History of NVIDIA: Company and Stock

NVIDIA makes computer processors. The company started out, primarily, in the video game and graphic design market. In the late 90's and early 2000's, it was known mainly as a leading company in the relatively niche high-performance gaming industry.

Today, it is one of the biggest tech companies in the world with a market cap of $2.25 trillion ($NVDA), and it is a main hardware supplier for major emerging technologies such as AI and cryptography. Here's what you need to know.

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NVIDIA's Products and Business

NVIDIA's core business model is the production of specialized, high-end computer processors. These chips are called "graphics processor units," or GPUs.

A GPU is a specialized form of processor. It supports the central processing unit, or "CPU," by taking on specific, high-demand tasks as they emerge. This allows your computer to operate normally while also running demanding software because, instead of having to put all other processes on hold, the CPU can hand off single, complicated calculations to the GPU. In essence, it’s a difference of breadth vs. depth.

A central processing chip is built to handle many different tasks at the same time, and its purpose is to run your computer overall. However, as a result, it has fewer resources for any given task. So, for example, the CPU can run the relatively simple calculations of your operating system, web browser and word processor all at once. But it will take a long time to process very complicated demands, which can slow down your computer overall. To do this, the CPU uses a physical architecture known as “serial processing.”

A graphics processor unit, on the other hand, is built to do one specialized task at a time, and . It can dedicate all of its resources to a single calculation by breaking the task down into smaller, repetitive units, but it cannot handle simultaneous demands. So, for example, a GPU can handle the enormously complicated math of rendering three dimensional images very quickly (historically the most common use case for a GPU), but it would move very slowly if tasked to run four different programs. This is a physical architecture known as “parallel processing.”

The name "graphics processing unit" comes from the fact that, originally, GPUs were mainly used for graphics rendering in video games. Originally these chips were known as "ASICs," or "Application Specific Integrated Circuits. During the 1990's and 2000's, video games overwhelmingly drove the demand for high end consumer-level hardware, and GPUs found an early niche in meeting this demand.

However, that is simply an accident of market demand, not a function of hardware limitations. NVIDIA makes sophisticated computer processors designed to supplement core processing and solve specific, high-demand needs. In recent years, demand for specialized computing has grown significantly. These chips are used, among other industries, for blockchain mines, artificial intelligence processing, and data storage and distribution. As a result, demand for NVIDIA's chipsets has grown, and today industry-specific uses such as data centers and AI have surpassed consumer graphics as the core of the company's business model.

NVIDIA does make a range of additional products beyond the GPU, including laptops, cloud computing, and networking hardware. However the company is overwhelmingly known for their application specific chips, which make up the bulk of their brand and revenue.

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History of NVIDIA

NVIDIA was founded in 1993. The company was an early developer of GPU/ASIC technology, and was one of the first companies to turn these specialized chips into a consumer-oriented product.

During the first 20 years, the company specialized in graphics and gaming. Its core product, GPUs, also became known as "graphics cards" and are sold as add-ons for consumer computers. Customers can buy these products and add them to the mainboard of their computers, although to do this you need a desktop computer (rather than a laptop or tablet) and the computer must be capable of accepting modifications (rather than a sealed unit). Only particularly demanding gaming and graphics applications need this kind of hardware, so the consumer base has always been largely limited to hobby computer gamers and graphic artists.

This combination of hardware and market limitations make graphics cards a specialty product. During the 90's and 2000's, NVIDIA became the industry standard within this niche. Arguably its only major competitors have historically been AMD and Intel, and even with Intel the company produces built-in graphics processors rather than supplemental hardware.

For most of its history, this remained NVIDIA’s position. It has been the gold standard for a specialty product, and in doing so it significantly contributed to semiconductor technology and production techniques used industry-wide.

NVIDIA IPO’ed in 1999 on the strength of core products such as the RIVA and GeForce processor lines. Starting in the 2000s, NVIDIA became a supplier for video game consoles, including providing the graphics cards for Microsoft's X-Box and Sony's PlayStation. During this era, the company also began branching out into light industry uses, most notably providing graphics chips for automakers' heads-up displays.

In the 2010s, NVIDIA saw its business model begin to shift. During this era, entirely new software industries emerged that focused more on single, high-demand tasks. This included blockchain mines, high-volume data storage and distribution, video streaming, and artificial intelligence. This was a change from previous industry emphasis on efficient software that did more with less hardware, and it was an excellent fit for NVIDIA ‘sspecialty chipsets. This was particularly successful due to the company's CUDA line of products, released in 2006 and built for research-oriented applications.

Since 2010, NVIDIA's business has moved steadily toward these industry-oriented practices. While the company still produces consumer graphics cards, and arguably remains the industry leader in that field, its main revenue now comes from corporate processor demand. Its biggest customers currently include firms such as OpenAI, Amazon, Alphabet, Meta and Tesla.

However that success has brought increasing scrutiny from the federal government. In recent years the FTC has increasingly begun looking at NVIDIA's market dominance from an antitrust perspective, which has in turn caused the company to back off from potential acquisitions. htt

NVidia's Financials and Leadership

At time of writing, NVIDIA is one of the most valuable publicly traded stocks in the United States. It had a stock price (NASDAQ: NVDA) of $887 per share and a market cap of $2.22 trillion. By comparison, Amazon (NASDAQ: AMZN) had a share price of $189 and a market cap of $1.97 trillion and Alphabet (NASDAQ: GOOG) had a share price of $171 and a market cap of $2.11 trillion.

NVIDIA has global operations. Its consumer-level business sells chips worldwide, except for jurisdictions in which the U.S. forbids it to do business (in some cases due to national security concerns). It operates offices across North America, South America, Asia and Europe.

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Nvidia Stock Split History

NVIDIA has undergone five stock splits in its lifetime, most recently with a four-for-one split in July 2021.

Nvidia Executive Team

The company is still run by one of its two founders. Jensen Huang is the President and CEO, while co-founder Chris Malachowsky holds the more vague role of "NVIDIA Fellow."

Beyond that, the company has a relatively lean leadership team. Four main officers round out NVIDIA's primary leadership, making it somewhat more executive light than many companies of comparable size.

• Jensen Huang, Founder, President, and CEO

• Chris A. Malachowsky, Founder and NVIDIA Fellow

• Colette Kress, EVP and Chief Financial Officer

• Jay Puri, EVP, Worldwide Field Operations

• Debora Shoquist, EVP, Operations

• Tim Teter, SVP, General Counsel and Secretary

The Bottom Line

NVIDIA is a specialty processor and chipset company that makes parallel processing units. While they have historically been known for graphics and gaming, currently they are most used for specialty software demands such as AI, database management and blockchain.

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