Nvidia recently hit a market cap of $1 trillion, becoming one of just a handful of companies worldwide. The Silicon Valley-based technology giant joins an elite group of companies that includes Microsoft, Amazon, Apple, and Alphabet (formerly Google). But just how did the company, best known for producing graphics cards for PC gaming, become one of the biggest and most valuable companies in the world?
In 1993, Nvidia was founded by Jensen Huang, Chris Malachowsky, and Curtis Priem. The three engineers saw graphics-based computing as the future of computing while also recognizing that video games could have incredibly high sales volumes. The company set about using video games as a way to research markets and generate funds for research and development into improving computing power.
Over the years, Nvidia has become the gold standard for computing, with their graphics cards becoming top-sellers at retailers such as PC International. In addition, the company has moved into other sectors, including cloud gaming, supercomputing, mobile computing, and AI technology. This has seen their market cap increase significantly and led to Nvidia becoming one of the most powerful technology companies in the world.
Nvidia and Video Games
Video games have always been an integral part of Nvidia’s business strategy. Its founders recognized that the video game industry would experience a lot of growth in line with computational power and saw it as an opportunity to drive research into better computing tech.
Early releases of Nvidia graphics cards were capable of creating innovative new techniques such as onboard transformation and lighting. The Nvidia GeForce 256 was released in 1999 and was significantly more powerful than any other product on the market, allowing Nvidia to get ahead of its competition.
The success of Nvidia continued as the company was hired by Microsoft to develop the technology of the original Xbox games console, then the most powerful home games console ever created. While this work took Nvidia engineers away from other projects, it helped to cement the company as one of the leaders in the graphics technology world.
Over the years, Nvidia has faced increasing competition from companies such as AMD, Intel, and Qualcomm but has continued to stay at the top in terms of graphics performance. In addition, the company has moved into other areas of video games, releasing the Nvidia Shield handheld device and launching GeForce Now, a cloud gaming service.
How Nvidia Benefits from AI Trend
Aside from the increasing popularity of video games and the continued technological advances, Nvidia has benefitted from the hype behind AI technology. Nvidia’s latest processor chips, such as the H100, have been integral in developing AI systems capable of acting as language models and image generators.
The generative AI industry has gained a lot of interest globally in recent years, particularly thanks to the success of OpenAI’s ChatGPT model, which is powered by powerful chips. Generative AI has the potential to transform productivity and completely change the way many industries operate, leading to a new era in civilization.
While Nvidia’s shares lost around half their value in 2022, the interest in AI has seen investors scramble to buy up technology shares, and Nvidia is at the forefront of innovation in computing. Analysts Morgan Stanley recently described Nvidia as having “the largest dollar revenue upside in industry history.”
While there are still some concerns over how AI will impact our lives, many believe it represents an opportunity for investment and new businesses. With Nvidia’s continued innovation in technology, there’s little doubt that the company will hold onto its trillion-dollar market cap and be a worthwhile investment for the future.
