it was around the same time that large language models and generative AIs were taken off and that NVIDIA's annual revenue saw a spike. The company had already grossed the coveted one trillion mark.

And if AI keeps growing the way that it is, more milestones are in view. Finally, we can't forget about The companies that NVIDIA has acquired over the years. It's spree of acquisitions from the 2000s and beyond did more than just increase its market power. They are also sources of revenue for NVIDIA. I'm also happy to very publicly point out that NVIDIA has been one of the worst trouble spot we've had with hardware manufacturer. Of course. No video about NVIDIA would be complete without looking at the controversies it has gone through, and there have been a

few of them. One of the most prominent had to do with its GeForce 9000 series. While it was successful in the market, there were some issues regarding the GeForce GTX 970's specifications. Basically, NVIDIA claimed that the card had a 4GB memory, but users noticed that it was more like 3. 5GB tops. It was revealed that while the card could technically access the remaining 0. 5GB of memory, it would be much slower. NVIDIA has been hit with a class action lawsuit that claims the company has falsely advertised its GeForce GTX 970 graphics card. A class action

lawsuit was filed for false advertising and NVIDIA settled with the Affected customers in July 2016. The GeForce had another controversy, this time with its partner program. Companies that signed up for it would get access to tons of benefits like help with public relations and funds for marketing. While this might sound great on paper, not everyone in the tech world was on board. Some accused NVIDIA of being anti competitive and the program only Lasted from March 1st, 2018 to May 4th, 2018. NVIDIA today has decided to pull the plug on their hugely controversial GeForce partner program.

Another scandal Nvidia faced had to do with crypto mining. You see, creating crypto involved having a computer complete a computer equation and needs a lot of processing power. The kind of processing power That Nvidia's GPUs offer. So, Nvidia made a lot of money selling its tech to cryptoheads. It even went as far as creating a line of GPUs called CMPs for cryptoheads. And let's just say they made a lot of money. In Q2 of 2018, its GPU sales had gone up 52 percent compared to the last year and 25% by the third quarter. So what

was the problem? The problem was a lot of these Sales of GPUs to crypto miners were listed under gaming revenue. So investors would have thought that gaming was bringing in steady revenue when really it was the crypto market, which is notoriously not stable. While Nvidia never admitted any wrongdoing. It did pay a 5. 5 million fine to the Securities and Exchange Commission. One of the more recent scandals That NVIDIA has found itself in is its attempt to buy ARMS Holdings, a British software and chip company from SoftBank, a Japanese holding company. Every single one of

these devices has a chip inside that has the ARM CPU, and that ARM CPU is the brain of that device. U. S. chip giant NVIDIA is buying British chip designer ARM Holdings From SoftBank for 40 billion. The announcement was first made in July 2020, and the deal would have been worth 40 billion. All was going well until August 2021, when the UK's Competition and Markets Authority And the European Commission stepped in. What could be so bad that both had to get involved? Well, they were worried that if NVIDIA bought ARM, they would restrict their Competitors

from buying ARM's products. That could end up creating unhealthy competition and regulators couldn't have that. By February, 2022, NVIDIA and SoftBank confirmed that the deal had been canceled, the 40 billion deal being scrapped due to pressure from regulators in the UK, EU, and the United States. In a statement, NVIDIA said that ARM is at the center of the Important dynamics in computing. Though we won't be one company, we will partner closely with ARM. Years later, NVIDIA and ARM are still in collaboration with reports suggesting that they are developing ARM based central processing units, CPUs. These

CPUs are allegedly being created for Microsoft's Windows OS and should hit the market by 2025. So we know that NVIDIA is one of the biggest companies in the world, but It's hard to grasp just how big it is. Try to visualize a trillion dollars Two AI Titans. They're now prophesying trillions of dollars in opportunity, stratospheric predictions from NVIDIA chief Jensen Huang. And over the course of the next four or five years, We'll have 2 trillion worth of data centers. One way to understand how big NVIDIA is, is by comparing it to other companies. Because we've

talked so much about them in this video, let's take Intel as an example. Intel was once synonymous with the world's most advanced chips. It's responsible for inventing the very building blocks of modern computing from memory chips to microprocessors. Intel was founded in 1968. So it's 25 years older than NVIDIA. Now, what we're seeing is NVIDIA, which is a leader in graphics Chips and AI chips is moving into the personal computer space that Intel has dominated so long. As of this video, NVIDIA has a market cap of 2. 7 trillion. Intel has a valuation of 185.

27 billion. If we do some quick math, we'll see that NVIDIA is worth 1. 2 billion. More than 11 times what Intel is. That's impressive by any standards. It's also really impressive if you compare NVIDIA to other major companies. Going by market cap, NVIDIA is almost twice the size of Meta, more than three times the size of Tesla, more than five times the size of Samsung, and almost ten times the size of Netflix. NVIDIA's revenue also holds up pretty nicely compared to other big name companies. NVIDIA at after hours highs in the back of a

record breaking Earnings beat a ten for one stock. split and a 262% jump in sales. The stock now well over 1, 000 a share. So AI tech giant NVIDIA has reported a blowout quarter. Obviously a blowout report. I think everybody's expectations were sky high and like NVIDIA took it to the moon. I mean, it just really went high. NVIDIA shares have been performing well up 90% this year. And its earnings report will certainly impact the AI trade. NVIDIA shares up over 2, 000 % In the last five years. NVIDIA is truly the envy of the

world. Revenue is up by 265%. Imagine that, 265 % up. Pretty big, right? While it isn't quite competing with companies like Samsung and Apple in terms of revenue, we have to remember that NVIDIA is the newer entrant into The trillion dollar valuation club. Its biggest moneymaker has been AI thus far, and it too is relatively new. Jeffries estimates that AI as a percentage of total Chip revenue will go from 5%, which was back in 2022, to 25% by 2027. So it's going to continue to drive growth, especially with all of these deep budgets and pockets

from the hyperscalers that are promised to spend. And NVIDIA remains the favorite given Its control over the entire ecosystem. As more time passes, we can very well see NVIDIA's annual revenue enter the 11 figure range. We also have to look at GPUs, which are a big part of the company's income. NVIDIA is currently the market leader in terms of GPUs, but this could be under threat. In Q4 2022, the company had a reported 82 percent market share of GPUs. This would be very impressive if not For the fact that it had 86 percent of the

market just a quarter before. A lot of this can be put down to the fact that it has fierce competition from other companies like AMD and Intel. Still, over 80 percent of the market is nothing to scoff at, and perhaps the company will recover some of its market share over time. Now, let's talk about its employees. As of 2024, NVIDIA had just shy of 30, 000 employees. For context, according to the Office of National Statistics, the average population of a medium sized town is between 20, 000 and 75, 000 people. NVIDIA's employee pool has been

steadily growing for the last few years. With a reported 7, 974 employees just 10 years ago. That's almost four times growth during that period. But how does this stack up with other big companies? Honestly, it's relatively low compared to other tech companies in the field. Meta has over 67, 000 employees. Apple has over 161, 000. And Intel has over 124, 000 employees. But not to despair. After all, NVIDIA was only catapulted to the stratosphere in the last few years, and it might take a while to grow its workforce. Also, its future workforce prospects are pretty

impressive. So we know that NVIDIA's big break of sorts has been through AI. The good news is that AI is on track to grow very rapidly in the next few years. According to the CompTIA IT Industry Outlook 2024report, the AI market in the U. S. alone is on track to be worth 594 billion by 2032. That means a lot of projects will need the very same data centers and GPU processing that NVIDIA already provides. What's more, the number of firms that don't use AI currently , will in the future is growing. This means that NVIDIA

will see not only more profits, but more people added to its workforce. It's been reported that half of its employees earned over 220, 000 in 2023. Of course, we had to compare this to other big tech firms. According to Comparably, the average salary at Meta is 141, 000 per year. At Intel, it's 132, 000 per year. And at Apple, it's 143, 000 per year. So yeah, Nvidia might not have as many employees right now, but it is beating out the competition when it comes to pay. When you look at all of these, it is a

bit easier to see what Nvidia is in. It is certainly a large company, but it is newer to the trillion dollar club than others, and doesn't quite have the number of an Apple or a Meta. But not only does it have impressive revenue stats at the moment, but it is at the frontier of a fast growing sector. If the current growth rate of NVIDIA and AI continues, these numbers could look much different in a few years. We've looked at how NVIDIA stacks up to big companies in the tech space, but how does it compare to

countries? Yes, countries. NVIDIA's joined the league of Corporations so big, they could be countries unto themselves. We have to take into account NVIDIA's current valuation, which was $2.7 trillion. Then we need to consider the GDP of different countries. Just the fact that this company is now worth more than most other countries GDP in the world, except for 11. If Nvidia was a country, it would have a higher GDP than Russia, South Korea, Spain, Turkey, and Saudi Arabia. Wow, that's a country we wouldn't mind joining. When you think of Nvidia in the context of the whole

world, you then begin to think of which countries are the most profitable for it. After all, computers are used pretty much everywhere on the planet, but not every country will buy nvidia products at the same rate, which is giving the company the most money. Luckily, we have a public Earnings report from Nvidia to give us the answers. In 2023, 26. 9 billion of its revenue came from businesses in the United States. 13. 4 billion came from Taiwan. 10. 3 billion came from China and 10. 2 billion came from other countries. This was a bit of

a shift from the previous year when income From the United States and Taiwan were almost the same. In fact, in 2021, income from Taiwan and China eclipsed that of the United States, and this had been the case for years. This means that in a few years, the United States overtook others as the biggest moneymaker for NVIDIA, just as AI became the company's bread and butter. But, when we think about It, All this makes sense. When you look at the countries spending the most money on AI, the US is leading by a huge margin, spending more

than twice what China did in the last 5 years. So, if Nvidia's business model has become more focused on selling AI related products and services, after all, many of the big AI companies are based in the US and much of its use is stateside. That being said, there is another country that is gaining the lead. Third quarter of 2023, Nvidia's earnings report showed an interesting trend. 15% of its revenue had come from Singapore. The country hadn't been really high on its radar before. In fact, it was usually just classified along with others as other countries.

But now it was making a splash. How big of a splash Are we talking about? Try over 400 million in just quarter three, 2023 alone. It's hard to imagine any country outspending the US when it comes to AI, but we could see Singapore becoming a bigger name, not only in terms of Nvidia's income, but in the tech space as a whole. If you ask the average person what technology they were most excited about, They'd probably Mention AI at some point. There's a good reason for this. While scientists have been fascinated with AI as a concept

for decades, the industry has become much more public facing. A few years ago, many of us might not have thought of using AI day to day, even though we kind of already were. But now, AI is growing on an individual and institutional level. Take ChatGPT. When it first launched, it reached over 1 million users in just a year. Five days! And this hasn't slowed down. In January 2024, the site saw 1. 8 billion visits. And it's not just us going to AI these days, it's also AI going everywhere with us. Wearable devices like Fitbits and

Apple Watches have been popular for years, and are at the forefront Of the wearable AI market. This market is on track to reach 180 billion by 2025 alone. Whoever said AI was just a fad was very, very wrong. Let's look at companies. According to a report from MIT Sloan Management, 9 out of 10 businesses said that AI will give them a competitive edge. This quest for a competitive edge means that companies you'd Never imagine will get on the AI train if they hadn't already. We also need to look at how much these companies plan to

spend on AI. According to a report from IDC, spending on generative AI alone will jump from 16 billion in 2023 to 143 billion in 2027. These facts mean a few things for the world and for NVIDIA. First, it means a lot of money is going to be going into the company's pockets. NVIDIA is making millionaires as their GPUs keep dominating AI processing in data centers. It also means that the world we live in is going to look much different in the future. And that's not just because of AI. NVIDIA has had a partnership with OpenAI,

arguably the top AI company in the world for years. Two AI titans, they're now prophesying trillions of dollars in opportunity. Stratospheric predictions from NVIDIA chief Jensen Huang. Over the course of the next four or five years, we'll have two trillion dollars worth of data centers. And then there's Sam Altman's ambitious new venture. And this partnership is only getting bigger. Last year, it was reported that NVIDIA and OpenAI were teaming up for a massive project that would see 1 million NVIDIA GPUs linked together by OpenAI's tech. Currently, NVIDIA has supplied OpenAI with about 20, 000 GPUs,

and look at all the company has achieved. Imagine what would happen with 50 times that amount of computing power. It's nothing like the world has ever seen before. The beauty of AI is that as of now, it is mostly untapped. Yes, the fact that AI can pass law exams, create millions of images, communicate with us, and is embedded In virtually every industry on the planet isn't even the height of it. But what else could there be? Two words. Sentient AI. If superintelligence were to happen, AI would surpass us in every way imaginable. And that terrifies

some people. Most of all, Sam Altman, the CEO of OpenAI. In his open statement, he said, Given The picture as we see it now, it's conceivable that within the next 10 years, AI systems will exceed expert skill level in most domains, and carry out as much productive activity as one of today's largest corporations. With NVIDIA and OpenAI's plans to harness the power of a million GPUs, perhaps they are planning to speed up the emergence of superintelligence. One thing they are definitely pursuing is humanoid robots. Back in February 2023, NVIDIA, OpenAI, Amazon founder Jeff Bezos, and

other big names in the tech world teamed up to invest in a startup called Figure AI that's working to develop, Humanoid Robots. OpenAI invested 5 million while NVIDIA dropped a cool 50 million in the project, with 675 million raised in total. Humanoid Robot, you think Tesla and Optimus, but I've been Digging in to this company. It's an interesting round. The numbers are big. What have you learned? Which is quite rare. You have Jeff Bezos's personal investment firm, NVIDIA coming in at a 50 million investment, OpenAI coming in 5 million, of companies interested in artificial intelligence,

robotics, and these types of future technologies. So this is going to be quite Interesting to see how it all develops. NVIDIA was the work of three visionary men, Jensen Huang, Chris Malachowsky, and Curtis R. Priem, who had a dream and many cups of Denny's coffee. While the company might have soared to new heights, what happened to the men? Chris Malachowsky serves as both a member of the executive staff and a senior technology executive at NVIDIA. A lot of his current work has to do With its research organization and has authored almost 40 patents so far.

His work as a computer engineer has also earned him a lot of recognition, with Malachowsky getting honorary doctorates from the University of Silicon Valley in 2022 and from his alma mater, the University of Florida, in 2023. In 2019, he was inducted into the Florida Inventors Hall of Fame. And in 2023, the University of Florida opened the Malachowsky Hall for Data Science and Information Technology. Over the years, Curtis R. Preim has become known as the most low key of the NVIDIA founders. He actually retired from NVIDIA in 2003, and spends his time off the grid. Also

giving millions to his alma mater, Rensselaer Polytechnic Institute. Fun fact, he founded the Preim Family Foundation and his wife Veronica in 1999. The foundation is non operating, Meaning it has no staff. Instead, it spends its time giving away money for charitable deeds. With all the success that NVIDIA has seen today, he admits he should have held on to some more of them, saying in an interview, I did a little crazy thing and I wish I'd kept a little bit more. But don't feel too bad for him. He sold the rest of his shares for 30

million back in 2006 and continues to live the high life. He reportedly lives in a 6 million home in California and bought a private jet he calls Snoopy back in 2021. One member of the original NVIDIA gang who held onto his shares is Jensen Huang who is the CEO to this day. Ironically he was the member of the original three who had to be convinced to even join in. Along with acting as CEO. Huang owns 3.6% of NVIDIA's stock, bringing his net Worth to about $64.1 billion. Not bad for a plan made in a Denny's

booth. And after leading Nvidia for over 30 years, he seems to be grooming his son. Former nightlife entrepreneur, Spencer Huang for success in the company. Spencer joined Nvidia as a product manager a few years ago and it'll be interesting to see if he succeeds his dad, like his co-founders. Huang has also given a lot of Money to charitable causes in 2022. He gave $50 million to his alma mater, Oregon State University when it comes to tech companies, NVIDIA truly has a remarkable story. The company was started with not much money and a dream to change

its industry. In the beginning, its bread and butter was in the gaming market. But it saw an initial failure with the NV1, and only a few years in, NVIDIA was on the brink of bankruptcy. Then came the Riva 128. That basically saved NVIDIA from going under, and kept it on the path to greatness. Then came NVIDIA's IPO, and the groundbreaking Xbox deal. As it entered the 2000s, the company began to acquire other firms, strengthen its presence in the gaming sector, and found itself in a few controversies along the way. But more important was that NVIDIA

began exploring deep learning, and the possibilities of AI. At the time, AI was not as well known and used as it is now. No one really knew if it would end up being profitable, but NVIDIA chose to take a risk on it and its success. And when it comes to AI, it paid off massively. Today, NVIDIA is the third most valuable company in the world with a valuation Of over a trillion dollars and has blown the competition out of the water. AI business, of course, NVIDIA really the poster child for all this AI excitement because

it makes the chips that power all that AI software. Please welcome to the stage, NVIDIA founder and CEO, Jensen Huang Thanks to NVIDIA, the world has gotten a taste of what AI can do. And since that train has left the Station, there is no stopping it. Right now, NVIDIA is at the forefront of the AI revolution. The space is bound to become even bigger in the next few years. And NVIDIA's existing partnership with OpenAI is good news for its bottom line. A lot of money is coming into the AI space as more data centers open

up shop and consumer demand increases. However, we do have to mention that this increase in AI use Also means that the dreaded super intelligent AI might be upon us soon. On top of this, NVIDIA and several other companies seem to think that humanoid robots are a possibility for the near future. No one knows where they will go, just like we don't know what AI will look like in 2044. Will AI become super intelligent? Will humanoid robots trigger the apocalypse? No one knows, but what we do know is that for the foreseeable future, NVIDIA