NVIDIA: From 1993 Startup to GPU and AI Industry Giant
Based on reporting by Britannica
NVIDIA Corporation was established in April 1993 by Jensen Huang, who had previously served as a director at LSI Logic and a microprocessor designer at Advanced Micro Devices (AMD); Chris Malachowsky, an engineer at Sun Microsystems; and Curtis Priem, a senior staff engineer and graphics chip designer at both IBM and Sun Microsystems. The company's name combines two elements: 'invidia,' the Latin term for envy, and the abbreviation NV, standing for 'next vision,' which the company used in its early file labeling.
NVIDIA Corporation was established in April 1993 by three American computer scientists — Jensen Huang, Chris Malachowsky, and Curtis Priem — and has since grown into a dominant force in graphics processing and artificial intelligence.
In its founding year, NVIDIA secured $20 million in venture capital from investors including Sequoia Capital. That early financial backing contributed to the company reaching its initial public offering (IPO) six years later, in 1999. The company's original focus was on graphics-based computing and video games, a specialization that would become a lasting competitive advantage. NVIDIA went on to pioneer GPU technology, leveraging the multicore and parallel processing capabilities that standard CPU architectures lacked.
Early Products and the Xbox Contract
In 1997, NVIDIA entered the computer gaming market with the launch of the RIVA series of graphics processors. The following year, the company released the RIVA TNT, a PC graphics accelerator chip that bolstered its reputation. In 1999, the same year as its IPO, NVIDIA launched the GeForce 256, which brought onboard transformation and lighting (T&L) to consumer hardware for the first time. The success of these products led Microsoft to award NVIDIA the contract to develop hardware for the Xbox gaming console, with an advance payment of $200 million.
The 2000s: Expansion, Recognition, and Legal Trouble
Through the following decade, NVIDIA strengthened its standing as a major gaming console chip supplier. Sony selected NVIDIA to help design the RSX Reality Synthesizer proprietary graphics processor for the PlayStation 3. The company also extended its reach beyond gaming — in 2003, it collaborated with NASA on a photorealistic Mars simulation, and it became a significant graphics chip supplier for a range of Audi vehicles.
In 2007, Forbes named NVIDIA its Company of the Year. However, the company soon encountered significant difficulties. Reports emerged that certain mobile chips and GPUs had abnormal failure rates due to manufacturing defects, and NVIDIA declined to disclose which products were affected. This led to a class-action lawsuit that was settled in September 2010. In January 2011, NVIDIA signed a $1.5 billion cross-licensing agreement with IBM, resolving all outstanding litigation between the two companies.
The 2010s: Parallel Computing and Artificial Intelligence
Development of parallel computing technology helped NVIDIA recover from its difficulties at the end of the previous decade and positioned the company as a leader in artificial intelligence. Parallel computing involves breaking a single problem into multiple sub-tasks and solving them at the same time using several processors, enabling faster execution — the type of computational speed required for sophisticated AI applications. NVIDIA's foundational move in this direction came in 2006, when it released its Compute Unified Device Architecture (CUDA) platform and programming model, a significant advance in GPU-based parallel computing.
As NVIDIA continued developing and eventually commercializing AI technology, it added further revenue streams alongside its core gaming business. However, its dominant position in chipmaking also attracted regulatory attention. As early as 2006, NVIDIA received a subpoena from the U.S. Department of Justice related to possible antitrust violations.
2020s: Failed Arm Acquisition and Regulatory Scrutiny
Regulatory pressure intensified in 2020 following NVIDIA's attempted $40 billion acquisition of Arm Ltd., which was at the time owned by technology investment group SoftBank. Arm's chip technology underpins hundreds of devices, including Apple iPhones and iPads, Amazon Kindles, and numerous automobile models. Regulators around the world raised objections to the proposed combination of Arm's broad reach with NVIDIA's GPU dominance. The deal was ultimately abandoned in 2022.