Over the past 20 years, Nvidia (NVDA) has surged into global conversation.
Semiconductor companies are considered international leaders in computer chip design and manufacturing, and have helped revolutionize the rise of artificial intelligence (AI).
Beyond the strengths of the gaming, data and AI field, Nvidia has announced plans for the Quantum Research Center in Boston. There, CEO Jensen Huang said researchers could tackle issues from drug discovery to material development.
From creating hardware for the gaming industry to designing the power of AI, check out Nvidia's path to where we are today.
On April 5, 1993, Jensen Huang, Chris Malachowsky and Curtis Priem founded Nvidia, which first focused on the design and production of 3D graphics processors for computing and video games.
The company's first product release, the multimedia processor NV1, did not receive the reception its founder wanted. The financial situation that followed was very disastrous, with Nvidia lifting half of its staff, leading to an informal motto. “We have been closed for 30 days.”
In addition to the impressive returns of NV1, there is a partnership that has increased pressure by Nvidia building a console graphics chip with Japanese video game company Sega. However, even if they pivot into another company for tips, Sega has invested $5 million in Nvidia.
Nvidia CEO Jensen Huang was during his keynote speech at CES 2025 in Las Vegas on January 6, 2025 (photo by Artur Widak/Nurphoto by Getty Images) ・Nurphoto via Getty Images
Despite financial challenges and small teams, Nvidia released its next chip in 1997. It was a success. The RIVA 128 has been sold for over 1 million units, allowing support for high resolution 2D and 3D graphics.
Based on the basis of the sale of the Riva 128, Nvidia produced the Riva TNT. This further solidifies its position in the industry with better image quality and performance. Two years later, on January 22, 1999, Nvidia was published to the New York Stock Exchange (NYSE) for $12 per share, and by May it had shipped 10,000,000 graphics processors.
Later in 1999, Nvidia released the Geforce 256, calling it the world's first “graphic processing unit.” By selling chips directly to customers, we have popularized the term “GPU” rather than simply including them in devices and consoles.
GPUs took on heavy graphics workloads with their ability to split larger tasks into small, concurrently capable of running tasks called parallel processing. The device was able to operate faster with other processing features, so the GeForce 256 provided smoother, faster and more realistic graphics.
Nvidia, who discovered it had been successful in supplying GPUs to both customers and consoles such as Xbox, joined the Nasdaq 100 and S&P 500 in 2001.
In 2006, Nvidia launched CUDA. It is a platform that allows users to access the parallelism capabilities of the GPU and run their own software rather than just graphics. Between 2006 and 2017, Nvidia invested nearly $12 billion in research and development in the majority of funds heading towards CUDA.
CUDA downloads delayed entry into the 2010s, and CUDA offered users the ability to use chips for non-game purposes, but initially did not appear to be rewarded by investors.
“Some investors were Nvidia fans in the late 2000s and gave the bounty of doubt in the first five years of CUDA investment,” Podcast co-host Ben Gilbert said in an episode in 2022. “But by the mid-2010s, market demand was still not showing up in a big way and was becoming a bigger investment.”
However, with later technological developments, CUDA will become important to the company.
Bryan Catanzaro, vice president of Nvidia's Applied Deep Learning Research, told Yahoo Finance in 2023. “We were selling all our products to accelerate computing, so we were selling these gamer cards, so we made all our products even more expensive,” Wall Street believes that this investment has really begun.
In 2012, students Alex Krizhevsky and Ilya Sutskever trained the visual recognition neural network AlexNet on two Nvidia GPUs using CUDA.
AlexNet's groundbreaking performance in image identification has demonstrated that it significantly reduces training time compared to previously used CPUs to train machine learning models using GPUs.
Following this advance, Nvidia began focusing on artificial intelligence, supported by revenue from games. By 2016, the DGX-1 was announced. DGX-1 has announced a system specifically designed for deep learning and an increasingly large language model. That year, Nvidia shares almost tripled in price.
“It's 'Fate meets serendipity,'' Nvidia CEO Jensen Huang told Yahoo Finance at the time. “People think it's an overnight success, but like most overnight success, it took us years.”
At the same time, Nvidia had the opportunity to undertake strategic acquisitions such as wireless company ICERA in 2011 and Portland Group in 2013. They tried to acquire semiconductor and design company ARM (ARM) in 2020, but ultimately the transaction fell after regulatory concerns.
In March 2022, Nvidia announced the H100 “Hopper” chip. By managing the majority of the market share in this GPU, major companies, including Alphabet (Goog), Amazon (AMZN) and Microsoft (MSFT), have now transformed into billions of Nvidia as they began developing AI and data-driven products.
It is made to prosper
One such company is Openai (Opai.pvt). Its relationship with Nvidia dates back to 2016, when Nvidia donated its first DGX-1 supercomputer to a startup. In November 2022, Openai launched ChatGpt, a language model built on the Nvidia GPU, and quickly reached the headlines.
Less than two months later, ChatGpt reached the record for the fastest growing consumer applications in history, reaching 100 million active users per month in January 2023, according to a UBS study.
“A new age of computing has begun,” Nvidia CEO Jensen Huang said in a 2023 statement. “Companies around the world are moving from general purpose to accelerated computing and generator AI.”
Nvidia's revenues more than doubled for the quarter ending in January 2024 as investors are increasingly interested in artificial intelligence and demand for GPUs to run their models continues to increase.
Following the release of its quarterly report, Nvidia has shown the largest one-day increase in stock market history, adding a value of $277 billion. Then the next day it reached a $2 trillion valuation. However, the record hasn't stood for a long time. Nvidia beat it again just two months later.
That March, Nvidia announced its next chip, Blackwell. Chips that offer higher performance with reduced cost and energy consumption are designed to work better than previous versions when linked to work in large quantities.
Shortly afterwards, Nvidia announced a 10-1 stock split in June 2024. Following the split, Microsoft and Apple (AAPL) have become the most valuable companies in the world at $3.3 trillion. By November 2024, it was added to the Dow Jones Industrial Average.
Despite its success, Nvidia also encountered challenges through its ascendance. In 2018, it faced a class action lawsuit claiming it did not properly disclose to investors the cryptocurrency market's impact on revenue from GPU sales.
At the time, “miners” of cryptocurrencies such as Bitcoin (BTC-USD) and Ethereum (ETH-USD) used GPUs to complete transactions and secure new crypto tokens. This process requires critical computing power, making Nvidia GPUs a popular option. Nvidia paid a $5.5 million settlement to the SEC in 2022 for the matter, and in December 2024 the Supreme Court dismissed Nvidia's appeal and continued the 2018 case.
This was not the first time Nvidia has managed legal issues with chips. In 2016, we solved cases that included marketed performance and real-world features for the GTX 970, paying $30 per purchase.
In addition to legal issues, there is also the challenge of supply keeping up to demand. The coronavirus pandemic and increased reliance on remote work technology led to a global chip shortage for the first time in early 2020. Other factors that extended the shortfall until 2023 include the first US-China trade war, the harsh weather phenomenon, and the Russia-Crane war.
A December 2024 report from IDC predicts that global demand (HPC) for AI and high performance computing (HPC) will grow in 2025.
President Trump announced the project Stargate in January 2025. This includes tech companies such as Oracle (ORCL), Openai and SoftBank (SFTBY) investing in $500 billion in AI infrastructure over the next four years. As a technology partner in the project, Nvidia has seen a surge in stocks reach a market capitalization of $3.6 trillion.
However, later that month, Chinese company Deepseek released its own AI model. This was reportedly trained at a significantly lower cost than its competitors. Following the announcement, Nvidia's shares fell nearly 17%, down by $589 billion, marking the largest daily loss in stock market history.
Following the drop in March 2025, it brought the debut of Blackwell's successor Nvidia's Blackwell Ultra. The new chip has announced performance 1.5 times the performance of the previous chip. This helps AI models to answer queries faster.
In April 2025, Trump banned the company's H20 chips from exporting to China. This is because chips like Nvidia are important for developing AI technology. Nvidia said in its first quarter report that it is expected to miss out on $8 billion in potential revenue due to the ban.
Despite increased export restrictions, Nvidia continued to grow, passing Microsoft again easily in June as the world's most valuable company. Some look forward to it and hope that it will become the first company to reach a market capitalization of $4 trillion.
“[Nvidia] Ark Invest founder Cathie Wood spoke to Yahoo Finance earlier this year.
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