A lucky bet and unlimited coffee: How Nvidia become the world's most valuable company

Think of any top technology company - be it Google, Amazon, Tesla or even ChatGPT - and you'll probably find that Nvidia has a hand in their operations.

While not well-known in households throughout the UK, the business that creates computer chips has surpassed Microsoft and Apple in value, securing its position as the most valuable public company worldwide.

As of now, it has a value of over $3.3tn (£2.6tn), and its shares have increased by nearly 600,000% since its debut in the United States stock market in 1999.

Imagine if you had put in $10,000 (£7,850) into the company in the past, you would now have stocks worth over $59m (£46m).

Jensen Huang, who started Nvidia and serves as its top executive, has experienced a significant increase in his net worth, amounting to a remarkable 119 billion US dollars (approximately 93 billion pounds), as Forbes reported.

So, how exactly did this come to be?

In 1993, Mr Huang joined forces with two engineering graduate pals and they had a fateful meeting at a Denny's restaurant in California. This is how Nvidia came to be established.

The individual who possesses billions of dollars previously held a job at one of the outlets of the franchise during his adolescence subsequent to relocating to the United States alongside his family from Taiwan.

The group's primary goal was to design a computer chip that could enhance PCs graphic capabilities for 3D gaming. Video games were what motivated them to pursue this project.

According to Mr Huang, who is 61 years old, the 24/7 restaurant is a perfect location for meetings since it offers "unlimited coffee and there's no risk of being kicked out."

After a stimulating session of caffeine, Mr. Huang and his buddies Chris Malachowsky and Curtis Priem were motivated to start their business venture, which they began working on from an apartment in Fremont, California.

The name Nvidia was created by merging two words - NV, representing "upcoming edition," and "Invidia," which is the Latin term for jealousy.

The pals wanted to accelerate the processing speed of computers to outdo their competitors, a mindset that influenced the company's logo showcasing a covetous "green" eye.

During the 90s, businesses like Intel were in control of the computer chip industry. Intel made central processing units (CPUs) that were essential for fundamental computing and software tasks.

Nevertheless, Nvidia established a niche for itself by directing its attention towards graphics processing units (GPUs). These components play a significant role in the world of computer gaming as they aid in generating images.

The organization established a renown for contributing to the transformation of electronic amusement and became publicly traded in 1999.

In the beginning, Nvidia achieved great results with their GeForce graphics card that can be connected to a computer to enhance its performance.

According to Stephen Witt, the initial success of the device was mainly fueled by the popularity of first-person shooter games such as Quake.

The organization attained another success by securing an exclusive contract to provide graphics for Microsoft's debut Xbox gaming system in the year 2000.

Nevertheless, it was later discovered that the GPUs of the company could have potential utility beyond the genres of shooting, jumping, and immersive storytelling games.

Engineers discovered that the chips had the ability to carry out computations in unique ways, surpassing the capabilities of traditional CPUs. This made them highly energy-efficient and more adept at managing complex computing duties.

In the middle of the 2000s, Nvidia started promoting its goods to various tech companies. Later, it expanded its reach by making significant investments in the field of artificial intelligence during the 2010s.

A case in point was the automobile industry - which swiftly sought assistance from the company for developing driver-assistance software. This had such a significant impact that all Tesla vehicles now incorporate Nvidia's hardware.

Additionally, the corporation managed to gain an advantage over its competitors by exploiting its powerful and innovative position in GPUs, resulting in faster production and higher quantities of its own chips.

Nonetheless, it was the business's initial risk with artificial intelligence, such as creating machine-learning attributes in its merchandise, that boosted it to the summit.

During an interview with NBC News, which is Sky News' US partner, Mr. Huang said the following last year: Our belief was centered around the idea that one day, there would be a new development, and the remaining aspects rely on some element of luck or chance.

When questioned regarding whether the company's success with artificial intelligence was due to chance or future perception, he answered: "It was not a matter of future perception. The future perception was the advancement of computing speed."

Bryan Catanzaro started his work on AI when he became a member of Nvidia in 2008. He explained to NBC News that for a whole decade, Wall Street inquired about Nvidia's investment into AI, questioning why they were putting resources into it when it appeared that nobody was utilizing it.

Going from a huge amount to an even bigger amount.

The path of the company towards becoming the ruler of the stock market has been bumpy, encountering some obstacles along the way.

Back in 2010, they tried to break into the smartphone industry, but it didn't go as planned. Mr. Huang even admitted to making many mistakes throughout the years.

In 2020, during the outbreak of COVID-19, companies became more reliant on AI, and as a result, Nvidia's investment in this technology began to yield positive results.

Several companies started using the same technology as ChatGPT, and soon after, many more copied them.

According to an analyst from Wall Street who spoke to the New Yorker last year, there is currently a conflict occurring in the world of artificial intelligence, with only Nvidia acting as the sole provider of necessary technology.

In recent times, it appears like all the significant tech firms based in Silicon Valley, like Amazon, Google, Meta, and Microsoft, have utilized its microprocessors. It is speculated that this company has a stronghold on over 80% of the market share for artificial intelligence technology.

Nvidia has been achieving even more success lately. In February, their market value reached an impressive $2tn. And just recently, they surpassed Apple to become the second most valuable company.

On Tuesday, the stock market finally reached its peak, having gained an impressive $100 billion (£79 billion) in market value in a single day.

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Experts stated that the market's interest increased due to a recent stock split that resulted in a higher number of shares, which then caught the attention of individual investors.

Despite the high demand for Nvidia's products at present, it is probable that their leading position will face challenges over the following months and years. This is due to the fact that other companies, like Microsoft, are investing heavily in AI to keep up with the pace.