Nvidia Part I: The GPU Company (1993-2006)
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Who got? you. Easy you, easy you with you, sit me down. stand. Welcome to season and ten. Episode five .

required the podcast about great technology companies and the stories and playbooks behind them. I'm been gilbert. I am the co founder and managing director of seattle based pioneer square labs and our venture fund, psl ventures.

and David rose bell, and I am an angle investor based and go.

and we are your hosts. IT is the eighth largest company in the world by market cap. When NVIDIA began in one nine hundred and ninety three, IT made computer graphics chips in a brutally competitive and low margin market.

There were ninety undifferentiated competitors all doing basically the same thing at the same time. And yet today, they have an eighty three percent market share of standalone gp s. That's graphics processing units for those of you starting with us from square one that are supplied for desktop and laptop computers.

Then you tell him like the whole story here.

Sorry, sorry. I'll just i'll see a few things here. So not only that, but of course, the followers of NVIDIA know that they recently pioneer a completely new market, the hardware and software development tools to power machine learning or networks deep learning, all of this in the cloud and the data center, which obviously is proving to define this whole decade of computing. And as David and I begin our research, we realized this really could be a book, and like a thriller of a book, since the co founder in CEO, Johnson huang, really has bet the company, like the whole company, three separate times, nearly going bankrupt each time. But obviously, as we reflect back here today, that certainly did not happen, right?

So here's everything you need to know about genson. The clifts know it's before we talk for like six hours about him. The dude used to drive a toyota bra like a fast and the furious style, like like a death machine. And he almost died. He got IT like a huge accident.

just one more way. He is like elon .

mask then crazy. Well.

because we have way too much here for one episode. We'll save the stories on machine learning for next time. Today, we are going to tell the wild story of invidious founding to its rise in prominence, powering the computer graphics and gaming revolution.

This really is a story of, like, true invention and innovation that reminds you that engineering breakthroughs really do push our world forward. And in saying that, to kind of set some context, this is a story that takes place from about one thousand nine hundred ninety three to kind of the middle eight two thousands. And as hyped as in video has been, you know, over the last five years.

Obviously, with the stock run up and everyone's excitement around the company, I think jensen is still an undated C. E, O, even three hundred percent where the invidia balls have put him. I think Johnson is one of those people were like, if you know about them, you know what we're talking about and you have unbelievable reference. But I think not enough people really know.

Just one more dancing quote before we get into the episode best my will to survive exceeds almost everybody else is will to kill me. amazing. okay.

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Here's a new thing. If you haven't raided or reviewed this podcast yet, I think the last time we mentioned this was like years ago, spotify in their mobile APP just added the ability to rate. So if you listen to spotify, you should totally leave us a little rating there.

If you are on apple podcast, leave a review we really, really, really appreciate IT when you help share your experience as a listener with others are right listeners. This is not financial advice. We may hold positions in things we discuss on the show. This is for entertainment and informational purposes only. And David, take us in.

So we start in february. Ary of one thousand sixty three was going on, and silicone in one thousand and sixty three. Let's fairchild, that arty started, I think, and silicon valley was, like, underway, but I was early days.

But we start not in silicon valley, but in taiwan, yes, the southern part of the island of taiwan, with the birth of jane soon wang, later Megan ized to jennen jenson wang. So his dad was an engineer for the air conditioning company career. Oh yeah, yeah.

You see, there's like big industrial, your conditioning units on buildings and stuff. And when jenson is for, his dad goes on a company training to america, to new york city. He was like, wow, you know, this is amazing. I want my kids to grow up here and to have all the opportunities that are available.

So he comes home jannans for Jenny has a older brother who's a couple years older, either like nobody speak english, so his mom gets an english dictionary and takes ten words everyday, grills the two kids, like, choices them and teaches them english out of the dictionary. If you listen, where's that accident come from? Because is not what you think the family is that moving to thailand a few years later? And then when they are living in thailand, and jenson is nine, they finally decide that that this is the right time to send the kids to america.

Now the parents can't move to america. They don't have enough money, but they found a boarding school in amErica that is cheap enough that they can afford. IT is called oi, a baptist institute, and IT is in eastern kentucky.

The sticks of kentucky games later say that he is brother were the first foregone ers to attend the school, and they're pretty sure they were the first chinese people ever in the town of a, well, well, IT turns out that the reason that this school O B I need a batiste stitt was so cheap was IT actually not a prep school. It's a reform school. So this is a school troubled kids.

It's our fant school. So jenson s. Roommate, when he shows up as a nine year old, is a seventeen year old kid who had just got out of prison and was recovering from seven stab wound that he got in a nigh fate.

Classic american journey right here.

And easily. This is so jane, like they become great friends, even though this kid is eight years old that have like twice his age, basically from a way different background. Jennen helps him with math, and he gets jenson into weight lifting. So you see.

jensen today I do is jack. He is jack.

He's been a way left. Tic city was nine years old about his time. And I need, you know, now I don't get scared very often.

I don't worry about going places I haven't gone before. I can tolerate a lot of discomfort. Boy, does that play out wow in his life, as we will see.

P, so it's pretty automatically now he and his wife, Lorry have given a few million dollars to the school, and it's like a amazing institution. Now you can see jenson give the commencement address in twenty twenty. We're going to link to this in the sources is pretty awesome.

So after a couple years at O, B, I, his parents are finally able to save up enough money to afford to come to the us. themselves. So they move first to to come a washington great day to washington, and then they move a little father self down to the suburbs of portland organ.

Jason, his brother, go home. They live with them. They got a public school there.

You know, jensen continues his american upbringing. He gets really in the table tennis. He places third in the junior nationals in, uh, table tennis.

And he gets his picture in sports illustrated. No, no way, pretty. But his parents continue their start like academic discipline. And jenson super smart, obviously hands up skipping two grades, and then going to college goes to in state college, goes to organ state university, just down the little.

little bit. And he got there when he was sixteen, right?

He got there when he was sixteen because he skipped couple of grit and he loves math. So he decides he's going to a major in electrical engineering at O. S. U. And he totally falls in love in more ways than one. The first way that he falls love is a he do thinks like electrical engineering is the coolest thing in the world, becomes one of the top students in the school. He talks about how like he gets mad at the professors because they don't use like enough precision when talking about like exact numbers.

which he later comes to say that he respects the opposite position. I think some of the invited employees call IT C E O. math. When he sort of rounds all the numbers and his I reflecting back, I do understand what the professors were trying to show is like the details only matter if you understand the big picture first.

That's so jetzt like he understands like, yeah, my eyes please get mad at me when I know round the numbers and you see you math like, I get IT like, I appreciate precision too. But you know, like the big picture is what matters here. At the second way he falls in love is with his lab partner in the electrical engineering fundamentals, his lab partner, Lorry, who goes on to become his wife.

Such a cool story. So he graduates in one thousand and eighty four. He graduates in one thousand eighty five.

They moved down to silicon valley and janson. John, A M, D, as a sort of equivalent of like a chip design. Pm is very like engineering heavy, but he's kind of like A P.

M. We sort of like helping as a junior manager of of a process for developing a chip. He's working on a then blazing fast one mager hurts CPU chip.

Yeah, he talks about this and he says, know, he's talking about how slow one mega hertz and he refers to witness this. You could even see IT come on. It's about our festivals.

You can see IT coming from a long way away and still come in and still come in. amazing. And of course, now he makes literally the fastest chips in the entire world.

So he starts the md. He starts at night working on a masters degree in electrical engineering at stanford. IT ultimately takes him eight years to finish this masters.

He works all the time, that is, at A M D. And then l ological. He go to talk about in a sec.

He ultimately does graduate right before they start in video. This is like a super cool bit of trivia. Did you go back and watch the dog valentine view from the top? No, I didn't like gsp.

H. I watched that like once a year, every year, every time. There is an excuse.

Is that the one really holds up a dress?

Me, let's be up. We healed up after resume. So also easter egg in that talk.

That was the day that the dress and Lorry long engineering center at stanford was dedicated. That has dancers. Jen did a building. Pretty also I did .

watch he gives a talk where he he walks in and gives a talk at, uh, stand for I think is the first time that Johnson has given a talk since the building opened and he says i've donated. We have this nice building now, so I I have .

no more money. I, right, right. So great. Just to set context for people.

If you look at his body issues, he's worth about twenty billion dollars right now.

They think he was, well, like three and a half percent of in videos, something like that. Yeah, he's not any less. okay. So he was in A M D. For a couple years.

And while he's working there, probably from working on this trip that you can so fast you can really see a common, he realizes that designing chips is really freak hard. Intel can do IT, A M D can do IT. But you know, there's not many companies at all fall stack at this time. You know, T S M C doesn't start to one thousand eighty seven.

not only A U manufacturing in house, but for the most part, the like process of designing h ship is a manual one. And so these companies sort of each have their own institutionalize ed internal way of working that you design and layout the elements of a trip and .

denson talks about, like when he was in school, the reason he wanted to go to A M. D. Was he thought this was so cool that I could do IT all once he's actually adding. And he realizes, like, is actually not cool. Like IT would be cool if you could be really good at like a certain part of the stack and have tools and platforms, other companies, to allow you to allow anybody to make chips.

Yeah, they were like design tools to help you make chips.

So after a couple years, his office, me at AMD g leaves and goes to join a start up called L S. I. Logic, which had just gotten public. And we've talked about IT on the show, made down valentine and sqa, the then largest venture return in an IPO in history. Maybe the largest spends a return ever in history when they went public of one hundred and fifty three million dollars on day one.

Boy, has venture changed as an asset class?

But i'm trying to think that fun that probably won't, I don't know, fun two or three maybe. I mean, I bet the fund was like anna, ten fifteen million league. So I probably roughly ten x to fund in, in one day.

Pretty awesome. So what was L S I? IT was one of the first and the sort of the premier sex company, A S I C. Application specific integrated circuit companies. And so what they did and what that meant was they basically made custom design ships for other companies is what jensen kind of thinking about.

And the custom design chips that they would make, these asic would be like for a very, very specific function that would be integrated into other systems. So like defense companies, lucky Martin, and like, but lots of other companies now too are coming to L S. A logic and the other assets companies in saying, hey, we want to create these systems of chips, you help us design the chips to go into these systems and yeah will use processors from no intel two, but like a really health, democratize making and product systems.

right? And the idea with assets is really if you're not saying, hey, there is going to be a general purpose computer that this needs to power that can be super flexible and people might have all kinds of applications that run on IT, but you know, more inefficient in order to get that flexibility. Chip, hey, I know the exact thing that this trip will do, and I will only ever do this.

And so we can actually literally hard code that right on the chip. I mean, that the actual design of the physical chip can be for this one specific things. So it's super efficient at this one low level thing. yep.

And the legacy of basics today still around, still use by day six. But the legacy is F P G S feel programmable, a rate chips that are, some might say, sort of A A bear case for in video these days. But we will get to that far, far, far down the road.

Son microsystems was one of their biggest customers, and I was how son started and made the shift for their workstations. And in fact, jensen, when he shows up at L. S.

I, A sun is like just starting and coming delhi. And so he gets put on the project. He basically embeds with sun.

We give the early days of sun microsystems to help them build out the chips for what would ultimately become the Spark station, one son's first big work station product over the next few years. He pretty much exclusively works with son. While he's at all logic, he works directly with andy bcl.

Time, who, you know the founder of sun, and with the no. Costa, yeah, he becomes super well known and develops quite a reputation. There is somebody who can really like take these visions for chips and these customer requirements from sun, and turn IT into in a reality and production.

So one day, right around thanksgiving, one thousand nine hundred eighty two, jenson has finally, after eight years, finished his master's degree at and stand for this. Quite, quite glad that he finished before this happens. Two of Jason's buddies who has become close with at son Chris mala ski and kurtis prime, who in gensler own words, he describes them as really, really fantastic engineers.

And when Jenny says that, he means that become to jon, and we are not likes super happy at some two of us. We have an idea that we want to talk to about. And janson s like, well, sure, let's go me at my favorite bot, danny.

Really yet.

like the man loves, denies he worked to Dennis in high school. Like he's always go into Denny. He orders the super bird, I think is like, is go to dish nice is so foxie I love you as they go all have dinner.

Dennis and Chris kerdos pitch him on their idea, what their ideas? It's pretty good. It's pretty good.

Tell me, as a meta capitalist, if you would fund this idea back then in the nineteen and ninety two. So they see three graphics are really becoming a thing. And, you know, member, this is the era of sun else, logic.

All this stuff is also the era of silicon graphics, right down the street, right down. So looking, ali S D I, so many great things that come out there. You know, jim Clark nets, careful, like all this great stuff.

Jassim park.

jassim park is about to come out. Comes out one thousand and ninety three. So there is a huge demand for three graphics.

The way three graphics are done, you need S G, I work stations. You need, like super custom, you know, very high and very expensive stuff. Only something with the budget of like I did the military, or like a dassie park can afford to do this. But people love IT like the consumers love three graphics.

Not to mention where are we in the evolution of video game councils at this point?

Well, where install in the superintendent. So we're not a 3d console graphics yet。 That's coming very shortly. But what is happening is the PC wave is like really resting regni c.

We're like a year and a half from windows ninety five coming out.

And I remember doing this. I bet you too, our kids in one thousand nine ninety two, one thousand nine hundred ninety three doing on their pcs, they're playing wolin 33d and dom doom comes out one thousand ninety three。 These are taken the world by storm.

And they are made by IT in software, in taxes and john carmack and jana. But carmack is like doing incredible feeds of engineering to get three graphics to run on consumer IT took somebody of car max calibre to make this happen and the market loved IT. So the idea that Chris here is as feel like we're really great to engineers jennen, you're really great.

You know, chip P, M, essentially, lets make a graphics card. Let's make a chip that can accelerate the graphics of a Normal PC to end three graphics like S, G, I is doing with professional workstations to enable them for consumer hardware pcs. We know that people love games. This will help the entire industry you know take off.

And you're not even say sounds pretty that they're gna try and make IT so you can develop games on a PC. You're saying like just so you can play games on on on A P C, right?

Well, both. I mean, mostly that you can play games on the P C, but then you're also gna have to cruise, you know, all the apps in sd case in developer ecosystem for developers to access this new hardware on pcs, but they'll just develop on pcs. It's really about getting there like the hardware into consumers hands that they can actually play this stuff. So what you think just like a good pitch.

I mean, so what you're basically asking me to believe, nineteen ninety to me is that video games on pcs are gonna be a thing, that there's gonna be a big economic wave around, that lots of consumers are going to want to do this. They're gonna want want to do IT on pcs instead of on superintendent and dedicated systems. maybe. Well.

I have this props of of its software and wolf stein and doom bright there. I like millions .

of people doing this. But still maybe because it's not clear that like video games are gonna be a giant market. IT could be like a kid market, you know.

And I could be the case that like they really need to totally change the development environment or can like there be like five or six different doom out there. There's five or six car max who are all independently genius and can figure out how to do all the graphics on their own. Yeah, maybe, but there's a leap of faith. Yes.

definitely a leap of faith. So yes, okay, not totally this. But still, I think this was pretty funded able, I think, at this moment in time.

And the other thing that was going on was in silicon value, these peripheral companies, like people building chips and cards that plugged into consumers pcs. This was full swing. Their companies making sound cards. There are companies making networking cards. There are companies making serial poor cards like god knows what OK.

So there's already like sort of an accelerated computing wave here where people are saying, like there's some reason to do something specialized off the CPU that needs its own integrated circuit that vendors are making customer and there's a market to make custom stuff as a vender for pcs that takes a workload off the CPU.

yeah. And so the pitches were going to make a custom graphics card, take a graphics workload off the CPU, specifically for gaming. great. okay. So yeah, was pretty much of brain that, yes, but as you eluted to and put up for the show, the problem when something is a brain dead, yes, for intercapital st.

Is that it's a brain dead, yes, for lots of venture capitals and lots and lots and lots of companies get funded to do this. But back to Dennis that night in video is the first they are the first dedicated graphics card company. They all decide the three of them that they are gone to go in on this.

Jenson goes to the CEO of elicit logic, walks into his office and tells him that he's going to resign. He's going to a go start this company with two engineers from sun. And this is what the business plan is going to be. Do you know who the CEO of ali logic was?

No.

he was man named wealth corgan, who was previously the C. E. O of fairchild semi.

No way dim rate. So is that how done? Because done valentine obviously was the biggest investor in or sqa was in alpi logic. And he did he know him from fairchild.

There were colleagues o and then the biggest exit in the coast story to that point time. So wilf says, so let me get this state. He says to jen, you're go build these graphics cards and kind of just like you are saying, they're then who's going to use these and what for is like, well, no, we are going to mean pcs.

They're gaming there there for bunch kids and wealth hones in on the critical question is like, well, who makes PC games? Is their developer ecosystem for us? So that kind of lic ah we think if we build IT like to come the wolf says, remember he was fair.

Child, he's elt like he dos when to make silicon for specific applications? Uh, well says, right, you'll be back. I'm going to hold your desk.

But in the meantime, before you go, I am going to call up down. Do you've done good work for me? I want to call up done.

He calls up down and he's like, done. I got a kid. He's gonna see you stand by which .

this is a lesson for all founders and you know aspiring founders out there. Getting a reference from the C. E, O of a portfolio company is a really good way to come in with. Adventure capital is already leaning toward investing, especially if you are referred by the top performing company of all time in their portfolio. Yes, it's kind of hard for jensen to mess up this pitch with the recommendation .

that is coming in with it's literally impossible because he goes to see down you you done, set down and like so and jensen completely bought is that he gets like really nervous at this point.

I think he had like a partially written business plan that he had like bought a book on, like how to start a business and was like three chapters into the book, but decided not to finish and started writing the planted and finish the plant. So he comes into this meeting is just kind of like, barf fall over done. Yes.

exactly. So tenens walking out the door, he's like a totally dejected downtown. P someone says, well, that wasn't very good. But wealth says to give you money.

So against my best judgment, based on what you just told me, i'm gna give you money, but if you lose my money, i'll kill you. Classic, classic online. So good. So the deal happens. Sutter hill comes in too because, you know, I get like a this is all dramatized in the end of the day, like this is a hot deal.

This is a two episodes in a row for us with the solar hill.

I know O G is they're so good, but I was a hard deal. They wanted in this fits central casting of at this point time.

they invested like a million each. Is that right? For a total of two.

so two million dollar total around, I don't know who invested what I assume a million each, but two million dollar total round at a six million dollar post money valuation. Remember everybody, this is the eight most valuable company in the world right now started at the six million dollar post money valuation. So they are getting things I earned out.

And there's just one problem. They don't have a name for the company yet. Jenson and Chris curtest, they've been be to working on this, working on the business plane. They don't have a name.

They need to incorporate company and they were saving the files they are working on for the chip design, for the first graphics chip as that N V, N V being short for next version. And so like that, we kind of like that, you know, we're always working on the next version. Here they start looking around in the dictionary for words that have N V in them.

It's probably very short, less. And they find the lattin word in video, I N V, I D, I A, which means envy, and they're like great, will be the envy of the industry. In video will drop the eye at the beginning. So we start with envy. This is awesome.

Of course they pick Green. So later on they can have that marketing campaign of Green with careful .

what you wish for here though, because again, as we've been saying, literally eighty nine other companies get funded within a couple months to go due.

The same thing. It's a very clever name. Also the notion of like vid being in there that it's sort of video and that that's another thing that they want to do like it's the classic rich burton empty vessel name.

You know, there's enough things that I could mean and we're gna fill IT with with meaning because they're doing a thing here that like, well, eighty nine other people are also sort of simultaneously doing IT is kind of a new frontier that they need to invent. And then like thought leadership in that area. And they do need to kind of like quickly build a brand not only with consumers but with PC manufacturers.

Johnson, the way he sort of describes IT is that their vision, although he doesn't like the word vision because he thinks it's exclusionary to people. So he said, our perspective is that they want to enable graphics to be a new medium to tell stories. And here is sort of like of the way that he articulates at the time, why video games today are one hundred and eighty billion dollar a year industry bigger than holly's bigger music is the biggest entertainment at the time.

He sort of has the thesis that, like, you really can't, through computer graphics, tell stories today, but if you could, is really interesting because it's not prerecorded. So IT can be sort of new and different every single time you enjoy IT. It's also the only medium of entertainment that can be networked.

And so therefore, it's the only one that can really be like social and interactive. And so our reason for being is to create three graphics as a form of artistic story telling for the future. And everything will be in service of that.

And I think that's not really what they are today necessarily. It's a piece of what they are today. But that kept them going for the first twenty years. Their assistance will and .

baked into that is, again, you know, wealth, kindly kid on and you did to you're creating your very good venture capitalist. You hit on really the key problem with this first situation of in video, which is they have to go of analysts to developers to like, yeah, there's IT in this car mac out there but like, not a whole lot of other PC game developers out there, not a whole lot of other three D, P, C game developers at this time.

There are two D, P, C game developers, but they got to convince a whole lot of people to go. You don't learn how to do through the game development for pcs and that so like a organize story telling all. So to do that they have to go right their own, you know, A P S and S D K. And development framework to develop for this new graphic step that they come out and they have to make a whole bunch of like technical design decisions that they want the industry .

to standardize on, right? This is a case study of what happens when you get more clever than the rest of the industry.

exactly. So at first, things started off really well. Remember the super hot that the first company that are funded by sqa and sutter hill, like they land a big deal with sega to power their ark councils and their next generation home council to be the 3d graphics engine。 And we would ultimately become the sah satan.

And as we know from our SONY episode, not quite the second genesis, not quite the second genesis. Well, so the promise, so invidia cigaret are working together. They make a bunch of these design decision, the biggest of which is they decide that the way they're going to create, you know, people probably know you create 3 graphics， use polygons that's White people talking about polygons in this industry. They have to decide on a sort primitive for the pale gone to like, oh, well, will use quadrature als for vertex. Anybody who think video game development, how is like that's not how it's .

done pressure people talk about triangles .

yeah and i'm pretty sure if you look at in videos amazing headquarters building today, it's you don't made out trankwillitatin to gym developers, not quite a laterals. So this becomes a pretty big problem. You know things go along for a while. It's like fine for about a year and videos leading, they got this big saga deal.

There's not a reason to need standards yet, right? The industry isn't complex enough yet to necessity a whole bunch of collaboration and set of tools that everyone standardized on using. You're like, okay, well, we're just gonna put this chip in our game console, ship the game console.

Where are the only people that you know make an S, K. We being sega. So everyone, i'll have to understand ize on this thing anyway. So great. But obviously, the ecosystem gets much more complex, much more quickly and IT sure would be nice to have some kind of compatibility.

Well, here's what happens. So, you know, curtis and Chris and gentle, they wear the only people. And so like a reality, that's all that kids want to play the games on pcs with dom, microsoft is like, oh, that's we like selling pcs and H, S.

there. All these graphics cards companies out there now that are doing this, you know, what do we do? Is microsoft really want to encourage this in the ecosystem? Well, we create standards.

We would love IT if windows developers could be able to easily developed for all these new machines shipping with all these advances, graphic capabilities. Let's make that as easy as possible for those developers.

Yeah, you know, developers want to do three the graphics directly into windows without any of this. No crafty middle are from some no name company in video out there. Why we just bake these A P, I or in the windows directly for three d graphics will call IT direct 3d and of course， anybody who knows about the history of this, that becomes direct dex.

Direct dex made some pretty different design decisions than the video had made. So, right? yeah.

So they use triangles because triangle makes sense. So now, in videos is really have a great college. All there, eighty nine other competitors out there that started later. Most of them are like, sure, i'm going to jump on board of this microsoft ecosystem. Like, I would be dumb, not too IT standardized on this completely different paradigm in video and then saga, they ve got sega theyve got this one sort of customer. And then in one hundred and ninety six, say, is like, yes, we're not so sure about this quatro literal thing either.

And just so that like this doesn't feel arbitrary, why we're talking about this. And we're going to say at a super high level on three graphics here rather than really going into the weeds. But a triangle is the full st.

Vertus in a shape that you can have while still creating a two dimensional shape. And so IT serves as a basic building block where, assuming you can draw enough triangles and make the triangle small enough, you can form any other shape, any other curve surface. It's sort of the most fundamental building block that you could use to create something that is perceived as three.

yes. So in video, at this point, there are halfway down the road of developing the next chip that they think sag is gonna adopt for. What ultimately would become the dream cast in video was calling the envy too, when saga comes back.

And this, or switch, and horses or not, can a do that solid? There's screw for so many reasons. Everything we've discussed, there's also in the internship, you know year and a half since in video started, the Price of memory dropped because thanky mos law.

So in videos, chips were designed to be like super, super tied on memory. And the memory cost about two hundred dollars in component to do parts to go into their chips. Their competitors have more memory than costing them like fifty dollars.

and that was just in that one iteration. So it's interesting to note that and video, by being first not projecting out the exponential change that from wars law was actually at a disadvantage because a they didn't get a chance to watch and see where the standards were adopted. And so they sort of like picked their own lane when one often their own direction, which ended up not being what everyone else picked, which put the minute advantage.

But second of all, everyone else is cost structure was way lower, or at least everyone else could see that the cost structure was getting way lower. And so video sort of designed for a constraint that was no longer true by the time everyone else came out with their stuff at this point. Jensen and this cofidis kind of have to look at each other and say, okay, do we scrap everything we did? And if so, how do we not make this mistake again? How do we make sure that in future generations we sort of remediate the expansion al curve of morals, law and Prices coming down and design for things that are you two, three, four generations beyond what we actually have available to hardware right now?

So when all this goes down. The company is about nine months of runway left and like like literally anybody else like give up of a plug, like it's over. Like everything in the deck is stack against you, like you're f and I can't imagine sitting there dreaming up away out of this.

But jenson, god, his strategy, he's like, no, we're not going out like this. You know, here jennen talk today about like in videos culture that he says that intellectual honesty is like the cornerstone of in videos culture alike. This is what he's freak talking about about like he sits down with curtis and Chris are remembered there like they are engineers and they have recruit in video one hundred plus engineers into the company at this point and sold them on this technological vision of work going to define the industry.

We set the standards like we're not going to use some, you know, off the shelf stuff and like it's all toasts. And so jensen, like guys like this is a pipe dream. We need to throw out all out if we're gonna survive.

The only thing we can do is standard eyes on on the same microsoft, you know, direct 3d as everyone else， the same architecture. And our only shot is just to like compete on performance and try and become like the best trip out there in this now sea of commodity chips. And a cofounder ers, like, don't want to do this. This is not an exiting vision for a silicon valley engineer.

When your CEO comes to you and says that what they are basically saying is, look, if my job is strategy and your job is execution, the strategy failed. And so we just now need to like literally out engineer all of our competitors. We need to be smarter at engineering decision so we can be more and at a lower Price point using less energy than our competitors.

Because microsoft being microsoft, had all the developer attention and because microsoft a standard and video realized, look, we have no ability to use nearly get our own developers, at least at that point in the company and history. And so we must just on our left, look and see all the developers are coming from microsoft using this API. On our right is all the same consumers, and we have to compete just head to head on raw engineering ability with everyone else.

What you're seeing engineering of ability. But remember, red like this is essentially a commodity at this point. So really, it's not just engineering ability, it's how fast can you chip, how fast can you design the next generation of chip? And can you ship IT before everybody else? Because everybody knows what can be in that ship.

And why is IT? What fundamentally about was IT about graphics cards that made IT a commodity? Well, this point.

like all the other prefers, we're going to get into this in the sec. There was nothing that special about IT. They all did the same thing, which was take polygon level three graphics processing out of the P.

U. And onto this other chip on the other board. Just like sound of cards were doing the same thing for sound, just like networking cards were doing the same thing for networking.

And IT was just like, what's the Price performance ratio of doing that? The interfaces in the programing language at all standardize my microsoft. You're just commodity hardware.

And so what G, P, S actually do, or did, at least in this point in time, is say, okay, the system is gonna feed me in basically point clouds like the texas that make polygons that represent like a 3d world。 And my job as the GPU is too as fast as I can in the highest resolution that I can, or I suppose, a standard predetermined resolution .

fast as I can. Battle.

drive the resolution, output a two d thing that goes on the screen. So I turned three d stuff into two d stuff. And I have to do that Better than other things that i'm competing against, where basically all of us are. When you say commodity, you mean limited by more law and doing right up to the edge of what integrated circuit ing techniques enable us to do.

Yeah so everybody knows what this means is they got a ship faster than their competitors. They also got a ship faster than their competitors. Is there about to go bankrupt? So they draw up this plan that's like they are trying to thread like the tightest needle possible.

Here they have layoff seventy percent of the company, which they do. They go downtown, about thirty five people. And everybody who's staying knows we now have to design from scratch and ship a new ship before our runway runs out, which is nine months. You can do that on a Normal shape.

Design cycle takes like two years, right?

Yeah, the way know in with these families chip companies the way they were design chips is they would work on the design. They would send them over to the files company. The files company would produce some prototypes.

They would send him back. They test them. They go back.

And for a few times, you mean the foundation would produce some like the T, S, M C or the same song or the global founders ies.

or no importantly in videos, is not using T S, M C at this point because they can, they can. T, S, C only works with the best in video is not the best. So they're using like secondary foundation ies. And that process takes a long time. And then at the end of IT, when you're sure you got the the design rate, then you do what's called the tape out of the trip.

I love this term.

by the way, IT hargens back to literally, like when you used to tape no masks, like, do the photo photography on the chip back in the day, so cool. But that just means final alizon the design.

But you actually do run IT on symbol types first like the the boundaries sends back, you know hey, thanks for the signs. Here's the chip. You run your test on IT, make sure everything does what you think that does. And you know that process takes two years to get a full sort of literate on up.

So like we can do this like just like here's what we going to do. I've heard about this is new technology, new machines out there that enable emulation of chips. And in our case, where we used to stimulate the graphics chips that were we're designing all in software and know what works there.

startups, but they exist.

The problem is when you emulated and somehow, you know it's like it's really slow. So when you play a game, when you look at your computer monitor, whatever, it's refreshing thirty to sixty times a second for your professional game, where you proud to have a go on IT like hundred and twenty times a second of frames per second. This emulator runs at one frame every thirty seconds. So they're onna have to debug this thing in software to save this time going at one frame every thirty seconds.

It's just insane.

That's brutal.

They're basically making this trade off of, okay, if we want to ship something in nine months, we don't have time to actually have a execute on the hardware. So we are going to make the trade off of are testing being mind nummi like running whatever our graphics tests are where we're looking for, like this certain specified output. We need to plant someone in front of a screen to watch the new frame, render once every thirty seconds and look against some tests to verify that the output is correct. And if IT is, and this person does that, my name's work and sits there just observing and observing and observing, then we will go right to manufacturing without ever producing a physical prototype and ship that.

And that is exactly what they do. They have spent a million dollars just to get the emulator, you know, hardware and software to do this.

which I think they had generated some revenue. But I was still like a third of the cash that they had in .

the entire bank account months until their cash, the company, they get IT done in a few months and then they call up their foundry. I know they're using united or or one of one of the other founders, ies in taiwan, not T. S.

M. C. Oh yeah, we take this thing out sended to production and the boundaries like, uh, you guys share about that like cup or sure make me know hundred thousand .

units remembering right I think. And video basically was the only customer of that emulation software. Like that was a start up that really wasn't fully proven yet. But in video is like we literally have no options.

Yeah, they were the only customer. And then that that company went out of business after wild. So the chip they designed to know the advantage like this is luna acy what they are doing. Obviously, they have to do IT because their back is against the wall.

The advantage of this, though, is they are now designing this chip with you know the same set of assumptions about what you know technology is available as all their competitors, but their competitors are working on those designs. They don't can you will get them out of her like eighteen, twenty four months. Video is going to get the same, you know, generation of design out in six months.

So this chip is called the river one twenty eight. So what they call IT. IT is a free beast, and IT is like a beast in every sense of the world.

It's big. It's big. It's extremely ly powerful relative to anything else on the market like more powerful .

than any customers are telling them they want.

Yeah, way more powerful. Way, way, way, way, way more powerful. But you know IT comes with some downs and with great power comes you know responsibility because they built this thing in such a manner.

It's like barely works. Like there's a lot of stuff wrong with IT. I forget the exact number of this bit like essentially direct 3d at the time had something like let's call like twenty four， twenty five different ways like different sort of techniques.

He said that like blends modes yeah.

I think that's what I was. Blend modes. And the real only worked with about two thirds, like one third of IT, just like freaking crash IT. It's like IT doesn't work.

I thought even worse than that. But basically, like, I think, and video had to launch a campaign going around till like all the different developers and being like, come on, what do you really need more than these eight four? Come on, what do you you really onna do what you need to use that fancy stuff.

Do us a favor for this generation of the chip. These eight were great. You're GTA love them. They're so good and just .

use those OK. So this is so, so, so great, because people do IT. And so what they learn from this, like they learn about the market, the first situation of video, we're going to build all this technology you're going to drive, didn't know anything about the market.

There are just making all these assumptions about what people want IT. But now they're actually going agencies going to these developers trying to convince them to do this, and they all do IT. Why do they do that? Because the only thing that matters is performance.

Consumers are gonna buy hardware and games based on the quality of the graphics. This is like being discovered for the first time. And so like people are willing to make a lot of compromises in you know, service of performance in videos like the first one that figure this this out because they have to go around and do this. And developers.

i'll get on board. And to be clear, it's because the consumers making the buying decision right on what graphics card they buy.

it's it's a completely interrelated system where the consumer is making all of the decision. That's where the demand is. The consumer is deciding what hardware to buy. That's what in videos business is.

whether they're buying IT as a fully like built computer from the O M or whether they're buying the card put in later themselves, they're making a decision on what graphic car goes in the computer exactly.

And the game developers are making decisions on what graphics cards to support, right, and how to build their games with like assumption of what's my target market of consumers. Like who do I think will this game run on? You need to have at least an x level performance rig in order to run my game or run my game and its fullest form.

So the developers are premeditating what graph cards are going to be out in the market when their games launch. And they're saying, yes, it's gonna be the most performance one at the right Price point. So whatever the mass market is, we can have to target that. And if you're telling us and we're going to test IT and IT, turns out the years is the best performance propose or performance for water, whatever is the most efficient card than people are going to buy that one. And so we must target IT that card.

They're to buy my game. I mean, I remember a leg. This is a few years later.

This is A N A trop that happened. There was a game called crisis. C, R, Y, S. I just remember this.

Oh yeah. What's the relationship? Betwen crisis and far cry?

Um IT was all no. Farr cry was the first game. Yeah the crisis engine and then crisis also IT was super convenient.

Basically my perception of this thing was when this came out when far cry came out. This is like two thousands, the graphics war. Unbelievable, unbelievable.

And if you had a rig powerful enough to run IT, like, just unbelievable. The game itself was total crap. Like I don't think I ever played more than ten minutes of IT.

I'm pretty sure if your computer didn't support IT. There is all these videos that people would record IT of, like building a tower of, like a thousand gasoline barons, and then shooting IT. And because he was too complex for their graphic card to hand, their computer would just freeze. That was the failure mode of far cry with non performer chips.

This is how the hard core gaming industry evolves. Like far cry sold so much software and so much hardware just because people wanted to experience that you to attempt to experience that level of graphics. And so that's what the developers are trying to figure out.

They're all right. Well, you can ship this thing will use only those eight blood modes or whatever, like whatever IT takes, because we want, know, graphical performances, the most important thing. So IT works. They sell one million units of the river, one twenty within four months. Wow, I should the look with the M S R P was of IT, but that is a lot of revenue.

Yeah, no kidding.

What year was this? This was nineteen ninety seven.

okay. So where an interesting era like the internet is a thing, least still have a few more years till the dot com bubble crashes. Play station one is out, but P. S, two is not out yet.

I think, yeah, play station one. And with that, the gaming market kind of evocative into like art of, you know, the console market, which was standardized and you knew was algona work, and then the hard court PC gaming market, which just had so much revenue potential, even though was smaller in terms of numbers because people are willing to spend so much money on this stuff.

So at the end of this, NVIDIA has now figured out these dynamics of the P. C. Gaming market, and they now have a process within the company to design and ship each next generation of their hardware in a six months, while the rest of the industry is on an eighteen to twenty four month.

The time line necessity is the mother of invention.

To say this is huge is like under statement of the century, huge and is huge for this market. But nobody even saw this at the time, like jensen didn't see. There's nobody saw this. They are now shipping relatively, do know, doubling essentially the performance in each generation with the harvard, and they're shipping in every six months.

And you think about mores law, right? Like mores law was that the number of transistors on the chip, equating to the compute power available at a given Price point to the market, would double every eighteen to twenty four months. And video is now on a cycle starting in nineteen ninety seven, ninety ninety eight, where they are doubling the performance that they are delivering at a given Price point to the market every six months.

It's fascinating. And they're also competing on a different vector than the CPU manufacturer because then it's kind of amazing. We've made IT an hour into the episode and haven't talked about this yet. But the magic of GPU is that they are very, very parallel like CPU.

For anyone who's taken a low level computing class, you sort of know that like every time the clock tics, an instruction can sort of run and things move through the sort of long chain of Operations that can happen within the CPU. And its advancing things serially through the processor is a processing I can read from a register, can add two things together. But like it's all happening serially.

It's like the that I love, luc, you do famous one way, like the chocolate coming down the factory pipeline and the C, P, U, S is like wrap each individual chocolate one and then the next one.

Yes, exactly. And with graphics processing, like the magic of IT is that it's super paralyzed, like there's all these things that need to get output IT to the screen that do not depend on each other and so you can do them independently. And so the vector that they're competing on is really like, oh, weekend, and that would be years before they would really get to this.

But add more and more cause or find more ways to execute more instructions simultaneously to paralyze these tasks. And I think at the time, people thought really the only big use case for paralyzing is graphics. Uh, let's put a pin in that for now. But it's worth knowing the thing that they're doing is figuring out how to process more things in parallel faster.

yes. So graphics cards like in videos making at this point time are really good at in parallel letting the pixels on a stream, you know, thirty, sixty hundred and twenty times a second, with the images that are being fed to them from, like the game or the graphics program, which is living all in the C. P.

U. land. So like you're IT game developer, you develop in microsoft, C, D becomes direct or open.

G, L is the open source competitor to this. You know, all that logic is really happening in the C, P, U. on. And what that means is like if you think back to games from this time, you know, think console games play station one, even playstation two and sixty four. You look at the graphics on those games or PC games from the time too.

there are all kind of the same.

They're all the same, right? All the lying, like the lighting, is only predators. Like when you're a game developer, you set the scene, you'd never see like a character running around Carrying a torch and that torch light like impacting the rest of the environment.

It's all set in advance. Like no intelligence is happening in the G, P, U, level with the screen. It's just letting up the pixel basically.

in order to make IT easy for developers, the software development kit is written at such a high level that you don't really get enough control to make your game style alisa ally different. You just get to lay out the items on screen.

It's all the same. It's all flat. Maybe you can program that like hard code.

They are like oh, time of day might change and like that might change the way things look, but you're hard coding like what they look like. New computation is happening, right? You're playing a game today.

Even the most basic you know mobile game, whatever you're seeing, dynamic coding and shading, which will get to in a sec all over the place. So this is still like in the you know GPS are like a really, really important sort of commodity. But there commit there is not a lot of smart happening here.

Yeah, no programming, but in videos s figured this out. They can now ship on a six month time cycle. There started alleg really take huge market share.

Now, a lot of people staring attention to them in a good way. T, S, M, C, that wouldn't even return gensler calls back in the day. There's this amazing, amazing story. Did you watch the T S M C three hours on youtube? So much morus .

change from T S M C. Has he gets the C E S on stage of n video ARM.

ARM.

sl, qualcomm and broadcom? Yep, I don't .

think lisa from AMD was there.

no. Is basically everyone but A M D of this sort of pillars of the T S, M C ecosystem. I mean, Morris is playing interviewer, like it's very entertaining .

to watch a celebration of Morris of tsc. It's amazing. It's is amazing. yes. So in the action with Jason ah they tell the story of how video at this point it's got to be T S M, the biggest customer. I mean theyve been like tied the hip forever of how this all came to be after the rival one twenty eight hits and has become a big success. Jenson writes a letter to more physical letter, addresses IT to moist chang in taiwan because .

he can't get in touch through any of the like sales people.

Exactly, exactly. They've all been ignoring as well. They should, because they were a you left for dead, started up c of startups.

The letter gets to morus. He opens that he reads in taiwan. He does the most modest chain thing possible.

He calls up jensen on the phone right there. And the phone rings as they tell the story in the NVIDIA office. This is in the middle of they're trying like mad scramble as a start up to ship these riva.

One twenty ates that are coming in. They're testing a ball by hand in the office because of this stuff was its fresh off the line. It's not been tested. It's chaos. Jenson, pick up phone is like, yeah, who's this Morris?

Like, hello, this is more is saying at T, S, M, C, I got your letter and marry says that there like a silence on the other end for a couple seconds. And any here is jen yelling, everybody shut up. More change is on the phone. And that's how T.

S, M C became the manufacturer, tia chips.

Yep, the next year, the two companies sign a huge multi year deal for T, S, M, C to become the primary boundary for and video still are today. Jen mora, super close. It's a landmark, landmark to offer both companies.

So with now an actually really good foundation has their partner. And this super unique chip development process in video just keeps accelleration. So in one thousand nine ninety nine, they rebrand their products.

You they use the M V one first. And this arrival on twenty eight, they actually run a little contest of what they should name the products. And the winning name is geometric force forces with you. They certain to g force, which anybody who knows who you know.

Bias graphics card of the invidia g force, still the brand name they use for their gaming cards today and is probably the most one of the most respected, you know, brands in the gaming he got system. And it's because this card that they ship the first g force in one thousand nine hundred and is the g force two fifty six, is so powerful. IT has five x Better graphics performance than like anything else on the market.

And they call this like the first G P U. right? Don't they say, like we're inventing the GPU.

they call IT a GPU. Before this, the term GPU didn't exist. IT was these were graphics cards.

graphics chips. I think SONY had like sort of used IT about the playstation, but no one's marketing this idea.

So they market this as the graphical processing unit. Now on the one hand, that's like sort of like marketing bravo. On the other hand, that is like a very loaded statement to make and why? So what is Jenny and video mean by this? So intel, you think chips, you think intel, right? You think so.

Can you think intel? Intel whole strategy at this point in time was basically they're almost like a biotech companies, like one of the big pharma companies. And uh or or put another way of another version of the microsoft embraced extend tinguished.

They would see there all these preferable downwards network cards, all the three graphics cards, all the stuff we've talked about. They would let all these flowers bloom, but like, oh yeah, ah yeah, just plug into the P, C, I slots on our mother boards. No big deal.

We're open ecosystem. We want everybody to flourish. And then they would see which of these seto preferable got consumer traction. And then they would .

just turn them in and thus began the wave of being able to buy A P C with uh and until motherboard and integrated graphics .

well before that, integrated sound and integrated networking. Like member, um how so fun doing this research. Remember the company creative and .

the later cards? Oh yeah, I remember times .

of that stuff like and then a certain thing, stop flying, sound blind cards.

right? You're like, the mother board does ninety percent of what I needed to do. And why would I spend extra money on a separate thing?

Exactly like what all this happening, the'd integrated game over for the startups. And there was .

like reasons for specialized stuff, like remember buying a special network card because the integrated networking capability of the motherboard on my modern wa was a mac ty five hundred or something wasn't as fast as like if you ought a dedicated P, C, I card, that could be a faster networking card. And graphics cards would sort of become that same thing where the integrated graphics for most people was good enough. Unless you wear a gamer, in which case you'd go buy your own graphics card or you'd buy a directly from the om when they were making the computer and shipping IT to you.

But wait a generation or to even if you have the most demanding performance for home networking in a separate networking, hardly get out here.

These things are like dead and businesses.

and there's no reason why graphics cards wouldn't be the same. So jensen and intel coming out and being like we're a graphical processing unit, we're a GPU. It's a big middle finger to tell. And this whole CPU dominant world and IT .

really wasn't true yet. IT wasn't a processing unit in the same way that CPU as a processing unit where IT was people could write software for IT in a way that created a meaningfully different experience for people using this off.

Yep, but this is where jenson is just such a master strategist and in video is so great, like this whole kind of work strain of a bunch of things, all hit over the next couple years. So first in video goes public. They have now shipped the ribbon won twenty IT was a huge hit, this new g force two fifty six flying off the shelves.

They go public in begin in one thousand nine hundred ninety nine at a six hundred million dollar market cap. So a hundred x return from the six million dollar post money evaluation on the scope center hill round that gets them IT is more capital. And then behind the scenes, they're working. They're in talks with microsoft. Microsoft got a secret project that they're working on at this time.

the x box.

which we talked about a lot, the SONY episode and so many times on the show. And microsoft comes to in video and like, we want you to be a key supplier of the graphics, the G, P, U, for the x box. And they do a huge, huge deal, five hundred million dollar year deal for in video, to supply the graphics for the x box with a two hundred million dollar advance.

And the chip that they use is a modified version of this incredible new chip that in videos are working on to sell, like Steve jobs jets. And sounds like Steve jobs talking about this. The g four three, which introduced is, for the first time, programmer shatters and lighting on the GPU.

Everything we just talked about that like the GPU massively parallel, can light all these pixels, but it's essentially just taken instructions that are three, you know, hard coded, baked in on what the lightings can look like. Now you can program for these GPU and you can make dynamic lighting in games and three graphics that is calculated. This is game changing.

the way to think about IT as those GPU in courts were fixed function graphics accelerators, so they would be able to map textures onto a set of polygons. But you couldn't do the thing that you're talking about, David, customer lighting a lot of that sort of up to actually program at the GPU level what is happening.

And so this is like, of course, it's cool because it's a wave of new consumer experiences that can happen because every game developer can kind of style isn't ally, put their own stamp on games. But it's a totally different metaphor for the computer architecture where suddenly you can program a GPU. And I guess that's why they are calling IT a GPU. And this is different genographic card.

And in video develops in conjunction with this, they call IT C. G, literally like the extent of the sea gaming language, with graphics, library and capabilities to directly program graphics and lighting in shatters for the GPU. So this makes, you know, that sort like marketing.

You know this g four two fifty six, it's a GPU. Now it's real. Like this is a graphical processing unit that is intelligent, that is every bit as you know, maybe not every bit as important as the CPU yet, but like this is like the stake in the ground of like this is no sound card. This is not going to get commoditized.

Do you know if this was the g force effects or if the g force F X was a similar version of this that was available to PC?

That's a good question. IT was the g force three. Was the the P.

C version of this. Okay, this move to programmable shadder was a bet company move and IT was jenson's answer to how do we get out of this commodity business and do something unique and different. And i'm pretty sure they were like months away from cash out again by pulling this move because of how aggressively they had to staff this like very new type of product they were inventing.

Yeah I mean, this is the fact that original sort of quick atic vision for the company of we're gonna create an industry. We're going to create the A P, S S D K to interface with IT. We're going to do all this like now they're doing IT.

They're doing IT with microsoft this time instead of like against microsoft. Selig apples moved there. Yeah but yeah like the amount of capital investment that were went into this is enormous. So at this point in lls, like we might have a problem here.

right? It's going to be more difficult than we thought to just take whatever these people are doing and integrate IT directly into .

our our motherboards. yeah. And irony of ironies, jen impresses this even further. He doesn't a big partnership with AMD.

It's worth knowing here when you're saying AMD because people probably know AMD and and video big competitors today in the GPU world. Not yet, right? A M, D, primarily made C, P, U.

At this point. They made processors and competed with intel. They hadn't yet bought A T. I, which is where the radio business comes from. That's all the graphics stuff that they do today.

yeah. A T. I, at this point was the number two competitor. Two in video, actually an amazing story. Two was a canadian company started in the eighties and pivoted in the graphics cards, like very different you. I feel this is a lesson in here.

We dug mothers and play book family when all the VC funded these ninety, you know, silicon body starts ups to go make graphics cards. Three graph ics cards, the only two surviving ones were in video, which went to this health journey. And then these canadian guys that were like totally out of the ecosystem, like the bed draft away, evolved into the space.

Johnson has a great quote about this ah and he's giving this lecture at at stanford years later and he says when technology moves this fast, if you're not reinventing yourself, you're just slowly dying. You're slowly dying, unfortunately, at the rate of morals law, which is the fastest of any rate that we know yes, it's so clarifying of how he thinks about why NVIDIA needed to do this. Like three complete transformations of the company, Better at all, risk at all. Because if you're not.

you are one of those eighty nine companies. exactly. So intel's, like, holy crap, we might have a problem. Not like this is not a problem for intel.

IT just is a thing you're going to have to deal with instead of IT being part of their extinguish strategy.

right? Intel is used to at this point just, you know, like microsoft at this point. Oh, sure.

You know, you want to go make word perfect. Will you do that? We will see these great applications and then will go make our own.

That's a one intel's doing. And now this is the first example of like intel's gonna some trouble doing this on their site. They actually, at first come out with their own dedicated intel graphics.

No GPU graphics cards competing as separate cards other than intel I ever done. Maybe speaking out of turn here, but like as far as I know, I don't this is not a common strategy for intel is using integrated into the muddy board in the CPU. They come out with their own external cards right around this time, like one thousand, eight, ninety nine, to directly compete. And like this, suck like these. Are you like some of the worst reviewed graphics cards in history?

Talk about not your core confidences y.

not your confidences y and .

that really illustrates how different invidious approach was to what graphics cards had been before. And building program val shares, creating cg, which was a little bit of an early strategy and something they would later do with quota, but really understanding that like, oh, we can differentiate our hardware not only with interesting hardware features, but by building software on top, that IT only works with our hardware, but makes IT really great for developers to develop for our thing.

So intel does make a big push. This actually, you know ends up becoming a great strategy for them into integrated graphics. They do trying to integrate this, but it's never good enough for the high and it's only good enough for if you don't care about graphical equations for laptops in the I can. And that's great. You know that ends of you.

That's a big market for them for a long time ah and especially leading into you know mobile 好 intel mobile a story for another day but for the hard core market and that that making IT sound too small for the market of anybody who cares about graphical performance and quality， which is not just gaming at this point of its really modeling its architecture. It's lots and lots of graphical high performance graphical computing applications you're always going to want is this dynamic and IT sets up just like more is law. Whatever the current maximum is, it's not enough.

It's never enough. You always want more as good as graphics are today, it'll never be good enough. Ten years from now, game graphics will make today's graphics look silly, and we will all be in the metaverse or the aromas of in video has their way.

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Basically the company goes like supernova in a good way, in a good way at this point in time. So the fiscal year that is genuine, thirty first one thousand eight ninety nine, this is like right before they go public, or right as they go public, they did one hundred and fifty eight million dollars in revenue. The next year, the fiscal year year ended generally thirty first two thousand.

And so but like the calendar year in one thousand nine hundred ninety nine, they do three hundred and seventy five million dollars in revenue, so more than double that year. wow. The next year they do seven hundred and thirty five million dollars in revenue. The year after that, which is basically the calendar year two thousand, one in the year the x box comes out, they do just about one point four billion dollars in revenue.

which makes them the fastest semiconductor ever to reach a billion in revenue, and gets them added to the S. M. P. 5 died。

This is the companies is essentially ninety year of existence. They are ready, doing over a billion dollars year in revenue throughout .

the company's history. They basically have these like six to ten year epoch. And during those, they have like a media rise when they do something contrarian that's off the rest of the industry. And then IT starts to taper and they need to figure out how to reinvent themselves again.

And so we sort of thought the first time before the competitors come in and then the competitors come in and that we see IT again with them figuring out we got to do um the emulated version of letting our engineers design the chips and layout the chips so we can be faster than everyone. And then everyone sort of catches up and they have to do IT again with programmable shad's launching those to the industry. And then they have these few amazing years after that, there is kind of a plata again.

And you can see IT in their revenue. They did obviously close to two billion dollars as we move through two thousand. One, they stayed reasonably flat for a few years after that.

I think they eventually did two point eight billion in two thousand and five. But IT was kind of barely profitable like they never lost money. But that income for each of those years was only a couple hundred million or a less.

So it's not like there are this like super free cash flow positive company. They are not adding to their cash pile in a meaningful way. You can start to see competitors figure out program .

all shapers too. Yp, A T I of course. And then in two thousand and five, I think IT is A M D.

I start shopping around o six is when the transaction actually happens.

they buy A I and of course now and this is main competitor to and video. So wanna tell those stories on the next episode, but basically like a little so the tea, what's going on, on here? They kind of take their eye off the ball in the gaming market.

Now maybe that's too harsh. I don't know what jensen would say about that. But right around this time, there's something that ultimately becomes pretty amazing that happens, which is they've achieved the dream and invite.

Yeah, they created a programmable G P. U. IT is truly a GPU. Rivals the CPU. This is the model they have driven forth.

This new industry of computer graphics enabled the whole generation of storytellers to program their G, P, S and tell stories. A whole new class of users and developers starts to tiner around with these gp use. And a jenson likes to tell the whole story.

That's probably a packed erle. But, you know, hi, we will repeat IT here as a little teaser for next time right around. So of the early two thousands, a quantum chemistry researcher at stanford calls up jenson, and he's like, I need to thank you because, you know, I do this, this work in my lab, on these supercomputers that we have a stanford in.

I write these models for the model cues on researching. And IT takes a couple of weeks to, you know, finish the computer, these models. When my son, who's a gamer, he told me that I might want to try going over to fries, the local electronic store and a buying a bunch of your g force cards.

So I did. And that I should try porting my models into C G, into your, you know, graphics, computer language and and just see what happens. What I did IT, and my computation finished a couple hours.

So I I waited a couple of weeks for the supercomputer here. It's for to finish, I checked the results. They were identical.

boom.

It's like I just want to thank you, Jenny, for making my life's work achievable in my lifetime for sure. Something that made up maybe maybe this is probably .

coupled together from a few of her people's experiences you compose.

but every word of IT is true in spirit.

Yes, there is A A whole industry called scientific computing or whole segment that in video would be able to address in the future. But they need a whole lot of tools to be built for them, to be able to really use GPU for all those purposes and more with machine learning and everything else.

But right now, yes, you are buying off the shelf g forces here in this mid two thousands a and trying your best to sort of hack them together to do your super parallel processing task that is not specifically building a core video game. What's interesting is the industry perception around this time was that NVIDIA had started to sort of focus on this high performance computing segment and that they were starting to take their eye off the ball in gaming. So people were starting to think, like, maybe I T I is actually more interesting as a gaming specific graphics card maker at this point.

And there is a little known fact that is, so you mention this A M D A D ideal. And like we all think the A M D radio at this point, you don't think about the A T I radio, which was that was, I think they retired the A T I brand in two thousand and nine. But A M D S.

First choice was actually in video. So emd tried to buy NVIDIA to make that their graphics line and IT was possible because it's not like the stock was blowing up at this point in time and had had this sort of few years of. Reasonable stagnation before we get into late two thousand six, two thousand and seven.

And certainly, people didn't see the machine learning market, people that really see the scientific computing market. And I was like, hey, maybe this company needs some guidance from a smart company like us AMD. And so they make the offer and there's the cover story on forbes will put in the shower notes, but there is article that comes out called shoot to kill and janson. In this merger acquisition talk with A M, D, insisted that he be the C E O of the combined company, and that is the thing that blew up the deal. And instead of A M D, win 8， A, T, I and the rest history.

that is such a good, what have happened otherwise? Well, we use that transition and do analysis for this one. Yeah so I thought .

to be fun to do narratives like let's take IT from this point in time. The AMD eighty ideal has just happened or sort of looking forward, it's two thousand and six. You know what's the barren bull case for the company? And I thought an interesting data point to sort of ground this discussion would be that if we look at the gross margins today for NVIDIA, which we will talk in our whole next episode about everything, the video that so insanely differentiated, they sell their G, P, U, S.

At a sixty six percent gross margin hardware business with the sixty six percent gross margin back in two thousand and four, that gross margin was only twenty nine percent that they were able to command as a premium on their cards. And so you can kind of see, like all of their economic potential was being competed away and they weren't doing anything to differentiate in a way to get any sort of pricing power. And so you think you make that twenty nine percent, then you need to use that to pay all your robot head and fixed costs in your engineers and developed the next product. And poor and R N D. Sure, they had a few great years of doubling in revenue after going public, but it's not looking great right now in two thousand and six.

yes. And there's also another reason why the gross margins are so low in those years following two thousand. One with this deal with microsoft to um power the x box and he was absolutely the right strategic decision to power the x box to get microsoft's ort in creating C G for programme shares.

You protect themselves from intel, but if you're gonna deal with microsoft, they're onna extract their pound of flesh. So you'll note there are three game councils in the history of game councils that NVIDIA has powered. The original experts, the police station, three we will talk about next time truth and then intendo switch.

They have not done any others really and people always like like asking jenson about this one and he he his diplomatic about this. But because it's a crappy girls margin business, a five hundred million dollar year revenue deal with microsoft, five hundred million dollars a year when their whole company revenue is a billion. Well, it's five hundred million dollars a year of very low gross margin revenue.

Yeah, I think the way that he talks about this sort of opportunity in the talk that I wash him, give IT in name named, but says, people always ask me, they hen, why aren't you making this great game? Council GPU like a ways, why wouldn't you do that? And he always talks about IT like, there's a lot of things we can spend our resources doing.

And if I don't think that we can do anything really unique and special and really change the world than we have Better things to spend our resources on, and that is kind of jennen speak for like, no, there's crap margins in that. I'm not doing that. But he is right that like giving a fine amount of resources, you have to allocate your capital in your resources in the most optional, both short term cash flowing away but also long term strategic way. You know IT seems like from their sort of analysis, especially recently with game councils, sure, we might be able to make some low margin revenue on IT, but it's not strategic .

for our long term to do that. It's probably, at this point time, a little too much of an exaggeration to there out of the fire and into the frying pan, having solved their intel existential, strategic, chAllenging ending up. Now sort of adults with microsoft, that's too much, but there's a lot of truth to that.

So you know if your looking at the stock in those years, especially as revenue starts to flat, a big part of that is coming out, you know towards the end of the x box generation of councils leading into the x box three sixty, which of course, in video does not power. That's a lot of gaming revenue, topline revenue going away. Meanwhile, they're spending tons of resources investing in this new hypotheses puting segment for these researchers. Here's a little bit like, okay, Johnson, do you really know what you do on here and .

in two thousand and six l watches or announced this project araby, where they are gonna be like a full fledge GPU maker? I mean, this is like a totally a second foray of of until really into this you're like, okay, you've had to like be this commodity where you're living on intellects. Motherboard customers are only choosing to buy your product when the integrated card is in good enough for them.

The person that makes the integrated card is now announced. They are gonna be like a real honest to goodness GPU maker. So like you're you, Betty, the farm on scientific computing.

how big is that market?

So the answer is yes. And that is also the bullet case. And IT turns out scientific computing would be so much more than scientific computing, and IT would be a, you know, the acceleration of all the other things in our computing world that has been very advantages to become parallel zable. But I will allow leave IT there. So I don't have too many spoilers, but that is one hundred percent of all case and one hundred percent what happened?

Yeah, it's interesting. We're working on an episode, episode two with hamilton helmet and his colleague chinee strategy capital about power.

specifically with platforms, how to apply power to platform businesses and .

really will be out yeah when this episode comes up to be coming out shortly there after they make the point. And it's a very, very valid one that like when you climb the mountain as a founder and a company of finding product market fit, it's very different than climbing the mountain of then having to go develop power. It's a whole, a second journey that you have to go on.

It's a whole second invention. And at at this point, a invidia had definitely found product market fit but had not yet found their source of power.

So you know, if you're looking at this company at this moment in time, especially as revenues flattening coming off the xbox contract cost, apex is going way up investing in this sort of speculative new area. I can totally see looking at this in being like, wow, this is yet another silicon valley startup that had immense product market fit top line revenue, sod. But now we're kind of coming to the end of that. And there is not a lot of power, you know, as defined by sustainable economic profit, no Operating cash flow coming out of this thing.

So then as we talk about power here, what power do they have? And for listeners who are new or this is really the what is that, that enables the business to have persistent deficiencies, returns or sort of in a sustainable way, be more profitable than their closest competitor. They really didn't have power.

I mean, i'm trying to think which of the seven powers can we make the best case that they did have. It's not switching costs. Switching costs are crazy easy. So switching .

costs is interesting, right? Like I think they were trying really hard to develop IT. They didn't really get up. I mean, they made cg in collaboration with microsoft. N, C, G works on in video products, but is not like data to flash forward the next time.

Yes, so I was like they had the input of how they could get power, but that was not in implemented.

And microsoft didn't have a lot interest in helping in video create huge sweet ching costs there, right?

Because microsoft wants to place witchland k. Anyone that is an application developer for windows should be able to use whatever hardware is on any PC in a really great way. And so if you want to commoditize all of our suppliers.

so may be some unattempted switching cost that was not fully realized. I think they probably thought that and did for a while have process power in this six month shipping cycle that one of their competitors can match for a while. Yeah, but certainly the delta of in videos shipping cycles versus competitors compressed over time.

Okay, playbook. I have one big one that we have not discussed. We sprinkle in lots of like playback themes, but there's one to me that I want to call out and draw a throw line to something that's happening with NVIDIA today, and that is simulation.

So there is a thing that we're going to talk about a lot on the next episode, which is totally changing the world as we know, IT, which is things that we used to have to do physically. We now do in simulation. An obvious example of this is boeing doesn't take every part and throw IT into a wind tunnel.

Maybe boeing does, but the zillion new space startups certainly don't do that. They simulate the atmosphere, ic effects on stuff, and IT happens way faster and lowers your reera time. And another one is drug discovery, like you look at how fast we came up with throne of virus vaccines.

Simulation is an absolute miracle. And everything in our world is being compressed ten times, a hundred times faster because we're able to simulate IT rather than needing to do IT in the real world. The interesting thing is a lot of that is actually powered by a lot of the machine learning advances that in video is doing in today's world with cool things you can do on GPU. But the reason i'm talking about in this episode is that DNA comes from the fact that in order to survive, when they had nine months left, the way that they saved themselves was with simulation. So IT became very clear to the company very early on the benefits of being able to simulate something rather than having to do in the real world.

Similarly, a playbook theme I wanted to highly that we have not talked about explicit yet is just the power of like democratizing tools for developers. You and jean really saw this back in his AMD days before going to alycia logic, but the ability for NVIDIA to use emulator software, emulator to design their chips. And then of course, the massive, massive strides that the E.

D. A. Industry has made. Since then. And then in video itself, you know enabling you know we have really talked about IT as much bitty jenson and Chris and curtis's original vision did come true like they created a new artistic platform for artists to tell their stories.

And without this industry and all the hardware software tools that when creating IT like there's no way that you know anything, you would have to be a dn car mac to tell a story in this medium. And there are very, very few john car max out there in terms of being gifted enough developers and surrounded by story tellers two, and being a great storyteller himself till, like, be an artist. Da to be video talks about this now in their marketing materials, to be the vinci and einstein know together in one person.

Yeah, reminds me of the people that do like the crazy cool art in microsoft s cell by like painting each of the cells a different color. You had to be that type of person to be a game developer, carmax era, because I was esoteric as hell to be able to actually figure out how to make this hardware do what you want.

Another big one I want to highlight. I just keep thinking back to the thinking back to the original time when in video was funded. I wonder what like if they're really honest with themselves, like what's aqua and done valentine .

with that about that and .

they made the wrong venture beat. Like in in a market like that, we see IT all the time. Like look at web three right now. If there is a team making some new vision for a classic applications in a web three, like they are going a term seats from everybody, and then there's going be a million copycats the next day.

IT is the beauty of proliferation and then consolidation. I mean, buffer has I think it's in a two thousand fortune article that he wrote where that I know that, but I think that's right in an upbeat about how there were ever IT was seventy car companies before we narrowed all the way down to four G M. ler.

And the airlines were the sort of the same way. There's this proliferation. There's master.

There's no one can really differentiate. No one can build any power. And so you only have a few survivors left. And in general, they compete on preval margins when there's only a few left in their defensive about comes from their scale. You know I think open question if that's sort of how the graphics market necessarily matured.

But you're absolutely right to like sort of a self reflect on the time when the quaint saudi invested to say, would you make that type of that again? You backed one of the two winning horses out of ninety. Should you do that and just say what we're betting on, amazing founders? Or should well.

I think that so this is the new X I think is so cool, you know, to fend the art in the science of sort of what we do, the company they backed was wrong. And yet IT became, I don't know how long, I mean, I think of GPS s. Coy and certainly marked events.

Who was one of my professor is at G. S. B. Who was on the board for scores still on the board have held their shares personally. Like to this day, I got one of the best venture investment returns of all time, full stop period.

Anything going from a six million doll valuation to the eighth largest company in the world, definitively to be one of the best of all time.

right? And so like, they were wrong, actually, and yet they were right, right. And like why are they are right? Like they were right because, Frankly.

of jenson IT is a reasonable enough market. The question is, what are you Better off doing what they did and investing at the proliferation phase on someone you believe is going to figure that out and have a good shot of being one of the winners? Or should you wait until consolidation and just pay that much higher Price in order to back one of the ones that are already running .

away with the market back then in the there no option there no no stages of .

venture capital there was you raise your venture capital and then hopefully you're profitable .

enough to go public. They did some more money in between that initial two million and going public. I think they raise twenty million in total. But like there wasn't a lot of window and I think that was cold that put that capital in for the rest of the twenty million. But it's really interesting to think about these cases. Takes a way and other hill too know specifically like theyve gone there or eight so many times, but it's not a straw line till he what's the lesson from that?

Yeah and the magic was that Johnson really figured that out early, that they were in a business that was totally at the mercy of mars law. And so like in having that initial realization as early as they did with the proliferation of competitors and everyone doing, you know, the triangles and direct, and that taught them a lesson early enough that, oh, we are in a business where we must be reinventing. There is no way to stay ahead other than ruthless self examination and completely bending and repeating .

the business. You ship faster and event.

Yeah yeah. So that I mean that that to me is why they why they survived.

If you think about the class of companies that are like the greatest venture returns of all time, some of them are like in video where like you look at the team, you look at the business plan, the thesis originally, and like, that wasn't in the street line, but IT worked out. But then some of them are, I even used to talk about this on their website, the misfits, the ones that look like unfunded Steve jobs.

smelling bad. You know.

that sort of the rate. yeah. So it's like, and I think you know any of venture firms, but I have to hand to c oia over history too, like they're done really good job of doing both of these. They do the Steve jobs and they do the the .

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Yeah, fanta is the perfect example of the quote that we talk about all the time here and acquired jeff basis, this idea that the company should only focus on what actually makes your beer taste Better. I E spend your time and resources only on what's actually gonna, move the needle for your product and your customers and outsource everything else that does not. Every company needs compliance and trust with their vendors and customers. IT plays a major role in enabling revenue because customers and partners demand IT, but yet IT add zero flavor to your actual product that IT .

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Then you are talking about keyhole. Yes.

I thought you would know. So I love this little for shadow before we get degrading because I think it's so interesting that johnnson basically saw the potential of keyhole. And without sharing what keyhole became, I think a student, lelius ener, will know.

We've talked about IT on the guard, and we have we ve done an episode.

episode on IT, basically this company that can't raise any money for anyone else comes in itches, jenson. And he's like, oh god, I see this. This is the future.

This is simulation. Like you are creating a model of the earth in software, and people can just navigate around the earth. And so now that i've given .

IT away a graphical model of the earth.

yes, google acquired IT. IT became google earth and and video was one of the the early investors. And that really goes to speak to like where jenson and the leadership team, mat and video sort of saw their business going from this point forward, where IT was all about simulation, IT was all about using massively parallel to build brand new experiences to enable research to an I don't think there was any machine learning going on.

I think IT was all sort of like the graphical use of the chip, but this sort of like gets into the omeo stuff that they are doing now. And one of the main reasons that I think they invested was because he wanted to stay alive so they could keep demming IT to customers because that showed off ending a technology so well. But I just love that little, little bit.

Yeah, we did our episode years ago. Now the google maps episode, there was such a good one.

Yeah, where two key hall, and there are .

three companies that google all buy and mashed up in the pilots of the day to a ultimately become the google maps.

Zip, dash.

sip, dash. yes. And they were all like twenty thirty million dollar acquisitions. amazing. That's what's so cool about this.

And maybe this is the leg where jenson and the invidia story bridge from like the oh, IT was the, you know, obvious investment market to bed on, team to bed on to go, all star engineers to go build this graphics card. Nobody really could have seen that graphics. We're gonna come a lot more than games like you maybe could have seen IT.

Like, you know, there was S G. I. And hollywood and jassim park, and there were some military applications for computer graphics. But very, if you even that in an in video, there were like video games. So the thing, fortunately.

that became the biggest intertainment medium. And so even if that .

was your only market key hole in google, google maps, such a great example of computer graphics became so much more important than the relevant beyond this video games. And that's all the computer, you know, dynamically generated programmable computer graphics that are making all of that. All that happened, right? So how we going to grade this?

Yes, i'm thinking given the op, the market opportunity that existed between nineteen ninety three and two thousand and six four computer graphics, how did NVIDIA do at exploiting the market opportunity and like share Prices, a reasonable way to think about IT? I think it's a second order metric on like how were they at creating value and capturing value. And i'd say like the value creation was amazing. They are value capture.

Yes.

they did Better than anyone else. As far as I could figure out, the question I was sort of trying to figure out is that there were ninety other competitors doing the same ish thing to ish survived. Was there anyone else in the value chain that was able to do a much Better job capturing like would you rather have been microsoft then in video?

This leads into the really interesting question to think about for in video in this period, microsoft did basically nothing. Now okay, that's like like that's not fair to microsoft said .

there was a large team .

that the direct huge team know when the x box project was amazing. And like I don't know anybody ico soft, but like they were in this position where they could just sit there, they could watch the market develop for computer graphics and they could be pretty, you know, by making good, very good strategic decisions, they could capture a hn of the value with other companies taking the rise of developing the market, figuring out all this stuff.

And then, you know, microsoft can come along. And Blake, great in video, we're gona help save you from intel. And in return, you're gonna. You don't give us a really sweet hard deal on these chips and you're going to put us in business with x box. And by the way, the other side of your gaming and computer graph ics business on pcs, we're gonna become your primary partner for that too. And all of the development languages that you're going to create and C, G and all that, yeah, we're tightly coupled with that and it's all gonna on the online .

is I think you're assessment of microsoft basically nothing except make really good strategic decisions is like reasonable enough for direct x, but totally is not fair for x box is not fair.

It's not. But IT is an .

interesting way of right. Like to put in another way, and let's exclude x box for a moment, you're basically just recognizing that microsoft had an unbelievable position in the market and did an amazing capital allocation job exploited in t and basically saying, hey, you know what you know we don't need to do all that crap that like NVIDIA, A T I and all those guys are doing. You know how we can still retain our market position, uh and continue printing money the way that we do this thing. And they did that and they didn't get into the commodity business and they were brilliant.

We don't need to be in this brutal competitive industry where like if we don't ship six months ahead of our competitors, every psycho were toast. Yeah, so I think, you know, in this kind of a grading question, how, man, the longer we do this show, the more I realize this is like a maka theme of acquired that like microsoft in the nineties, early two thousands, was such a power. And the N I trust, you know, the D O J case, really, really critically, probably for good for the ecosystem.

Then the three d transversion is, and this kind of four shadows, the next episode, because NVIDIA had to learn these hard lessons and had to develop that, was forced to develop these really crazy competencies, like eventually developing CUDA, that would power this whole machine learning in scientific computing revolution. IT was IT bad for microsoft to not have to grow that DNA in the same way that I was bad for microsoft to not have to grow the mobile DNA. And apple beat .

them at that game is the great point.

I don't know enough yet about how the machine learning market is going to to develop or has developed in order to sort of make a call yet on that point. But if years just standing there in two thousand and six, reflecting back, and video fought for their life and one multiple times, and microsoft just leverage the crap out of their amazing position.

yes.

and probably achieved about the same outcome.

yeah, both of these two fighting for their life company defining moments from in videos is, first, ten to fifteen years, the overcoming the ninety competitors and then the building and making the case that they're gonna get commodified by, until that the GPU is gonna a stand alone important thing. Microsoft profited hugely from both of those.

Yeah, it's so true. I will say NVIDIA doing what they did has been net unbelievably positive for the world. Like I watched the n video G, T, C conference.

The twenty one, the twenty is about to happen. And just like the review of all the stuff they're involved in is so inarguably good for humanity. We need way less energy to do way more interesting stuff that's good for humans because and video exists. And without doing this first thirteen years, they would not have laid the ground work to be able to do all of that in the future. So that's like one sort of contorted lens to look at IT through.

I think I give in video for this period of time and a because they're basically the only company that survived A T I did of for ser, of course, but in a very different fashion. And they created this whole industry almost inarguably treated and shepherded this whole industry, but is not a plus because microsoft, well, there is the D. R G A case until the D.

R G A case. Yes, it's true. Alright, I like that. Heard argue with IT car of outs.

car of outs. I'm a fun and very appropriate one for this episode elden ring. We heard about this span.

Now you're not a game or so you you need get you in the gaming after do all these episodes. Now it's so fun. It's just like it's great.

So elderly for people who don't know is the latest from software game. And it's on all the platforms. Council P. C.

Is at lots of people are saying this is probably gonna be is up there with the conversation for greatest game of all time ever made. These are the guys, japanese developer. They made the dark souls games, if you heard of them, they're like, just this legendarily.

Like incredibly hard games, but like this, the world building is unbelievable. And elderly is the first one to come out on modern platforms. And like everything about IT, the graphics, the scale, the breath of the world, the story, George ARM Martin helped develop the back story to the slake.

Oh wow, if you needed. Another example of how video games have become like the biggest, most ambitious storytelling video out there like this is i've only just started playing the games i've been researching in video at the whole time. Yeah but even just in a few hours playing IT like it's it's increase. You're not going to get an experience like this .

in anything else. cool. I haven't appropriate one that I didn't realize was going to be appropriate until you shared IT earlier, which is I have been getting back into a lifting like a weight lifting program that I haven't done for like ten years inspired by jenson, a called starting strength by a mark repeal yeah apparently inspired by Johnson. And I didn't even realize IT, but it's like I reactivated a gym membership and I went back to the gym, you know started kind of from square one in terms of like doing all the basic barbell lifts. It's just been really like it's a new hobby.

It's something I did like ten years ago and then totally let atrophy in the way that I love to work out and at least historically have the last five to eight years has been like endurance sports so you know, train for marathon or doing we long by trips and stuff like that and uh is is very fun to get back into the like every other day. Try and, you know lift as heavy as you possibly can for a few reps, rest for a long time, you make sure you get all your sleep. It's a very different mentality and so it's been fun doing that again.

I like IT. It's like a feel good, both becoming like Better versions of our high school cells. I like going to like a full on like gamer again and you're get back and away lifting high school.

Me would have been like, what why would I work out? That doesn't some fun.

Okay, college, you call lege you fair, our listeners.

that's all we've got. We are very excited to at some point, come back and talk you about two thousand and seven through twenty twenty two within video and the absolutely unfathomable things that they have done. Imagine if you started a business in the early nineties doing a thing that seemed like a small market at the time, but you you did the thing and then IT turns out that that give you line of sight to something that the same technology was uniquely able to do, that was like ten times bigger than the original thing.

And no one else was even close to you because you had like eighteen years of like building stuff and learning about these technologies to be the best company in the world to take advantage of that next thing, which obviously this machine learning IT is just like an oh my god story. And then you layer on top of that the fact that gaming actually was like ten to one hundred times bigger than anybody ever thought I would be, it's like a literally unbelievable story except that IT happens. So you have .

to believe that ah so great this this is the kind of stuff that like we do required for I been so jazz .

about this yeah I got a lot of research to do on the parley processing and like why this was so perfect for all the machine learning in coptos phy use cases. But that's why we get some time between episode. Go to our research and watch gtc, the GPU technology conference, their annual developer conference, twenty twenty two so thank you so much for listening to us.

Uh leave us a review on apple podcast opens and there or with the new spotify ratings feature on their mobile APP share with a friend, if you like that. We welcome a lots of feedback. And unfortunately, in having a part too, we're going to be able to take your feedback and actually work IT into the next part of the story.

So acquired data FM flash slack coming out with us, talk about this. Check out the lp show, and we've got a job board. If you are looking for the next stage of your career, we have curated all of the positions at acquired data m slash jobs. And with that, thank you to venter vouch and the soft bank that amErica fund. And we will see you next time.

See you next time. indeed. Easy, you busy, you busy, you who? We got the true.