Name any major tech brand—from Google to Amazon to Tesla to ChatGPT—and chances are Nvidia is involved in some way.
The computer chip company may not be a household name in the UK, but it has just leapfrogged Microsoft and Apple to become the most valuable public company in the world.
It is now worth more than £3.3tn (£2.6tn) – with the share price up almost 600,000% since it first traded on the US stock market in 1999.
If you had invested $10,000 (£7,850) in the firm then, the shares would now be worth more than $59m (£46m).
Jensen Huang, the co-founder and chief executive of Nvidia, also saw his net worth rise to a staggering $119bn (£93bn), according to Forbes.
But how did it all happen?
Another version of envy
Nvidia was founded in 1993 when Mr Huang met two friends – all engineering graduates – at a Denny’s restaurant in California.
The multi-billionaire worked at a branch of the chain when he was a teenager after immigrating to the US with his family from Taiwan.
Video games were the initial focus of the trio, who wanted to create a computer chip that would help computers display “realistic” 3D graphics.
Mr Huang, 61, said the 24-hour restaurant was an ideal meeting place because it had “all the coffee you could drink and no one could kick you out.”
The caffeine-fueled meeting prompted Mr. Huang, along with friends Chris Malachowsky and Curtis Prie, to soon set to work in an apartment in Fremont, California.
They came up with the name Nvidia by combining NV – which means “next version” – with “Invidia”, the Latin word for envy.
The friends hoped to speed up computing so much that they would leave their rivals in the dust at a glance – a mentality that also inspired the company’s logo, which features an envious “green” eye.
The Nvidia logo features an “envious” green eye. Image: Reuters
Smart chips
In the 1990s, the computer chip market was dominated by companies such as Intel, a key manufacturer of central processing units (CPUs), the key foundation of basic computing and software processes.
However, Nvidia was able to carve out a niche by focusing instead on graphics processing units (GPUs), which are an important element in computer games because they help render images.
The company built a reputation for helping revolutionize electronic entertainment and went public in 1999.
Microsoft’s Peter Parsons plays the hit game Halo on the original Xbox console in 2001. Picture: Reuters
Among Nvidia’s early successes was its GeForce graphics card, which could be attached to a computer to boost its performance.
Writer Stephen Witt stated that the first popularity of the device was mainly due to the Quake series of first-person shooters.
The company soon scored another coup when it signed on to become the exclusive graphics provider for Microsoft’s first Xbox game console in the year 2000.
However, it soon became clear that the company’s GPUs could be useful beyond shooters, platformers, and role-playing games.
Smart bet
Engineers realized that the chips were able to perform calculations in a way that conventional CPUs could not – making them more energy efficient and better able to handle sophisticated computing tasks.
So in the mid-2000s, Nvidia began selling its products to other types of technology firms before branching out further with massive investments in Artificial Intelligence (AI) in 2010.
One example was car manufacturers, who soon turned to the company for help with driver assistance software. The impact was so great that Nvidia hardware is now found in everyone Tesla vehicles.
The company has also been able to use its dominant and advanced position in GPUs to steal a march on its rivals and produce its chips faster and in higher volumes.
A staff member shows off Nvidia’s latest GeForce lineup at a computer show in Taiwan. Image: Reuters
However, the company’s early gamble with artificial intelligence, such as developing machine learning features in its products, brought it to the top.
Mr Huang told Sky News’ US partner NBC News in an interview last year: “We just believed that one day something new would happen and the rest required a bit of chance.”
Asked whether the AI ​​company’s subsequent success was the result of luck or foresight, he said: “It wasn’t foresight.
Bryan Catanzaro, who began working on AI when he joined Nvidia in 2008, told NBC News, “For 10 years, Wall Street has been asking Nvidia, ‘Why are you making this investment? Nobody’s using it.’
From billions to trillions
The company’s journey to becoming the king of the stock market was not without stumbles.
He made an unsuccessful attempt to break into the smartphone market in 2010 – Mr Huang admitted he had made “a lot” of mistakes over the years.
But in time The covid-19 pandemic in 2020, companies began to turn more and more to AI – and Nvidia’s bet started to pay off.
Among the companies using its technology was ChatGPTwhich was soon followed by a flurry of imitators.
A Wall Street analyst told the New Yorker last year, “There’s a war going on in AI, and Nvidia is the only arms dealer.”
Today, seemingly every major company in Silicon Valley, including Amazon, Google, Meta and Microsoft, uses its chips, and it is estimated that it controls more than 80% of the market for technologies used in AI systems.
Nvidia’s success has only accelerated in recent months. It reached a market valuation of $2 trillion in February and then overtook it Apple to number two earlier this month.
It finally climbed to the top of the stock market on Tuesday after adding more than $100bn (£79bn) to its market value in a single day.
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Analysts said demand was boosted by a stock split earlier this month that created more shares and made them more attractive to individual investors.
But while demand for Nvidia’s products currently outstrips supply, its top spot is likely to continue to be under threat in the coming months and years as firms like Microsoft invest heavily in AI in an attempt to catch up.