NVIDIA
History
Inflection points
NVIDIA was founded in 1993 (Denny's diner, San Jose, California (founded over coffee)). Every turn Acquired identified: founding, leadership changes, strategic pivots, crises, cultural moments.
Events and financial outcomes
Hinton, Krizhevsky, Sutskever train an 8-layer CNN on two GeForce GTX 580s. Crushes ImageNet by 10+ points. The deep-learning era begins on NVIDIA hardware. CUDA bet pays off.
Event source: Acquired episode II
| Measure | FY2011 · 2011-01-30 | FY2014 · 2014-01-26 | Change |
|---|---|---|---|
| Revenue | $3.5B | $4.1B | $587M |
| Operating margin | 7.2% | 12.0% | 4.8 pp |
| Net income | $253M | $440M | $187M |
| Operating cash flow | $676M | $835M | $159M |
| Capital expenditures | $98M | — | Not available |
Reporting periods outside the event year; changes also reflect other decisions, market conditions, and accounting.
Case question. Which revenue, cost, or capital decision could explain the outcome, and what evidence would separate its effect from changes in the market?
The story
Three engineers from Sun, AMD, and IBM met repeatedly at a Denny's near 280 in San Jose because nobody had an office. The bet: gaming would drive demand for compute that CPUs couldn't deliver, and the same architecture would later serve other parallel workloads. They survived two near-death moments — the NV1 failure in 1995 and the cancelled Sega contract in 1996 — before the RIVA 128 (1997) finally established product-market fit. Jensen has run the company for 33+ consecutive years; founder-CEO continuity at this duration is itself a strategic asset.
Inflection points · grouped by decade
1990s
- 1993Founding
NVIDIA founded at Denny's, San Jose
Jensen Huang, Chris Malachowsky, Curtis Priem incorporate the company. Initial $200K funding from Sequoia (Don Valentine).
[Acquired episode I]
- 1995Product
NV1 ships — and fails
First product uses quadratic texture mapping instead of triangles. Microsoft's Direct3D standardises on triangles; NV1 becomes obsolete on arrival.
[Acquired episode I]
- 1996Crisis
Sega cancels the NV2 contract
Sega had paid $7M for NV2 chip development for the Dreamcast. Mid-development they cancel and move to PowerVR. NVIDIA has months of runway left.
[Acquired episode I]
- 1997Product
RIVA 128 saves the company
Triangle-based GPU shipped with $80M in sales the first year. Validates Jensen's pivot and the architectural choice. The company survives.
[Acquired episode I]
- 1999IPO
NVIDIA IPO + GeForce 256 launch
IPO at $12/share on NASDAQ. GeForce 256 is the first product marketed as a 'GPU'; introduces hardware T&L.
[Acquired episode I + NVIDIA S-1]
2000s
- 2006Strategic shift
CUDA launches
General-purpose compute API for NVIDIA GPUs. The bet: someday someone will need parallel compute for non-graphics workloads. Decade-early — nobody believes for years. Becomes the core moat.
[Acquired episode II]
2010s
- 2012Cultural
AlexNet wins ImageNet on GeForce GPUs
Hinton, Krizhevsky, Sutskever train an 8-layer CNN on two GeForce GTX 580s. Crushes ImageNet by 10+ points. The deep-learning era begins on NVIDIA hardware. CUDA bet pays off.
[Acquired episode II]
- David:The AlexNet team went out to their local Best Buy or equivalent in Canada. They bought two GeForce GTX 580s, which were the top-of-the-line cards at the time, and they wrote their algorithm, their convolutional neural network in CUDA, in NVIDIA's software development platform for GPUs, and by God they trained this thing on $1000 worth of consumer-grade hardware.[Acquired NVIDIA Part III, ch. AlexNet moment]
- David:This AlexNet moment and these three researchers from Toronto kicked off — Jensen calls it and he's absolutely right — the big bang moment for AI.[Acquired NVIDIA Part III, ch. AlexNet moment]
- 2016Product
DGX-1 — AI supercomputer in a box
First purpose-built deep-learning system. Jensen personally hand-delivers serial number 0001 to Sam Altman at OpenAI.
[Acquired episode II + 2017 OpenAI blog]
- 2019Acquired co.
Acquires Mellanox for $6.9B
Buys high-speed networking (InfiniBand). Locks in the data-center bandwidth layer that AI clusters depend on. Becomes the second moat alongside CUDA.
[Acquired episode II]
- David:NVIDIA has done three things over the last five years. One and probably most importantly related to what you're talking about — they made one of the best acquisitions of all time back in 2020, and nobody had any idea. They bought a quirky little networking company out of Israel called Mellanox.[Acquired NVIDIA Part III, ch. Mellanox acquisition]
- Ben:In March of 2019, NVIDIA announced they were acquiring Mellanox for $7 billion in cash. I think Intel was considering the purchase and then NVIDIA came in and blew them out of the water. It is fair to say nobody really understood what NVIDIA was going to do there and why it was so important.[Acquired NVIDIA Part III, ch. Mellanox acquisition]
2020s
- 2022-11Market
ChatGPT releases — every cloud needs more GPUs
OpenAI ships ChatGPT. Hyperscalers panic-buy NVIDIA. The 16-year CUDA bet compounds in 18 months.
[Acquired episode III]
- 2024-03Product
Blackwell architecture announced at GTC
B100/B200 chips + NVL72 rack-scale system. Jensen markets it not as a chip but as 'one giant GPU' (72 GPUs in a single coherent memory domain).
[Acquired episode III + NVIDIA GTC 2024 keynote]
- 2024-06Market
NVIDIA briefly becomes world's most valuable company
Market cap touches $3.6T, passing Microsoft and Apple. The CUDA + system bet is fully repriced.
[Public market data]
- 2026-01Acquired covered
Acquired Part III — The Dawn of the AI Era
Ben and David's third NVIDIA episode crystallises the strategy through the AlexNet → ChatGPT arc.
[https://www.acquired.fm/episodes/nvidia-the-dawn-of-the-ai-era]