How Nvidia Changed the Game

Introduction How do you pronounce this word? I've heard this numerous times from the man who founded the company, Jensen Huang, there's no debate, it’s Nvidia. And yet many think this multi-trillion dollar artificial intelligence pioneer is called Nvidia. But it's fitting in a way, because Nvidia, now one of the world's most valuable companies, emerged from an industry also often misunderstood: gaming. The global video game industry is a $189 billion industry. That's larger than movies and music combined. Today, Nvidia alone has a market value more than ten times that, eclipsing those of rivals. And that's because Nvidia now says PC graphics cards, the pieces of hardware that render 3D visuals in games were never intended to be the company's final form. The story behind that is a reminder to never underestimate the scale of the video game industry or its role influencing some of the world's biggest companies and their technologies. And it's a tale that can be traced back to the time of the dinosaurs. Nvidia's origin story Nvidia spawned during April of 1993, in Silicon Valley, two months before the premiere of Steven Spielberg's Jurassic Park. What the blockbuster glossed over in terms of paleontological accuracy, critics agree it made up for with exhilarating, computer generated reptiles. It's a dinosaur. Nvidia is absolutely central to the graphics industry now essentially dominates it. But when it first got going, it was just one of dozens of companies that had the same bright idea. Spielberg used workstations from one of those businesses, Silicon Graphics, to bring his dinosaurs to life. But in 1993, Hollywood's need for CGI was just too small for Nvidia. Initially, they were just looking for a market that was big enough to generate the kind of revenue which would then support the R&D effort and the design effort for their products and the only From dinosaurs to video games market back in the day, that really was capable of supporting this kind of an effort was computer gaming. This is the Xbox. The public witnessed the first major triumph when, in 2001, Microsoft's then CEO Bill gates decloaked his company's inaugural competitor in the console gaming battlefield. That's fascinating. That game console was based really upon PC hardware and Nvidia's big break there was that the graphics chip that was part of that initial console was one of theirs. It was a vital stepping stone that aligned Nvidia hardware with PCs bought by hardcore gamers keen on upgrading their computer’s components something they couldn't do with consoles. I have observed that gamers might replace their graphics cards every 3 to 5 years. The better the graphics card, the better the gaming experience in a lot of instances. A lot of these newer games are very, very graphically demanding. Take a look at the difference. This is Halo: Combat Evolved, one of the flagship games released for the Xbox in 2001. Compare it to this demo of a software development framework called Unreal Engine, used by many modern games. This too is being rendered using an Nvidia chip and side by side That's what two decades of progress looks like. Revenue climbed as the company continued scoring lucrative deals and shipped graphics cards to major PC manufacturers of the time. But something else happened during those 20 or so years. People started to ask if these things are so good at transforming code into people and vehicles, could it work the other way around? GPUs excel at something called parallel computing, Solving complex tasks taking a complex problem, dividing it up into small sets of calculations, and solving them in parallel very quickly. So anything that is sort of numerically intensive, anything that requires a lot of, say, coordinate data, a lot of imaging or mapping, that kind of thing. GPUs are much, much better than the standard option, which would be the central processor from Intel. This made the technology relevant to all kinds of non-gaming industries, everything from oil and gas exploration to weather mapping. A lot of the time you see that there are runs on these graphics cards because they have a lot of applications, even outside of gaming. The demand used for chips to mine cryptocurrency GPUs, crypto, GenAI and cats is becoming an important driver. Over the pandemic people were lining up outside of your local micro center to get the new 30 series Nvidia GPUs because so many people were using them for crypto mining at that time, and they weren't available to people who just wanted to play video games with them. More recently, companies acquire GPUs en masse for use with artificial intelligence. OpenAI's ChatGPT, for instance, uses Nvidia hardware. Which brings us to a catalyst behind Nvidia's recent extraordinary rise. Generative AI and cats. More than a decade ago, engineers at Google developed a machine learning system that taught itself what a cat was and how to create an image of one by watching a lot of YouTube videos. The era of deep learning and neural networks had begun. When a graphics card is doing what it was designed to do, which is to generate an image, it's doing that. It's creating a picture of a cat. This is where the ears are. This is where the eyes are. This is where the nose is. The cat flicks its head to one side to look at something. You've got to calculate where that nose is, where those pixels that represent the nose, the eyes, the ears, have moved in the image. Think about that the opposite way. If you are showing a computer lots and lots of pictures of a cat, what it has to be very good at is recognizing points, creating a pattern, effectively creating the reverse of an image. A mathematical picture of what a cat looks like. So that's what graphics chips are really good at. Is building these mathematical constructs of real life things, whether it's sound, whether it's image, whether it's other kinds of things that AI is going to have an influence on. Nvidia became the leader it is today by advancing technology designed for games, but valuable to disparate industries. Big Tech and gaming It knew far in advance that to succeed, it needed gamers. And today that’s something a lot of technology companies understand and want to take advantage of. There are 3 billion gamers in the world, and those aren't just the people who are shelling out for a pricey Nvidia or AMD graphics card or a really beautiful PC rig. It's not just the domain of, you know, the kind of person you picture when you picture a gamer anymore. Every company that is a big tech company has some sort of interest in the video game industry right now. Amazon, Google, even Netflix are prime examples of this. Netflix executives have made pretty clear in the past couple of years that they see gaming as a threat for attention and entertainment time. They've cited the game Fortnite as a competitive threat. And this is relevant to Nvidia's story because it's symptomatic of just how greatly the games industry has evolved over the past decade, and how Nvidia's diversification into AI, data centers, even streaming services, meant there was no existential threat to its bottom line. There are simply now more gamers, more devices and more opportunities. A lot of games that were previously designed for consoles and PCs are getting ported over to mobile phones, so that they can reach audiences that were previously not accessible to them. We're talking Triple-A games here, like Capcom's popular Resident Evil series, which have similar graphics on a phone as they do on a console. People who had never even considered owning a console can now play Call of Duty can now play League of Legends and all of these games that are considered hardcore video games, but in a more casual, fun way on technology that everybody owns. Nobody look to the first iPhone in Steve Jobs’ hand and thought to themselves, one day that thing's going to transform banks Beyond gaming and Gen AI and how we get groceries delivered. But here we are. AI is probably going to be the same, that all of this rush to create this infrastructure, that this platform is fantastic, but the end use the profound effect on the economy, we just don't know what it is yet. Nvidia's benefiting from the world trying to find out. Gaming has gone from being its main source of revenue to something of a rounding error. But we are large consumers of it because we create a lot of AI ourselves, because our chips aren't possible to design without AI, our software is not possible to write without AI. We also use it for an AI foundry. We make AI models for companies that would like to have expertise in doing so And so we are a foundry for AI, like TSMC's a foundry for our chips. The video games industry, the focus for Nvidia's earliest innovations and partnerships is bigger and more accessible than ever, and the company still plays a pivotal role within it. What’s going to be most exciting is seeing what access to advanced AI makes possible for game developers working in Nvidia's world. Maybe it'll even be exciting enough to tempt valve into making Half-Life three. We can dream.

Share your thoughts

Related Transcripts

Governor Chris Sununu Says Everyone in Washington Should Be Fired | Working Capital thumbnail
Governor Chris Sununu Says Everyone in Washington Should Be Fired | Working Capital

Category: News & Politics

Congress and senate, what do they do? they effectively do two things. they approve or disapprove of a policy and they approve or disapprove of funding. right. but that's it. and at the end of the day, when people talk about good government, bad government, that's all based on connectivity and outcomes.... Read more

How a Legendary NFL Receiver Became a Wall Street Player | The Deal thumbnail
How a Legendary NFL Receiver Became a Wall Street Player | The Deal

Category: News & Politics

Intro so larry fitzgerald, this is another one we've really had circled on the, on the calendar. 17 years as an arizona cardinal college football hall of fame, inductee this year, certain first ballot hall of famer for the nfl and an incredibly successful businessman already. and everything you just... Read more

Why Mark Cuban is Fed Up With Both Political Parties | Working Capital thumbnail
Why Mark Cuban is Fed Up With Both Political Parties | Working Capital

Category: News & Politics

Introduction you're sort of like a martian to me. i think of you as like another species. my kids think the same thing. really? why do they think it? because they're teenagers. well if we're in agreement, maybe it's true then. what does it feel like when you win? i mean, it feels good, but it means... Read more

Working Capital Trailer | Premieres Wednesday, July 17 thumbnail
Working Capital Trailer | Premieres Wednesday, July 17

Category: News & Politics

[music] the idea that parties vote the same despite representing districts or states that are all across the country that's just insane and so if i could wave the magic wand i'd get rid of the two parties we ended up having kind of a friendly conversation with a gun pointed that you washington dc has... Read more

Ilhan Omar on Fixing US Foreign Policy | Working Capital thumbnail
Ilhan Omar on Fixing US Foreign Policy | Working Capital

Category: News & Politics

Of all of the entities in america, congress is among the lowest rated, right? mm-hmm. i mean, you guys have a lower rating than the media, which is really saying something. we'll go this way. people don't like you guys. and, you know, are justified in saying that congress doesn't get a lot done. yeah.... Read more

Is Milei’s Radical Plan to Save Argentina Working? thumbnail
Is Milei’s Radical Plan to Save Argentina Working?

Category: News & Politics

Introduction this is javier milei. he was elected president of argentina in a radical political gamble. and the aftershock is now in full swing. melei took office in december 2023 and believes his aggressive and controversial austerity measures are key to lifting argentina out of a decades long cycle... Read more

Trump-Harris Presidential Debate Highlights thumbnail
Trump-Harris Presidential Debate Highlights

Category: News & Politics

First of all i have no sales tax that's an incorrect statement she knows that uh we're doing tariffs on other countries other countries are going to finally after 75 years pay us back for all that we've done for the world and the tariff will be substantial in some cases my plan is to give a $50,000... Read more

Kamala Harris' Full Speech at DNC in Chicago thumbnail
Kamala Harris' Full Speech at DNC in Chicago

Category: News & Politics

Please welcome the democratic nominee for president vice president of the united states of america kamla [applause] harris let my fre in hell hey i'mma keep running cuz wi don't quit on [applause] themselves i'm i'm through the good evening [applause] california good evening everyone good evening good... Read more

Kamala Harris at Debate: I Will Not Ban Fracking thumbnail
Kamala Harris at Debate: I Will Not Ban Fracking

Category: News & Politics

I will not ban fracking i have not banned fracking as vice president united states and in fact i was the tiebreaking vote on the inflation reduction act which opened new leases for fracking fracking she's been against it for 12 years if she won the election the day after that election they'll go back... Read more

ECB Cuts Rates, Christine Lagarde Holds Press Conference thumbnail
ECB Cuts Rates, Christine Lagarde Holds Press Conference

Category: News & Politics

Welcome [music] sorry [music] [music] [applause] [music] [music] [music] good afternoon and welcome to our press conference we are here with president lagard and vice president d gindos my name is wolfang prel we're also joined by journalists uh via remote connection uh so when uh you take the floor... Read more

Bloomberg Technology Special: Nvidia CEO Jensen Huang | Bloomberg Podcasts thumbnail
Bloomberg Technology Special: Nvidia CEO Jensen Huang | Bloomberg Podcasts

Category: News & Politics

[music] bloomberg audio studios podcasts radio news from the heart of where innovation money and power collide in silicon valley and beyond this is bloomberg technology with caroline hyde and ed l low [music] live from san francisco to our tv and radio audiences around the world welcome to a special... Read more

Harris campaign wants a second debate: ‘That was fun’ #shorts thumbnail
Harris campaign wants a second debate: ‘That was fun’ #shorts

Category: News & Politics

Listen i the truth is what it is we want a second debate we certainly hope that donald trump on fox we're entertaining all offers bill hammer is here with me in new york city this morning bill okay the offer out there is that a show of strength a second on her part a show strength and i was look at... Read more