Introduction How do you pronounce this word? I've heard this numerous times from the man
who founded the company, Jensen Huang, there's no debate, it’s Nvidia. And yet many think this multi-trillion
dollar artificial intelligence pioneer is called Nvidia. But it's fitting in a way, because Nvidia,
now one of the world's most valuable companies, emerged from an industry
also often misunderstood: gaming. The global video game industry
is a $189 billion industry. That's larger than
movies and music combined. Today, Nvidia alone has a market value more than ten times
that, eclipsing those of rivals. And that's because Nvidia now says PC
graphics cards, the pieces of hardware
that render 3D visuals in games were never intended to be the company's final form. The story behind that is a reminder to never underestimate the scale of the video game
industry or its role influencing some of the world's biggest
companies and their technologies. And it's a tale that can be traced
back to the time of the dinosaurs. Nvidia's origin story Nvidia spawned during
April of 1993, in Silicon Valley, two months before the premiere
of Steven Spielberg's Jurassic Park. What the blockbuster glossed over
in terms of paleontological accuracy, critics agree it made up for with
exhilarating, computer generated reptiles. It's a dinosaur. Nvidia is absolutely central
to the graphics industry now essentially dominates it. But when it first got going,
it was just one of dozens of companies
that had the same bright idea. Spielberg used workstations
from one of those businesses, Silicon Graphics,
to bring his dinosaurs to life. But in 1993, Hollywood's need for
CGI was just too small for Nvidia. Initially,
they were just looking for a market that was big enough to generate the kind
of revenue which would then support the R&D effort and the design effort
for their products and the only From dinosaurs to video games market back in the day, that really was capable
of supporting this kind of an effort was computer gaming. This is the Xbox. The public witnessed
the first major triumph when, in 2001, Microsoft's then CEO Bill gates
decloaked his company's inaugural competitor
in the console gaming battlefield. That's fascinating. That game console was based really upon PC
hardware and Nvidia's big break there was that the graphics chip that was part of that
initial console was one of theirs. It was a vital stepping stone
that aligned Nvidia hardware with PCs bought by hardcore gamers
keen on upgrading their computer’s components something they couldn't do with consoles. I have observed that gamers might replace
their graphics cards every 3 to 5 years. The better the graphics card, the better the gaming experience
in a lot of instances. A lot of these newer games are very,
very graphically demanding. Take a look at the difference. This is Halo: Combat Evolved,
one of the flagship games released for the Xbox in 2001. Compare it to this demo of a software
development framework called Unreal Engine,
used by many modern games. This too is being rendered
using an Nvidia chip and side by side That's what two decades of progress looks like. Revenue climbed as the
company continued scoring lucrative deals and shipped graphics cards
to major PC manufacturers of the time. But something else happened
during those 20 or so years. People started to ask
if these things are so good at transforming code
into people and vehicles, could it work the other way around? GPUs excel
at something called parallel computing, Solving complex tasks taking a complex problem, dividing
it up into small sets of calculations, and solving them in parallel very quickly. So anything that is
sort of numerically intensive, anything that requires
a lot of, say, coordinate data, a lot of imaging or mapping,
that kind of thing. GPUs are much, much better
than the standard option, which would be the
central processor from Intel. This made the technology relevant
to all kinds of non-gaming industries, everything from oil
and gas exploration to weather mapping. A lot of the time you see that
there are runs on these graphics cards because they have a lot of applications,
even outside of gaming. The demand used for
chips to mine cryptocurrency GPUs, crypto, GenAI and cats is becoming an important driver. Over the pandemic people were lining up outside
of your local micro center to get the new 30 series Nvidia GPUs
because so many people were using them for crypto mining at that time,
and they weren't available to people who just wanted
to play video games with them. More recently, companies acquire GPUs en masse for use
with artificial intelligence. OpenAI's ChatGPT, for instance,
uses Nvidia hardware. Which brings us to a catalyst behind
Nvidia's recent extraordinary rise. Generative AI and cats. More than a decade ago, engineers at
Google developed a machine learning system that taught itself what a cat was
and how to create an image of one by watching a lot of YouTube videos. The era of deep learning
and neural networks had begun. When a graphics card is doing
what it was designed to do, which is to generate
an image, it's doing that. It's creating a picture of a cat.
This is where the ears are. This is where the eyes are.
This is where the nose is. The cat flicks its head to
one side to look at something. You've got to calculate where that nose
is, where those pixels that represent the nose, the eyes,
the ears, have moved in the image. Think about that the opposite way. If you are showing a computer lots
and lots of pictures of a cat, what it has to be very good
at is recognizing points, creating a pattern, effectively
creating the reverse of an image. A mathematical picture
of what a cat looks like. So that's
what graphics chips are really good at. Is building these mathematical constructs
of real life things, whether it's sound, whether it's image, whether it's other kinds of things
that AI is going to have an influence on. Nvidia became the leader
it is today by advancing technology designed for games,
but valuable to disparate industries. Big Tech and gaming It knew far in advance that
to succeed, it needed gamers. And today that’s something
a lot of technology companies understand and want to take advantage of. There are 3 billion gamers in the world,
and those aren't just the people
who are shelling out for a pricey Nvidia or AMD graphics card
or a really beautiful PC rig. It's not just the domain of, you know, the kind of person you picture
when you picture a gamer anymore. Every company that is a big tech company has some sort of interest
in the video game industry right now. Amazon, Google,
even Netflix are prime examples of this. Netflix executives have made pretty clear
in the past couple of years that they see gaming as a threat
for attention and entertainment time. They've cited the game Fortnite
as a competitive threat. And this is relevant to Nvidia's
story because it's symptomatic of just how greatly the games
industry has evolved over the past decade, and how Nvidia's diversification
into AI, data centers, even streaming services, meant there was
no existential threat to its bottom line. There are simply now more gamers,
more devices and more opportunities. A lot of games that were previously designed for consoles and PCs are getting ported over
to mobile phones, so that they can reach audiences that were previously
not accessible to them. We're talking Triple-A games here, like
Capcom's popular Resident Evil series, which have similar graphics on a phone
as they do on a console. People who had never even considered
owning a console can now play Call of Duty can now play League of Legends and all of
these games that are considered hardcore video games, but in a more casual,
fun way on technology that everybody owns. Nobody look to the first iPhone
in Steve Jobs’ hand and thought to themselves, one day that thing's
going to transform banks Beyond gaming and Gen AI and how we get groceries delivered. But here we are. AI is probably going to be
the same, that all of this rush to create this infrastructure,
that this platform is fantastic, but the end use the
profound effect on the economy, we just don't know what it is yet. Nvidia's benefiting from
the world trying to find out. Gaming has gone
from being its main source of revenue to something of a rounding error. But we are large consumers of it
because we create a lot of AI ourselves, because our chips aren't possible
to design without AI, our software is not possible
to write without AI. We also use it for an AI foundry. We make AI models for companies that would like to have expertise in doing so And so we are a foundry for AI,
like TSMC's a foundry for our chips. The video games industry, the focus
for Nvidia's earliest innovations and partnerships is bigger
and more accessible than ever, and the company
still plays a pivotal role within it. What’s going to be most exciting
is seeing what access to advanced AI makes possible for game developers
working in Nvidia's world. Maybe it'll even be exciting enough to
tempt valve into making Half-Life three. We can dream.