People with very high expectations for themselves often have low resilience.
Written by: Deep Tide TechFlow
On October 30, NVIDIA's market value surpassed $500 billion, exceeding the annual GDP totals of developed countries like Japan and Germany.
From its IPO at $12 in 1999, NVIDIA has generated over 8000 times returns over the past 26 years, considering stock splits.
What makes NVIDIA most enviable is its "insensitivity to cycles," consistently serving as foundational infrastructure, continuously "collecting taxes," regardless of what you do.
As the creator of GPUs, NVIDIA seized the opportunity of the "PC wave," entering countless households alongside the explosion of the gaming market;
Then, as the gaming business softened, the crypto bull market arrived, and NVIDIA graphics cards were widely used for "mining" cryptocurrencies like Ethereum, quietly amassing wealth;
Subsequently, with the rise of the smart car industry, its automotive chip business also rapidly developed;
Finally, with the emergence of ChatGPT, NVIDIA transformed into an AI arms dealer…
Looking back at NVIDIA's growth history, it has also hovered on the brink of failure and bankruptcy multiple times. Jensen Huang (Huang Renxun) once shouted: "My will to survive exceeds almost everyone’s will to kill me."
NVIDIA, the Creator of GPUs
The birth of graphics cards (GPUs) dates back to the 1990s.
At that time, some people in Silicon Valley proposed an idea: to alleviate the workload of the central processing unit (CPU) by using specialized chips for specific functions, such as sound cards for audio processing and network cards for networking. Similarly, it was logical to create a chip specifically responsible for computer image output, known as a graphics card. For example, Sony's PlayStation, launched in late 1994, used a graphics card to process images.
However, there were many technical paths for graphics cards at that time. **NVIDIA found its breakthrough point by achieving 3D graphics acceleration through **parallel computing, especially applied in the gaming field. Parallel computing refers to breaking down a complex task into multiple smaller tasks and processing them simultaneously to improve computational efficiency.
In 1999, NVIDIA launched a graphics card named GeForce. This card was designed specifically for gaming, focusing on "parallel computing," significantly enhancing 3D graphics processing capabilities to provide a smoother and more realistic gaming experience.
The success of GeForce allowed NVIDIA to rapidly rise and become a leader in the graphics card field.
At that time, NVIDIA was not the only company researching graphics processing units, but it successfully deeply associated itself with the label of "GPU inventor."
NVIDIA's then marketing head, Dan Vivoli, used the concept of "graphics processing unit" (GPU) to promote its chips, believing that by repeatedly emphasizing that NVIDIA was the GPU inventor, it could become the industry leader.
Indeed, NVIDIA became synonymous with GPUs, paving a new path for itself by marketing GPUs.
NVIDIA, the Big Winner of the Crypto Bull Market
NVIDIA's market value rose from $14 billion in 2016 to a peak of $175 billion in 2018, with the more than tenfold increase over two years likely linked to the cryptocurrency mining boom.
In 2017, the cryptocurrency market experienced a bull run, attracting a large number of miners competing for GPUs, turning GPUs into cash printing machines, with global graphics card sales skyrocketing and prices soaring.
Taking the NVIDIA GTX 1060 model used by miners as an example, the price before May 2017 was about 1650 yuan per card, which surged to around 2900 yuan after June 2017.
NVIDIA became the big winner behind the cryptocurrency bull market, receiving a windfall.
Benefiting from the crypto mining craze, NVIDIA's total revenue for the 2018 fiscal year reached a record high of $9.7 billion. Huang Renxun stated, "Our GPUs support the world's largest distributed supercomputing, which is why they are so popular in the cryptocurrency field." Additionally, NVIDIA launched the GTX 1060 3GB and professional mining cards P106 and P104 specifically tailored for mining.
In 2020, after two years of bear market, the crypto market took off again, with Bitcoin rising more than twice and Ethereum rising fourfold, making NVIDIA a beneficiary of the "crypto boom" once more.
NVIDIA acted quickly, actively participating in the mining market, launching the CMP series of professional mining cards, which removed graphics processing functions and had lower core peak voltage and frequency to improve mining performance and efficiency.
At the end of 2020, NVIDIA released the RTX 30 series graphics cards, with the entry-level RTX 3060 priced at 2499 yuan and the RTX 3090 priced at 11999 yuan. However, as cryptocurrency prices surged, the RTX 3060 sold for as high as 5499 yuan, and the RTX 3090 skyrocketed to 20000 yuan.
After the first quarter financial report of 2021 was released, NVIDIA's CFO Colette Kress revealed that NVIDIA's sales of crypto chips reached $155 million, with graphics cards used for "mining" accounting for a quarter of total sales in the first quarter.
In 2021, NVIDIA set a record with total revenue of $26.91 billion, a 61% increase from the previous fiscal year, and its market value briefly surpassed $800 billion. However, the good times did not last long. In September 2022, Ethereum's execution layer and proof-of-stake consensus layer completed their merger, transitioning the Ethereum blockchain network mechanism from PoW (proof of work) to PoS (proof of stake), gradually ending the era of graphics card mining.
This also affected NVIDIA's development to some extent. In the third quarter of 2022, NVIDIA's revenue and net profit both declined, with quarterly revenue of only $5.931 billion, a year-on-year decrease of 17%, and net profit of only $680 million, a staggering year-on-year decline of 72%. On November 23, 2022, NVIDIA's stock price was reported at $165 per share, nearly halving from its peak last year.
At that time, both overseas media like "Financial Failures" and domestic tech media were pessimistic about NVIDIA.
In extreme difficulty, unexpectedly, a turnaround occurred as AI and large models gained momentum, and NVIDIA once again stood at the forefront.
NVIDIA, the AI Arms Dealer
In March 2016, AlphaGo defeated Lee Sedol, shocking the world and sparking a heated discussion about AI.
A month later, Huang Renxun officially announced at the GTC China conference that NVIDIA was no longer a semiconductor company but an artificial intelligence computing company.
In August 2016, a historic moment was born when NVIDIA donated its first AI supercomputer, the DGX-1, to the newly established OpenAI, with Huang Renxun personally delivering the computer to OpenAI's office, where then-chairman Elon Musk opened the package with a box cutter.
Huang Renxun left a message: "For computation and the future of humanity, I donate the world's first DGX-1."
Subsequently, OpenAI trained the globally popular ChatGPT using NVIDIA's supercomputer, and NVIDIA's updated hardware product, the DGX H100, was in high demand, with supply unable to meet demand.
Rome wasn't built in a day; NVIDIA's dominance in the AI industry began with earlier accumulations.
NVIDIA's former chief scientist, David Kirk, had long dreamed of generalizing the 3D rendering power of GPUs, not limited to the gaming field.
Under the leadership of David Kirk and Huang Renxun, NVIDIA launched the revolutionary GPU unified computing platform CUDA in 2007, unleashing vast computational resources.
However, at that time, CUDA failed to impress investors; instead, due to the massive investment in creating a "supercomputing" system ahead of its time, NVIDIA's profits were significantly reduced, and Wall Street booed.
Ben Gilbert, host of the popular Silicon Valley podcast "Acquired," commented: "They were not targeting a large market but rather an obscure corner of academic and scientific computing, yet they spent billions of dollars on it."
The external voices did not deter Huang Renxun; his persistent investment in CUDA over the years allowed NVIDIA to achieve its current status.
Huang Renxun views computational power as core. Whether in AI, autonomous driving, the metaverse, robotics, or cryptocurrency, NVIDIA is always looking for new opportunities using its vast computational power.
Computational power, NVIDIA's eternal weapon.
Three Failures
In 2023, Huang Renxun delivered a speech at the graduation ceremony of National Taiwan University, sharing three stories of failure to impart NVIDIA's secrets of success to the students.
The first failure was surviving on the brink of bankruptcy.
In 1994, NVIDIA's first customer was the Japanese gaming company SEGA, for which they designed graphics cards for its gaming console.
However, the following year, Microsoft released the graphics interface Direct3D for the Windows platform, causing NVIDIA to feel very anxious due to conflicts with their design.
Ultimately, NVIDIA chose to terminate its contract with SEGA and instead develop GPUs for the Windows platform. This was a risky decision, as SEGA was their only customer, which they abandoned. NVIDIA's funds could only support them for six months, and if they could not launch a new product within that time, they would face the risk of bankruptcy.
Fortunately, just one month before running out of funds and on the brink of bankruptcy, NVIDIA designed the Riva 128 chip and achieved success. By the end of 1997, shipments of the Riva 128 exceeded one million units, allowing NVIDIA to survive.
The Second Failure: Giving Up Short-Term Profits for Future Greatness.
In 2007, NVIDIA launched the CUDA GPU acceleration computing program, envisioning CUDA as a programming model that could enhance various applications, from scientific computing and physical simulations to image processing.
Creating a new computing model is very challenging; since the introduction of the IBM System 360, the CPU computing model has existed as an industry standard for 60 years.
CUDA required developers to rewrite applications to showcase the benefits of GPUs; however, to develop such programs, a large user base and significant demand were needed to drive developers to create.
To solve the "chicken or egg" problem, NVIDIA leveraged its existing large base of gamers using GForce graphics cards to build a user community. However, the additional costs of CUDA were very high, leading to a significant decline in NVIDIA's profits over the years, with its market value fluctuating around the $1 billion mark.
NVIDIA's years of underperformance also led shareholders to be skeptical about CUDA. Shareholders preferred the company to focus on improving profitability, but NVIDIA persevered, believing that the opportunity for accelerated computing would come.
Jensen Huang founded a conference called GTC to tirelessly promote CUDA worldwide. Ultimately, hard work paid off, and applications began to emerge, including CT reconstruction, molecular dynamics, particle physics, fluid dynamics, and image processing.
By 2012, AI researchers discovered the potential of CUDA. Renowned AI expert Alex Krizhevsky trained AlexNet on the GForce GTX 580, triggering an explosion in artificial intelligence.
The Third Failure: NVIDIA Exits the Mobile Chip Market.
Do you remember the joint appearance of Lei Jun and Jensen Huang?
In 2013, at Lei Jun's invitation, Jensen Huang attended the launch event for the Xiaomi Mi 3.
Having moved to the United States at a young age, Huang was asked by Lei Jun to speak in Chinese. He spoke with some difficulty but confidently exclaimed in Chinese: “NVIDIA's GPU is the best in the world.”
At that time, the flagship Xiaomi Mi 3 was equipped with NVIDIA's Tegra 4 mobile processor, marking the end of that series.
During that period, as the mobile phone market was rising, NVIDIA also entered the mobile chip market. Although the entire mobile phone market was vast and NVIDIA could have fought for market share, they made a difficult decision: to exit this market.
Jensen Huang stated that NVIDIA's mission is to build computers that ordinary computers cannot, and they should focus on realizing this vision and making a unique contribution. NVIDIA's strategic withdrawal paid off.
Life Advice: Experience Hardship, Lower Expectations
In 2024, Jensen Huang returned to his alma mater, Stanford University, and gave a speech at the business school, sharing some life experiences.
When the host asked Huang for advice to Stanford students regarding success, he replied: “I hope you all have the opportunity to experience a lot of pain and hardship.”
He mentioned that one of his greatest strengths is “my expectations are very low.”
Huang stated that most Stanford graduates have very high expectations for themselves, but they absolutely deserve high expectations because they come from one of the best universities on Earth, surrounded by equally incredible peers, making high expectations very natural.
“People with very high expectations for themselves often have low resilience,” Huang said, “Unfortunately, resilience is crucial for achieving success.”
Huang emphasized, “Success does not come from intelligence, but from character, and character is shaped by experiencing hardship.”
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