Nvidia’s Unforgettable Journey From Bankruptcy to $1 Trillion Market Cap
Dinosure | 1997 | Dotcom bubble | TSMC | Power of GPU
The first thing that comes to my mind when I hear the name Nvidia is the graphics card, which is widely used in gaming nowadays. I am sure that the stock price of Nvidia must have popped up into the mind of the fans of the Wall Street movie.
Do you know that Nvidia was on the verge of going bankrupt in 1997, yet its stock price increased from $40 to $480 during 2018–2023? I am quite happy for those who had kept Nvidia stock for five years because if anyone who had kept it for five years may have multiplied their money by 10 times.
When I saw Nvidia’s stock price I got confused and thought that Nvidia has been developing graphic cards since 1997, but what happened in the previous 5 years that caused its stock to skyrocket? You will be quite shocked to know that this company’s market worth has now surpassed $1 Trillion. The Nvidia company is currently working on some unique things which will make the technology more advanced.
You might be thinking that Nvidia only manufactures graphics cards? The answer is NO. Now the world’s giant companies like Apple, Microsoft, and Google are scared of Nvidia.
Today in this article we will discuss an exciting story of Nvidia and why the world’s big giants are now getting afraid of Nvidia.
1993
The story of Nvidia begins in 1993. I do not whether you know or not but in this year 1993 Jurassic Park movie was released, this movie earned more than $900 million, which makes Jurassic Park the highest-grossing movie. For the youngster of the current generation, Jurrasic Park may not be appealing but in 1993 this had made a completely different impact on the audience. But still, what was it about this movie that made it so popular?
The short answer is GRAPHICS, Yes my friends you heard right. The graphics of the movie made this movie a huge hit. In 1993, there were several CGI (computer-generated imagery) movies, but no one had done anything to make dinosaurs appear real or to put dinosaurs in front of people. After that suddenly the demand for 3D graphics started increasing in the market to make dinosaurs and other things more realistic in the movie.
1997
The Computer revolution began in the United States in 1993 because there were very few computers in 1990, but people progressively became interested in the computer world. In 1997, more than 35% of Americans owned computer devices. As the need for computers grew, so did the need to bring in new developments in the computer industry.
As we all know the CPU is regarded as the computer’s brain, all computers before 1997 relied on CPUs to process data. As a result, technology firms believed that CPUs will continue to do all the processing in the future. But we know that nowadays to run heavy software and to play high-end games only a CPU is not sufficient.
3 Friends
Here the hero of our story Nvidia enters. The name of our hero is Jensen Huang, founder of Nvidia. Jensen Huang was born in Taiwan and studied Electric Engineering in America. Jensen Huang and his 2 electric engineer friends Chris Malachowsky, and Curtis Priem believed that the future of accelerated computing would be from graphics.
The three of them strongly believed that the CPU could run the program to some extent, however, accelerated computing would be required to run the heavy application. After seeing CGI-based movies and 3D games, they became certain of their idea of accelerated computing.
On April 5, 1993, these three friends founded the technology company Nvidia, and they raised around $40,000 to begin their operation. In the beginning, Nvidia used to make only graphics for video games.
Jensen Huang had already thought that the chip for the graphic card would be made in such a way that it could be attached to the motherboard. He knows that if he can get succeed, then the GPU will continue to do its work and at the same time, the speed of the CPU will increase. To make this concept a reality, Jensen Huang started developing the GPU.
1997
After 4 years, in 1997, Nvidia made the first high-performance graphic chip. They are already concentrating on innovation instead of the production process. Actually, Nvidia did not have the funds to carry out production, so they planned to outsource it. After developing the graphic card product, they started looking for a company to give the manufacturing contract.
At that time, Jensen Huang gave the chip-making contract to Taiwan’s chip giant TSMC because the accuracy of their chip-making was very high. The special thing is that from 1997 till now TSMC is manufacturing Nvidia’s chips
Here Nvidia only makes a core technology of their graphic card and let the company which is good in manufacturing do their work.
Everyone can do manufacturing, but the one who makes technology is valuable. TSMC manufactures the chip, yet Nvidia’s name is printed on the chip.
1999
Nvidia got success in 1997, but the market crashed two years later in 1999. The stock market fell in 1999 when the dotcom bubble burst. Many companies collapsed during the dotcom bubble, but Nvidia survived because of its innovative product.
In 1999, Nvidia launched a product that created quite an uproar in the gaming industry. The name of this graphic card was GEFORCE 256. At the time of launching this new product, Nvidia announced that it was the world’s first GPU. Now the world knows what GPU can do.
Welcome to the world of GPU…
GEFORCE 256 was such a programmed graphics card of that time which allowed you to change or modify lights/colors, sands, and contrasts. The GeForce 256 saved Nvidia in the dotcom bubble.
2000
Microsoft plans to release a new Xbox product in the year 2000. Microsoft decides to install a graphics card from Nvidia in the Xbox. Nvidia produces a premium-style graphics card for the Xbox. The speed of Nvidia’s growth begins to speed up after their deal with Microsoft for their Xbox.
2004
In the year 2004, Nvidia starts working on a project named CUDA. CUDA (Compute Unified Device Architecture) is a computing platform and programming model. This CUDA changed the working process of graphic cards.
Before the development of CUDA, graphic cards were used to process serial computing, in which the second task could be run only after the completion of the first task.
Processing Performance
After the arrival of CUDA, graphic cards shifted to a parallel computing process, which can run multiple tasks simultaneously. Because of this, after the introduction of CUDA technology, the performance of the Nvidia graphic card increased by 3.6X.
CUDA gave the graphics card the ability to render 3D graphics, encryption and decryption, compression, and video format conversion.
Nvidia started working on a new project after they got success in developing CUDA. But still, among many of their new projects, some of them failed.
2010
In 2010, the company attempted to enter the smartphone market with Tegra 4i processors but failed. After investing time, money, and effort in Tegra 4i, they realized that their expertise is better in graphic cards, so they chose to focus solely on that.
2018
Nvidia had GEFORCE GTX processors, however, in September 2018, Nvidia released new RTX graphics cards. The name of this new graphic card is GEFORCE RTX 2080.
The special thing about GEFORCE RTX 2080 was that it was the world’s first Ray Tracing graphic card.
RTX vs GTX
The GTX series was developed to boost gaming performance. But there is not just gaming in the market where the power of the GPU can be used, thus it is also necessary to have such a card that can be used in other tasks.
So for that, Nvidia developed RTX graphic cards. Nowadays RTX cards are being used in many heavy tasks like designing, 3d large model design, visualization, film production, and crypto mining.
Profit
58% of Nvidia’s revenue comes from graphic cards and the remaining 42% of revenue comes from other categories. In another category from which their 42% revenue comes, they are working on AI-related technology like self-driving cars, crypto mining, robotics, medical research, and architecture.
With all of this Nvidia has reached a market cap of $1 Trillion. So, guys, there are still many things that I want to share with you but If I include those things in this article then our article will become longer.
The second part of Nvidia’s journey will be published soon so please follow me and subscribe to get updates as soon as my new article gets published.
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Disclaimer
I am not a Financial advisor. I am not affiliated with any of the websites or coins and also this is not financial and Investment advice. This article is meant only for educational purposes. I am just sharing my thoughts and analysis based on my many years of experience.