NVIDIA's stock price has been booming recently, with its market value once exceeding US$3 trillion and surpassing Apple. However, reaching this milestone is not easy, and NVIDIA has also faced bankruptcy. CEO Jen-Hsun Huang shared this story during his graduation speech at National Taiwan University last year and mentioned that without this person, NVIDIA would not exist.
Back in 1993, when games were shifting from 2D graphics to 3D graphics, three young people were discussing starting a company in Silicon Valley at Denny's restaurant. They were Jen-Hsun Huang, Chris Malachowsky, and Curtis Priem, who co-founded it on April 5, 1993. NVIDIA.
It was not easy to operate in the early days, and NVIDIA faced the failure of its first two chips. However, in 1995, Japanese game brand SEGA commissioned NVIDIA to produce display chips for its new generation console DreamCast. Sony's PlayStation was so popular at the time that SEGA had to create a best-selling product to face the competition.
Former SEGA CEO Irimajiri Shoichiro recalled that after meeting Huang Jen-Hsun, he was deeply impressed by his passion and vision. "He (Huang Jen-Hsun) had very strong confidence," so he commissioned NVIDIA to manufacture Dreamcast GPUs.
The SEGA contract provided funding for NVIDIA, but Huang's early strategic mistakes nearly destroyed the company, the most significant of which was the startup's flawed graphics rendering strategy. NVIDIA's initial failed computer 3D processing chips NV1 and NV2 were developed to support the use of quadrilateral rendering of images. However, the industry's pursuit at that time was based on triangular polygon technology. In addition, Microsoft's "Windows 95 DirectX Multimedia Standard" decided to adopt a triangular polygon design, which made Huang Jen-Hsun After more than a year of development, I realized that the design architecture strategy was wrong and the SEGA project had to be abandoned.
Huang Renxun found that the company was in trouble: either it would be completed slowly and die slowly, or it would quit immediately and die immediately. If the SEGA game console was completed, it would create a product that is incompatible with Windows and would lag far behind its competitors. , but if we don’t complete the contract, we will go bankrupt. “No matter which way we go, we will go bankrupt.”
Jen-Hsun Huang described the incident as "shameful and embarrassing." He contacted the then CEO of SEGA (should refer to the U.S. business) Shoichiro Kazuo, and confessed that he could not complete the contract and the game console, and the cooperation must be terminated. He also suggested that SEGA find other partners. At the same time, he also embarrassedly made a request to SEGA for full payment, otherwise NVIDIA would not be able to continue operating. "To my surprise, SEGA agreed, and we lived for 6 more months."
Recalling this rare story, Iris Shoichiro also shared his perspective at the time. He admitted that when he arrived at Huang Renxun's office, he had already prepared for the worst and told Huang Renxun that the Dreamcast launched by SEGA would use a GPU produced by another company. But he still believes in Huang Jen-Hsun and likes him very much. "I want NVIDIA to succeed, in some way."
So he called back to Japan and believed that SEGA should invest in NVIDIA. However, it was not easy to convince his boss to invest in a start-up company that was in jeopardy and could not fulfill its existing contract. However, after some negotiations, Shoichiro was able to obtain NVIDIA's urgent need. The US$5 million life-saving money allowed them to live for another six months.
"That was all the money we had, and his understanding and generosity gave us six months to survive." Huang Renxun pointed out that during this period, NVIDIA worked hard to develop breakthrough products, and finally created the RIVA 128 graphics card (ie NV3) in 1997, saving the company and making NVIDIA famous.
In 2000, Shoichiro Iri resigned as SEGA president. It wasn't until after he left the company that his best decision paid off: SEGA sold NVIDIA stock for about $15 million. Huang Renxun once said, "Without the help of Mr. Jiajiao, NVIDIA would not be what it is today."
