Acquired NVIDIA Part I: The GPU Company (1993-2006)

Category: Acquired Podcast (Deep Dives) · Duration: 124 min · ▶ Watch

Speakers: Ben Gilbert and David Rosenthal

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Segments (14)

  • 00:00 · Introduction and Announcements
    • The hosts introduce the episode and make some announcements.
  • 01:08 · Welcome to Acquired: NVIDIA
    • An overview of NVIDIA’s current market dominance and the premise of the episode.
  • 02:48 · Jensen Huang’s Early Life
    • Jensen’s childhood, moving from Taiwan to a reform school in Kentucky, and then to Oregon.
  • 12:32 · College and Early Career
    • Jensen studies electrical engineering, works at AMD, and then joins LSI Logic.
  • 20:33 · The Founding of NVIDIA
    • Jensen, Chris Malachowsky, and Curtis Priem meet at Denny’s to discuss starting a 3D graphics company.
  • 26:50 · Funding from Sequoia
    • Jensen pitches Don Valentine at Sequoia Capital and secures initial funding.
  • 31:00 · The NV1 and Sega Deal
    • NVIDIA develops the NV1 using quadrilaterals and partners with Sega, but the industry moves towards triangles.
  • 39:26 · Near Bankruptcy and the Pivot
    • The NV2 fails, Sega bails them out, and NVIDIA pivots to build the Riva 128 using triangles.
  • 45:14 · The 6-Month Product Cycle
    • NVIDIA adopts an aggressive 6-month product cycle to outpace competitors.
  • 51:29 · The Riva 128 Success
    • The Riva 128 is a massive success, saving the company and establishing NVIDIA as a major player.
  • 56:00 · The GeForce 256 and the GPU
    • NVIDIA launches the GeForce 256 and coins the term Graphics Processing Unit (GPU).
  • 01:06:00 · The Xbox Deal
    • NVIDIA secures a massive deal to provide the GPU for Microsoft’s original Xbox.
  • 01:23:00 · Acquiring 3dfx
    • NVIDIA acquires the assets of its former rival, 3dfx Interactive.
  • 01:30:00 · Programmable Shaders
    • NVIDIA introduces programmable shaders, laying the groundwork for general-purpose GPU computing.

Specific Prices (8)

Timestamp Item Value Context
17:23 LSI Logic IPO Venture Return $153 million The return Sequoia Capital made on their investment in LSI Logic.
30:38 NVIDIA Initial Funding $2 million The total amount raised in NVIDIA’s first round from Sequoia and Sutter Hill.
30:45 NVIDIA Post-Money Valuation $6 million The valuation of NVIDIA after their initial funding round.
39:43 NVIDIA Memory Cost $200 The cost of the memory components for NVIDIA’s early chips, which became a disadvantage when memory prices dropped.
48:24 Hardware Emulator $1 million The cost of the IKOS hardware emulator NVIDIA bought to test the Riva 128 before manufacturing.
01:08:00 Xbox Deal Value $500 million per year The estimated value of the contract for NVIDIA to supply GPUs for the Xbox.
01:08:00 Xbox Deal Advance $200 million The upfront advance Microsoft paid NVIDIA as part of the Xbox deal.
01:28:00 3dfx Acquisition Cost $70 million cash + 1 million shares The price NVIDIA paid to acquire the core assets of 3dfx.

Memory Facts (1)

  • [39:33] NVIDIA’s early chips were designed to be tight on memory, using components that cost about $200, while competitors used architectures that required more memory but benefited when memory prices dropped to around $50.
    • $200 vs $50

Bottleneck Claims (1)

  • [37:13] Software emulation of graphics chips was incredibly slow.
    • Evidence: When testing the Riva 128 on the emulator, it could only render one frame every 30 seconds.

Predictions (1)

  • [33:53, Long-term (realized over the next few decades).] 3D graphics would become the biggest entertainment medium.

Key Technologies (3)

  • ASIC (Application-Specific Integrated Circuit): Custom-designed chips for specific functions, which LSI Logic pioneered.
  • GPU (Graphics Processing Unit): A specialized processor designed to accelerate graphics rendering, a term coined by NVIDIA with the GeForce 256.
  • Programmable Shaders: Allows developers to write custom code to control the rendering pipeline, moving away from fixed-function graphics.

Companies Mentioned (8)

NVIDIA · AMD · LSI Logic · Sequoia Capital · Sega · Microsoft · 3dfx Interactive · TSMC

Notable Quotes (3)

My will to survive exceeds almost everybody else’s will to kill me. — Jensen Huang @ 04:12

If you lose my money, I’ll kill you. — Don Valentine @ 30:05

If you’re not reinventing yourself, you’re just slowly dying. — Jensen Huang @ 01:14:08

Key Topics

NVIDIA History · Jensen Huang Biography · 3D Graphics Evolution · Venture Capital Funding · Semiconductor Manufacturing · Corporate Strategy and Pivots

Takeaways

  • NVIDIA’s survival was driven by Jensen Huang’s intense determination and willingness to make bet-the-company pivots.
  • The decision to adopt a 6-month product cycle allowed NVIDIA to out-innovate established competitors.
  • Investing in simulation and emulation tools (like the IKOS emulator) was crucial for executing rapid hardware development without costly manufacturing errors.
  • The shift from fixed-function graphics to programmable shaders (GPUs) laid the foundation for NVIDIA’s future dominance in AI and general-purpose computing.