Over the past 30 years, the moments when Nvidia was on the brink of collapse are said to have been as deeply imprinted in CEO Jensen Huang's mind as the logo tattoo on his arm.
"From 1993 to 1997, we almost went bankrupt three times. One of the things CEO Jensen Huang once said was that we were 30 days away from going out of business," said billionaire Mark Stevens, one of the first people to participate. joined Nvidia in 1993, told Forbes over the weekend.
Nvidia just reached its peak on June 18 when the capitalization value of this technology company reached the highest level in the world with 3,340 billion USD. The company also only needed 96 days to increase its capitalization from 2,000 billion to 3,000 billion USD, while Microsoft needed 945 days and Apple 1,044 days.
However, Nvidia's rapid growth period has only been since January 2023 when the AI fever exploded globally. Before that, they did not develop as quickly as leading technology companies, and even had periods of being "on the brink".
In April 1993, Jensen Huang, Chris Malachowsky and Curtis Priem founded Nvidia with a capital of 40,000 USD - an amount currently equal to the price of the H100 GPU model. They discussed plans to start a business together at Denny's in San Jose, California. No one paid attention to these three customers who ordered coffee multiple times, except for the wait staff. When Huang said he was manufacturing graphics cards for games, his mother advised him to find a real job.
After that, the founding team began looking for investment partners. Mark Stevens was the first person to join Nvidia. He then worked at VC Sequoia; a fund founded by Don Valentine. VC Sequoia invested $1 million and valued Nvidia at $7 million, according to PitchBook. Stevens joins the company's board of directors. "I didn't come to Nvidia for the money. I love this board and think it might be the best board in America," Stevens said.
Meanwhile, Brooke Seawell, a current venture capitalist, was persuaded to join Nvidia's board of directors in 1997. "Nvidia operates in the ultra-competitive graphics chip sector, and the CEO is just over 30 years old, had never been vice president of any company before founding Nvidia," Seawell recalled.
In parallel with calling for investment, Nvidia began producing its first product in 1995. However, this graphics card was considered a "disaster", forcing Huang to lay off half of his workforce.
Running out of money and facing the risk of bankruptcy, he bet on the 1997 chip model. According to a podcast posted on VC Sequoia's channel, during the development of the second chip, Huang and his team realized the architecture was completely wrong. He sought to turn things around by reverse engineering the third version, while prioritizing software development first.
This approach saved Nvidia. In the context of running out of capital, chips help the company "come back from the dead". More importantly, good sales give Huang and the Nvidia leadership team confidence that they are starting to move in the right direction.
By 1999, Nvidia was listed on the stock exchange, opening more than 10 brutal years with two other near-bankruptcies due to the dot-com bubble and the global financial crisis. The company's capitalization never exceeded $10 billion until 2014. In 2021, the company reached $800 billion but then declined.
In early 2022, the company announced an important breakthrough: H100 - the most powerful GPU graphics processor ever made but received almost no attention. Experts say the company chose the wrong announcement time because technology businesses are tightening spending and continuously laying off personnel.
In November of the same year, ChatGPT was released. Two months later, the generative AI craze took hold globally. The need to build data centers for AI training makes the H100 chip sought after and scarce. Nvidia briefly joined the trillion-dollar club alongside Apple, Microsoft, Google and Amazon last year before climbing to the top of the world today.
Recalling this time, Huang said he did not want to go back 30 years ago to establish a company, after what he had gone through. He also tattooed the Nvidia logo on his arm, viewing the company as a part of his body.
"At that time, if I realized the pain and suffering that was about to happen, the hurt that was about to happen, the trials that were about to be endured, the confusion, the shame, and the long list of things that were going wrong, I thought to myself didn't start a company and no one dared to do this," Huang said in the Acquired podcast in October 2023. "No one is sane enough to do that."
According to Huang, running Nvidia is "a million times more difficult" than he could have imagined. He said to overcome, you must "trick your brain", thinking that everything becomes easy when you try. According to him, the key to "surviving" in the entrepreneurial journey is "being surrounded by people who have never once given up on the company", as well as employees who always support him.
Last year, Huang was considered the most successful person of the year, after singer Taylor Swift. According to the New Yorker, Nvidia's unofficial motto is the slogan Huang coined in the early years of his tumultuous startup: "Our company is 30 days away from shutting down."
Seawell, who has been on Nvidia's board for nearly 27 years, credits Huang's leadership with steering the company's business operations steadily after a long period of hardship.
"AI is a concept that has existed for decades. But Jensen saw that with enough computing power, it could become more practical and realistic. He was right," Seawell told Forbes. "Jensen will be the first to say that Nvidia has gone through a lot of ups and downs and made a lot of mistakes. But also, that Nvidia has learned from its mistakes and is constantly getting better."