How Nvidia Got Huge—and Almost Invincible
Last week, a San Jose Denny’s officially became a part of Silicon Valley lore. The world’s tech capital is crawling with iconic names like Apple and Hewlett Packard that were founded in someone’s garage. Now the chain diner is officially credited as the birthplace of Nvidia, the chip company at the heart of the artificial intelligence revolution.
With local news cameras in tow, Nvidia Chief Executive and co-founder Jensen Huang met Denny’s CEO Kelli Valade to unveil a plaque marking the booth where he and his co-founders sketched out the idea for the company back in 1993. Why the fuss? Nvidia is hardly the first success story to arise from the industry that gave Silicon Valley its name, but it has entered a league of its own. In just a few years, Nvidia went from being a company that got most of its business from chips designed for high-end videogaming to an AI powerhouse valued at more than $1 trillion, joining tech titans Apple, Microsoft, Amazon and Alphabet, the parent of Google.
The first semiconductor company to hit that milestone, Nvidia sports more than twice the market value of at least four chip peers that have more annual revenue. For now. Analysts project Nvidia will more than double its sales to $54.5 billion for this fiscal year, likely overtaking Intel, Qualcomm and Broadcom—an unheard-of pace for a company of Nvidia’s size.
Here is how that happened: GPUs level up Nvidia specializes in graphics processing units, or GPUs—chips designed for display functions such as rendering video, images and animations ideal for demanding videogames typically played on PCs. This has long been Nvidia’s core business, and a pretty lucrative one. Annual revenue from its videogaming segment went from less than $3 billion in
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