How Nvidia became a giant of the chip industry
It’s safe to say Nvidia (NVDA) has become a giant within the chip industry. A leader in the creation of graphics chips and cards for gaming, in addition to content creation, the company has morphed into one of the preeminent artificial intelligence processing companies on Earth.
Founded in 1993 by Jensen Huang (the company’s current CEO), Chris Malachowsky, and Curtis Priem, the trio of engineers didn’t expect the silicon they were building would eventually be chosen to power supercomputers at facilities, including The Energy Department’s Los Alamos National Laboratory.
The firm, which initially focused on gaming and entertainment products, launched its first chip, the NV1, in 1995. While it wasn’t a massive success, it did put Nvidia on video game maker Sega’s map. Sega originally considered using Nvidia’s NV2 chip in its Dreamcast console, but later abandoned the effort.
In 1996, Nvidia launched its first Microsoft (MSFT) DirectX drivers, specialized software used to render 3D graphics on Windows-based PCs. The following year, the company launched its first hit product the NV3, otherwise known as the Riva 128. Nvidia would later go on to sell a whopping 1 million units in the card’s first four months of availability, helping generate revenue for the research and development of future products.
In January of 1999, Nvidia hit the public markets at $12 per share, and by 2000, Nvidia’s market position was strong enough to swallow former rival 3DFX. The same year, Microsoft chose the chip giant to power the graphics in its first Xbox console.
Eventually, Nvidia’s graphics capabilities moved beyond gaming. In 2003, the company not only worked with Blizzard on the launch of its massively popular “World of Warcraft,” it also teamed up with NASA to create a photorealistic simulation of Mars.
Nvidia continued its work with console makers in 2005 when Sony chose the company to power the graphics in its PlayStation 3. Five years later, Nvidia became the graphics chip supplier for Audi, powering the interfaces for the automaker’s various vehicles. In 2015, the company launched its Nvidia Drive chip for powering driver assistance systems.
In 2016, Nvidia went all in on AI with its DGX-1 server for artificial intelligence applications. Since then, the company has continued to pour money into its AI capabilities. The company’s stock price has matched that march, rising from $7.40 per share in 2016 to $70.25 by the end of 2018, thanks to its data center offerings and a run on graphics cards for crypto mining.
Two years later, Nvidia launched its RTX platform, which brought real-time ray-tracing technologies to games and digital graphics spaces. The tech makes it so that lighting in graphics applications looks as realistic as real life, dramatically improving immersion.
Today, Nvidia continues to power the graphics in gaming PCs and consoles around the world. But it’s gone far beyond that. In March 2022, the company debuted its first discrete CPU for data centers and announced it is using its version of the metaverse, called Omniverse, to better understand climate change.
While the global chip shortage has made it difficult for consumers to get their hands on new Nvidia cards, they’re still among the most sought after on the market.
However, Nvidia isn’t alone in the graphics chip market. AMD (AMD) has its own line of powerful Radeon chips, and Intel (INTC) is moving forward with its own discrete graphics chips for laptops and desktops, putting further pressure on Nvidia to continue holding its position as the leader in graphics technology.
Still, for a company that's gone from three engineers working on a graphics card, to thousands of employees working on chips that will power the AI supercomputers of the future, Nvidia remains at the top of its game.
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