The Nvidia Way

1. Pain and Suffering as a Foundation for Success

I wish upon you ample doses of pain and suffering.

Adversity as a Catalyst: Jensen Huang's early life, marked by immigration, boarding school challenges, and demanding jobs, instilled in him a resilience and work ethic that became cornerstones of Nvidia's culture. These experiences shaped his belief that overcoming adversity is essential for building character and achieving greatness.

Early Hardships: From cleaning bathrooms at a boarding school to scrubbing floors at a table-tennis club, Jensen's early jobs taught him the value of hard work and attention to detail. These experiences also fostered a "street-fighter mentality," preparing him to face challenges head-on and never back down from a fight.

Resilience and Determination: Jensen's personal journey underscores the importance of resilience in the face of setbacks. His ability to tolerate discomfort, overcome fear, and persevere through difficult situations became a defining characteristic of his leadership style and a key ingredient in Nvidia's success.

2. The Graphics Revolution: From Billiards to Flight Simulators

For the first time, probably in history, the scrolling of the text in a windowing system was faster than you could see.

Early Innovations: Curtis Priem's early work on graphics cards, including the IBM Professional Graphics Controller (PGC), laid the foundation for the graphics revolution in personal computing. His ability to deliver high-resolution graphics and faster rendering times set a new standard for the industry.

The SPARCstation and GX Graphics: Priem's collaboration with Chris Malachowsky at Sun Microsystems led to the development of the GX graphics engine, which significantly improved the graphical capabilities of Sun workstations. This success demonstrated the importance of dedicated graphics chips and paved the way for future advancements.

Aviator: A Showcase for Graphics Power: Priem's flight simulator game, Aviator, became a powerful demonstration of the GX graphics engine's capabilities. It showcased the potential of high-resolution, real-time graphics and helped Sun Microsystems sell more workstations.

3. The Birth of Nvidia: A Denny's Dream

Luck has a lot to do with success, and my luck was having met them.

The Founding Trio: Nvidia was founded in 1993 by Jensen Huang, Curtis Priem, and Chris Malachowsky, who shared a vision for revolutionizing computer graphics. Their diverse skills and experiences—Huang's business acumen, Priem's chip architecture expertise, and Malachowsky's manufacturing knowledge—formed a strong foundation for the company.

The Denny's Meetings: The three cofounders met frequently at a Denny's restaurant in San Jose to develop their business plan. These meetings, fueled by bottomless cups of coffee and Grand Slam breakfasts, laid the groundwork for Nvidia's early strategy and culture.

Securing Funding: Despite lacking a product or revenue, Nvidia secured $2 million in Series A funding from Sequoia Capital and Sutter Hill Ventures. This early investment, based largely on the founders' reputations and connections, provided the capital needed to develop their first chip.

4. NV1's Failure: A Costly Lesson in Market Misjudgment

We were diluted across too many different areas.

Overdesign and Feature Creep: Nvidia's first chip, the NV1, was plagued by overdesign and a lack of focus. It included features that the market didn't value, such as a proprietary audio format, and failed to adequately support existing standards like VGA.

Market Misjudgment: The NV1's reliance on forward texture mapping, a new graphics standard, proved to be a major misstep. Game developers were reluctant to rewrite their software to support the new standard, and the NV1's performance suffered as a result.

Financial Crisis: The NV1's failure led to dismal sales and a severe cash crisis for Nvidia. The company was forced to lay off a significant portion of its staff and seek additional funding to survive.

5. RIVA 128: A Triumph Born from Near-Insolvency

We just wanted to make sure this is the most powerful chip the world’s ever seen.

A Last-Ditch Effort: Facing near-insolvency, Nvidia bet everything on the RIVA 128, a new graphics chip designed to compete with 3dfx's Voodoo Graphics. The company streamlined its development process, made strategic trade-offs, and pushed the limits of manufacturing technology to create a high-performance chip.

Strategic Partnerships: Jensen secured a crucial partnership with TSMC, a leading semiconductor manufacturer, to produce the RIVA 128. He also licensed VGA technology from a competitor, Weitek, to ensure compatibility with existing games.

Market Success: The RIVA 128 was a major success, capturing a significant share of the PC graphics market and generating Nvidia's first profitable quarter. The chip's performance and positive reviews helped restore the company's reputation and secure additional funding.

6. "Ultra-Aggressive" Culture: High Standards and High Expectations

People who train for the Olympics grumble about training early in the morning, too.

Demanding Work Environment: Nvidia fostered a culture of intense work ethic, high standards, and constant improvement. Employees were expected to work long hours, take risks, and challenge the status quo.

Direct Communication and Accountability: Jensen promoted a culture of direct, blunt communication and held employees accountable for their performance. He was not afraid to criticize publicly or demand immediate results.

"Up or Out" Mentality: Nvidia adopted an "up or out" approach, where employees were either promoted on a regular basis or pushed out to make room for new talent. This created a competitive environment and ensured that the company was constantly evolving.

7. The "Speed of Light" Mentality: Relentless Pursuit of Efficiency

How fast can you do it, and why aren’t you doing it that fast?

Theoretical Maximum: Nvidia employees were expected to operate at the "Speed of Light," pushing against the limits of what was physically possible. This meant breaking down projects into component tasks, setting aggressive deadlines, and eliminating any delays or inefficiencies.

Reversing the Production Process: To accelerate the development of the RIVA 128, Nvidia reversed the traditional production process by developing software drivers before the prototype chip was completed. This required the company to invest in an expensive chip-emulation machine.

Continuous Improvement: The "Speed of Light" mentality fostered a culture of continuous improvement, where employees were constantly seeking ways to optimize processes, eliminate waste, and achieve maximum efficiency.

8. GeForce and the Innovator's Dilemma: Disrupt or Be Disrupted

The customer’s always thinking of alternatives.

The Threat from Below: Jensen recognized the threat posed by low-cost competitors and sought to disrupt the market from within. He implemented a strategy of "shipping the whole cow," which involved creating lower-tier products from rejected parts to compete on price.

The Importance of Market Position: Nvidia learned the importance of clearly defining its market position and communicating its value proposition to customers. The company focused on delivering the fastest graphics performance for the best games at a decent price.

The "Three Teams, Two Seasons" Strategy: To maintain its competitive edge, Nvidia reorganized its engineering department to release a new chip every six months, in line with PC makers' buying cycles. This strategy allowed the company to stay ahead of the competition and prevent rivals from gaining a foothold in the market.

9. CUDA: Hacking GPUs and Lighting the Future of AI

Greatness is not intelligence. Greatness comes from character.

The Accidental Discovery: Researchers began using Nvidia GPUs for nongraphics applications, such as scientific simulations, by "hacking" the chips and repurposing their graphics processing capabilities. This led to the development of GPGPU, or general-purpose computing on GPUs.

CUDA: A Programming Model for GPUs: Nvidia recognized the potential of GPGPU and developed CUDA, a programming model that made it easier for scientists and engineers to leverage the GPU's computing power. CUDA opened up new markets for Nvidia beyond gaming and graphics.

The AI Revolution: CUDA became a foundational technology for the AI revolution, enabling researchers to train deep-learning models and develop new AI applications. Nvidia's early investment in CUDA positioned the company as a leader in the rapidly growing AI market.

10. The Mellanox Acquisition: A Strategic Masterstroke

You have to be one.

Data-Center-Scale Computing: Jensen recognized that the future of computing lay in data centers, where thousands of servers would work together to power AI applications. He saw the need for high-speed networking technology to connect these servers and enable efficient data transfer.

Mellanox: A Leader in Networking Technology: Mellanox was a leading provider of high-speed networking products for data centers and supercomputers. Its InfiniBand technology offered the performance and scalability needed to support AI workloads.

A $6.9 Billion Bet: Nvidia acquired Mellanox for $6.9 billion, a move that was initially met with skepticism by some investors. However, the acquisition proved to be a strategic masterstroke, as it positioned Nvidia as a key player in the data-center market and enabled the company to capitalize on the AI boom.

11. The Engineer's Mind: Technical Acumen at the Helm

We’re going to own I/O architecture.

Technical Expertise at the Top: Jensen's deep technical knowledge and engineering background have been critical to Nvidia's success. His ability to understand and evaluate new technologies, make informed decisions, and guide the company's strategic direction has set Nvidia apart from its competitors.

"CEO Math": A Focus on the Big Picture: Jensen's use of "CEO math," or simplified calculations, allows him to quickly assess market opportunities and make strategic decisions without getting bogged down in unnecessary details.

A Culture of Learning and Experimentation: Jensen fosters a culture of continuous learning and experimentation at Nvidia. He encourages employees to take risks, challenge assumptions, and embrace new ideas.

12. The Big Bang: Nvidia's AI-Driven Transformation

We’re all of them.

The AI Explosion: The release of ChatGPT in late 2022 triggered an explosion of interest in artificial intelligence. Companies across industries began exploring ways to use AI to improve their products, services, and operations.

Nvidia's Dominance in AI: Nvidia's GPUs, powered by CUDA and optimized for deep learning, became the preferred choice for AI developers. The company's early investments in AI and its strong ecosystem of software tools and libraries gave it a significant competitive advantage.

A Trillion-Dollar Market: Jensen believes that AI will create a massive new market for computing hardware and software. He is positioning Nvidia to be at the center of this transformation, driving innovation and shaping the future of AI.

Last updated: March 8, 2025