The Meteoric Rise of Nvidia [Fastest Growing Stock]

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Company Origins and Early Struggles (1993-1995)

Founded 1993 by Jensen Huang, Chris Malachowski, Curtis Priem at Denny's in California
Initial concept: dedicated GPU for parallel processing vs CPU serial processing
Name origin: portmanteau of "NV" (next version) + "Invidia" (envy in Latin)
Jensen Huang invested $200 for 20% stake, incorporated company
Secured $20M funding from Sequoia Capital and Sutter Hill Ventures
- Leveraged Jensen's LSI Logic connections
- Sequoia had $150M return from LSI Logic IPO
89 other companies competing in graphics space at time

First product: NV1 chip launched 1995 after 2 years development
Partnership with Sega for gaming console chips
- Allowed playing Sega Saturn games natively on PC
Fatal flaw: used quadrangle-based rendering vs industry-standard triangles
Incompatible with Microsoft DirectX API (triangle-based standard)
Diamond Multimedia returned 250,000 units due to poor sales
$10M disaster, nearly bankrupted company
Forced to lay off 40 of 80 employees
Sega CEO graciously released NVIDIA from NV2 contract with full payment
- This act of generosity saved company from extinction

Shifted focus to PC graphics market
1999: Launched GeForce 256 - first programmable graphics card
- Popularized term "GPU" (Graphics Processing Unit)
Company went public 1999, valued at $600M
2000: Secured $200M advance for Microsoft Xbox graphics hardware
- Custom NV2A chip for Xbox launch 2001
Partnerships with Sony PlayStation 3, Apple, Dell, HP throughout 2000s

Fabless chip company model - design only, TSMC manufactures
- Jensen: "NVIDIA would not be here if not for TSMC's pioneering work"
2006: Launched CUDA software toolkit
- Simplified GPU programming using C, C++, Java
- Enabled non-graphics applications to use parallel processing
2008: Tokyo Institute of Technology used CUDA GPUs for supercomputer
Major cloud providers adopted GPU infrastructure:
- Amazon Web Services, Google Cloud, Netflix

2012: Alex Krizhevsky's AlexNet breakthrough at ImageNet competition
- Used two NVIDIA GeForce GTX 580 cards
- Reduced image recognition error rate from 25% to 15%
- Ended "AI winter" - proved neural networks viable
Post-ChatGPT boom (November 2022):
- A100 GPUs flying off shelves at $10,000 each
- Microsoft using 10,000 A100 units
- Q3 2023 sales: $13.5B (101% YoY increase)
May 30, 2023: Reached $1 trillion market cap
- 220% stock price increase in 2023
- Highest performing S&P 500 stock
Current valuation: $1.15 trillion (December 2023)

Healthcare: 2022 Guinness World Record for fastest DNA sequencing (5 hours 2 minutes)
Automotive: Tegra chips power Tesla Model 3 (2016-2019), Mercedes-Benz autonomous driving
Data centers: Powers 90% of Fortune 100 companies via AWS
Gaming innovations: RTX series (2018) with ray tracing, DLSS AI upscaling

2018 Crypto Mining Boom:
- GPU prices increased 71% due to mining demand
- Gaming revenue up 26% to $1.65B
- Downplayed crypto impact to investors
- 2022 SEC fine: $5.5M for misleading disclosures
Pricing criticism from gaming community
2022 EVGA partnership termination due to contentious pricing strategies
Jensen's admission: "I wouldn't start NVIDIA again" due to hardships

Competition increasing:
- Amazon, Microsoft developing custom AI chips
- Intel Arc series, AMD gaining ground
Heavy reliance on TSMC manufacturing in Taiwan
- Geopolitical risks from China-Taiwan tensions
Market debate: Sustainable growth vs. AI bubble
Company doubling down on AI research with continuous paper publications

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