A third of Nvidia staff are now worth over US$20m thanks to soaring shares. Photo / AP
If you have even a passing interest in technology, you have most likely heard of Nvidia. The company’s name dominates headlines about artificial intelligence (AI) and huge stock market surges.
But how did Nvidia (Latin for envy), rise to such prominence – and why is it so critical to the world’s AI-powered future?
Far from being an overnight success, the story of Nvidia began in 1993, in a modest apartment in San Jose, California. Three engineers, Jensen Huang, Chris Malachowsky, and Curtis Priem, shared a vision: to build a revolutionary graphics processing unit (GPU) that would make computers “see” and “think” in new ways. Nvidia’s founders believed that a powerful GPU could transform how humans and computers interact.
But in the 1990s, the world of computer graphics was a niche market, mostly of interest to gamers and visual effects professionals. The big leap came in 1999 with the introduction of the GeForce 256, marketed as the world’s first graphics processing unit (GPU). This wasn’t just a technical feat; it was a new category of computing hardware, designed to render 3D images at lightning speed. Almost overnight, Nvidia became the go-to supplier for anyone serious about gaming or digital design.
At the heart of Nvidia’s success is its co-founder and CEO, Jensen Huang. Born in Taiwan and raised in the United States, Huang washed dishes and cleaned bathrooms at Denny’s as a teenager, eventually earning a master’s degree in electrical engineering from Stanford.
Under his guidance, Nvidia has transformed from a graphics company into a global leader in parallel computing and AI. When most saw the GPU as a tool with limited applications, Huang continued to invest huge amounts into R&D while many analysts and investors queried whether or not there would ever be an acceptable return on investment.
Nvidia’s leadership was propelled even further through the release of CUDA (Compute Unified Device Architecture) – a programming platform that helps users write software algorithms on top of Nvidia’s GPUs. Launched in 2006, CUDA opened the GPU’s raw computing power to researchers and developers beyond the world of graphics. Suddenly, scientists in fields ranging from genomics to astrophysics could run complex simulations hundreds of times faster than before. But the true inflection point came when AI researchers discovered that Nvidia GPUs could dramatically improve the process of training deep neural networks, enabling breakthroughs in computer vision, natural language processing, and autonomous systems.
Today, Nvidia is the undisputed king of AI hardware. Its GPUs power everything from data centres and high-performance computers to self-driving cars and personal devices. The company’s hardware is the engine behind OpenAI’s Chat GPT models, Google’s vast AI infrastructure, and the world’s most advanced robotics. In addition, Nvidia’s software has become the dominant platform for AI development.
Because of the market’s insatiable demand for its GPUs the company has seen its market capitalisation soar, recently surpassing the US$4 trillion-dollar mark and becoming the most valuable company in the world. This rise in value has been staggering as it only surpassed the US$1 trillion mark in May of 2023, equating to a 4x increase in value in a little over two years.
In the process Nvidia has made thousands of its employees millionaires – a recent survey found that a third of Nvidia’s staff have a net wealth in excess of US$20 million. This is easy to understand when you consider that only 10 years ago Nvidia’s shares were trading at less than US$0.60 per share versus the current price of US$175.
But Nvidia’s rise is not unchallenged. Competition is fierce, with rivals like AMD and Broadcom racing to catch up. And as AI becomes more powerful, there are ethical dilemmas about privacy, job displacement, and the potential misuse of autonomous systems.
In an age when AI is everywhere, Nvidia is the company quietly making it all possible. From its humble origins as a graphics chip startup, it’s become the backbone of the world’s AI revolution.
Generate is a New Zealand-owned KiwiSaver and Managed Fund provider managing over $8 billion on behalf of more than 175,000 New Zealanders.
This article is intended for general information only and should not be considered financial advice. The views expressed are those of the author. All investments carry risk, and past performance is not indicative of future results.
To see Generate’s Financial Advice Provider Disclosure Statement or Product Disclosure Statement, go to www.generatewealth.co.nz/advertising-disclosures/. The issuer is Generate Investment Management Limited. Past performance is not indicative of future performance.
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