At the annual GPU Technology Conference (GTC) held on March 18, 2023, NVIDIA CEO Jensen Huang unveiled the "most powerful" product ever, the GB200. This revolutionary chip is expected to slash the cost and energy consumption of building and running large models by up to 96%.
Even before the GTC conference, Huang had already earned the title of the "most powerful" man in the tech industry. His company, NVIDIA, and its products have a profound influence on strategic decisions made by tech giants worldwide, shaping the direction and pace of the AI industry. As one observer aptly put it, "NVIDIA's ambition today is not to sell shovels in a gold rush but to build power plants in an electrified world."
The title of "Godfather" in the tech world has been passed down through generations, from Steve Jobs in the first decade of the 21st century to Elon Musk in the second decade. In recent years, the mantle has fallen upon Jensen Huang.
A defining moment in Huang's ascent came when he emerged as a role model for a younger generation. On March 8, he delivered a lecture at his alma mater, Stanford University, where he emphasized the importance of resilience for success. "The higher your self-expectations, the lower your tolerance for failure. So I wish you all the fullness of suffering," he said.
The video of his speech went viral, and screenshots of his words were widely shared on social media. Some argued that these words would have come across as empty platitudes if uttered by anyone else, but coming from Huang, they carried weight.
As the "Godfather" of the industry, Huang's life story, family relationships, and even his fashion sense have become topics of fascination. Just as Mark Zuckerberg is synonymous with hoodies and T-shirts and Steve Jobs made the black turtleneck a fashion statement, Huang is known for his signature black leather jacket.
A fashion blogger analyzed his wardrobe as a "super signifier," an integral part of his personal brand. A sales associate at a Tom Ford store used the leather jacket that Huang wore to promote the brand. During a visit to a night market in Taiwan, Huang's leather jacket made headlines in local news. In a recent interview, he revealed that his wife bought him all his leather jackets because he dislikes itchy fabrics and she thought leather would solve that problem.
Huang's status as a cultural icon was further cemented in early 2024 when he gave a series of interviews to major publications, including The Wall Street Journal, The Atlantic, and WIRED magazine. Journalists delved into every aspect of his life, from his technical expertise to his personal habits, addressing the public's insatiable curiosity about him.
One reporter inquired about his exercise regimen. Huang admitted to being a "lazy exerciser" who tries to do 40 push-ups each day or squats while brushing his teeth. Netizens shared this excerpt from the lengthy interview on Twitter. Another reporter astutely observed that Huang had stopped wearing a watch at some point. He explained that he wanted to focus more on the present moment, which he considered to be "the most important time" — another quotable soundbite was born.
Extreme busyness is a common trait among "Godfathers." In May, October, and November of last year, Jensen Huang made three trips to Taiwan to attend Computex Taipei, visit MediaTek and announce the joint development of automotive SoC chips, have dinner with TSMC's leading figure, Morris Chang, and meet with the chairman of Hon Hai Precision Industry (the parent company of Foxconn). In September, he was received by the Prime Minister of India and also met with researchers from the Indian Institute of Science and other institutions to discuss India's potential in AI.
December was the busiest month for Huang. He traveled to Japan, Singapore, Malaysia, Vietnam, and other countries, meeting with politicians, business leaders, and scientists to discuss establishing an AI research base in Japan, co-creating a local large language model with Singapore, cooperating with Malaysia to build an AI data center, and training AI talent in Vietnam. The itinerary was packed and the business was busy.
Much like celebrities whose every move is followed by fans, Huang's itinerary is closely followed by the world, including China. In June of last year, rumors were circulating in Shanghai that Huang might visit on June 6th to meet with executives from Chinese companies such as Tencent, ByteDance, Li Auto, BYD, and Xiaomi. Media outlets hailed the potential visit as "an event that is highly anticipated by both insiders and outsiders of the industry."
In reality, after attending Computex Taipei, Huang returned directly to the United States. It wasn't until several months later, in January 2024, that videos surfaced of Huang wearing a brightly colored padded jacket and waving a handkerchief while doing a waist drum dance with Chinese employees at their annual meeting. He had come to attend NVIDIA China's annual meeting, and during those few days, he trended three times on Weibo.
The tech industry's mid-to-senior-level professionals and executives are paying close attention to the moves and methods of NVIDIA's founder and CEO, Jensen Huang. They hope to unravel his successful management strategies.
NVIDIA, with its mere 30,000 employees, is "the smallest giant company in the world," according to Huang. It operates with unparalleled transparency and a neural network-like organizational structure rather than a rigid hierarchy. Alfred Wahlfors, co-founder of ListenLabs, attended one of Huang's leadership masterclasses and observed key traits: Huang directly manages 55 employees, holds group meetings instead of individual ones, favors assigning fresh graduates to lead major projects (their lack of experience means they're less likely to impose limits), and prefers offices with minimal elevators (waiting frustrates him).
Huang's technological acumen also shapes the strategic decisions of tech companies. NVIDIA's annual GTC (GPU Technology Conference) was once a niche event catering to the AI and deep learning communities. However, with Huang's growing influence, GTC has become a touchstone for AI practitioners, tech employees, and curious enthusiasts alike.
Huang is a masterful storyteller. In 2020, with the GTC conference held virtually, Huang dramatically unveiled a "large contraption" from his home oven. What appeared to be a model building was actually a compute server housing eight A100 GPUs, a device later highly sought after by large-scale model companies.
In 2021, a digital avatar of Huang made a 14-second appearance at GTC. Months later, NVIDIA officially released a video explaining the creation of the avatar. Amidst the metaverse hype, Huang, NVIDIA, and the digital avatar became central talking points.
At the 2023 GTC, Huang proclaimed the arrival of "AI's iPhone moment," a pivotal point in the industry's evolution.
"Anyone in the industry who's still breathing can't afford to miss GTC," summarized an investor in the semiconductor space.
Savvy investors have even noticed a trend: NVIDIA's stock price tends to surge ahead of each GTC conference. As a result, they are actively buying shares in anticipation of a similar price movement before the 2024 GTC. Notably, NVIDIA's stock indeed rose by 5% in the hours leading up to the most recent GTC.
At this year's GTC, NVIDIA unveiled its "Earth's Mightiest" offerings: the GB200. Composed of two Blackwell GPUs and one Grace CPU, the Blackwell GPU boasts an astonishing 208 billion transistors within its palm-sized footprint, delivering unparalleled computing power that surpasses previous products. This breakthrough promises to reduce the cost and energy consumption of building and running large language models by as much as 96%.
Jensen Huang's reputation as the "Godfather" stems from his prowess in the field of microchips, making him a highly sought-after figure among CEOs worldwide.
Technological advancements foster innovation and attract investment and talent, but they also intensify competition, creating a high-stakes environment for businesses. Access to cutting-edge technologies and the most effective tools is crucial, yet NVIDIA's limited production capacity has resulted in long waitlists for its products, sometimes extending to a year or more.
In May 2022, Elon Musk humorously acknowledged the scarcity of GPUs: "GPUs are harder to get than cocaine right now."
Oracle's founder, Larry Ellison, recounted a dinner meeting with Huang attended by Musk at an upscale Japanese restaurant in California. Beyond savoring sushi, their primary focus was on "begging" for access to NVIDIA's GPUs.
The exclusivity of NVIDIA's GPU chips has led some customers to tread cautiously. According to The Wall Street Journal, the CEO of Groq, a chip startup, expressed concern about exploring alternatives offered by NVIDIA's competitors, fearing retribution from NVIDIA. Whenever inquiries arose, they adamantly denied any such efforts, as if engaging in a clandestine affair.
In China, the battle for chips is becoming even more complex. Hundreds of major companies and startups have entered the large-scale model market, but due to geopolitical and policy constraints, the US Department of Commerce has restricted the sale of high-end chips by US companies to Chinese entities from October 2022 to October 2023. The list includes A100, A100's China-specific A800, and H100. These top-of-the-line chips are in short supply, not only testing the financial resources and connections of major companies and startups, but also their decision-making speed and strategic vision.
This is also the key reason why Jensen Huang is still receiving a lot of attention in China. His every move indirectly affects the fate of some major companies.
His itinerary over the past year has been interpreted with deeper implications. The first time Jensen Huang visited Vietnam, he said that Nvidia "regards Vietnam as its home". This statement is highly consistent with the US State Department's announcement in September that it would establish a partnership with Vietnam under the "Chips Act"; Jensen Huang's second visit to Chinese Taiwan on October 17th coincided with the US updating its export control policy.
Data from Omdia Research shows that in the past year, global tech companies have shipped as many as 650,000 H100 units, with Meta and Microsoft receiving 150,000 GPUs each, Oracle, Amazon, and Google receiving 50,000, and ByteDance being the Chinese company that received the most Nvidia chips, with over 20,000 units.
Nvidia's GPU Dominance
Nvidia's success isn't a matter of luck but rather the result of aligning with key technological shifts. Initially known for gaming GPUs, Nvidia discovered their potential in artificial intelligence (AI).
In 2016, Nvidia introduced the DGX-1, the first AI system, to Elon Musk, then OpenAI's co-founder. In 2018, frustrated by OpenAI's slow progress, Musk attempted to gain control but was rejected, leading to his departure.
Since then, Nvidia has capitalized on technological advancements. During the Bitcoin boom, Nvidia's GPUs became valuable for mining. In autonomous driving, Nvidia's Orin chip is widely adopted by car manufacturers, including NIO, Li Auto, and BYD.
With the emergence of ChatGPT 4, Nvidia's GPUs have become essential for AI model training. Their A100 and H100 products have dominated the market, securing Nvidia an 80% share.
Nvidia's technological prowess is evident in its product naming. The A100 honors physicist André-Marie Ampère, while the H100 pays tribute to Grace Hopper, a pioneer in computer science. The latest Blackwell chip is named after David Blackwell, a mathematician and game theorist. Each successive chip has been hailed as the "world's most powerful GPU," showcasing Nvidia's continuous innovation.
Nvidia's Dominance in the Tech Industry
Nvidia's growth trajectory has been nothing short of remarkable. In May 2023, the company achieved a market capitalization of $1 trillion, making it the world's leading semiconductor firm. On February 22, 2024, Nvidia's stock soared by 16% on the day of its earnings release.
In just one day, Nvidia's market cap increased by approximately $277 billion—equivalent to 1.48 Alibaba Group Holdings. Nvidia achieved a market cap increase from $1 trillion to $2 trillion in just eight months, a feat that took Microsoft and Apple nearly two years.
Nvidia's growth rate stands out among tech giants. In Q4 2023, Apple and Meta reported revenue growth of 2% and 25%, respectively. In the chip industry, Nvidia's top competitors, AMD and Intel, posted gains of 10%, while Nvidia's growth rate was an astounding 265%.
The steep upward curve of Nvidia's stock price is a clear indication of its success. If one had invested $5,000 in Nvidia shares in 2000, those assets would now be worth over $4.7 million. With a 3.51% stake in Nvidia, CEO Jensen Huang's net worth has reached $69 billion, ranking him 20th on Forbes' list of wealthiest individuals.
The Rise of Jensen Huang
Every tech titan has their own unique story. Jobs was abandoned by his Syrian immigrant father and American mother before being adopted by an American couple. Musk spent his childhood in South Africa. Huang's journey is no less compelling—a quintessential "American Dream."
Born in Taiwan, Huang was sent to live with his aunt in Washington State at age nine, where he was inadvertently enrolled in a boarding school known for troubled youth. He faced bullying and was assigned to clean toilets before his parents immigrated to the US. He then attended a regular high school and worked part-time as a dishwasher at Denny's.
At the age of 30, while working at Denny's, Huang co-founded Nvidia with two colleagues. He invested his $200 savings for a 20% stake in the company. Three decades later, that same Denny's location installed a "Nvidia Memorial Booth," commemorating its connection to Huang and the company's origins.
Coincidentally, the same year that Huang arrived in the US, a three-year-old Su Zifeng also immigrated with her family from Taiwan. She would later become CEO of Nvidia's major rival, AMD (Advanced Micro Devices). Due to their familial connections, some have jokingly referred to the rivalry between these two companies as a "war between an uncle and his niece."
Nvidia's Dominance in AI Compute
Nvidia has long faced competition, but the recent surge in AI's demand for high-performance chips has intensified the chase as other players vie for a share of the lucrative market. Nvidia's latest financial report in February revealed a gross margin of approximately 76.3%. According to Raymond James analyst Srini Pajjuri, Nvidia's H100 chip costs around $3,000 to produce, while it is priced at $25,000.
Rival companies are rapidly catching up. In 2024, Intel and AMD are expected to release their own AI-focused chips. Major customers may also transform into competitors, as reported by The Wall Street Journal. Nvidia heavily relies on large customers, with one contributing over $11 billion, representing nearly a fifth of Nvidia's revenue in the previous fiscal year. Google, Microsoft, and Amazon, as cloud computing providers that rent out computing power, are major buyers of Nvidia's AI training chips, collectively generating over $9.2 billion in sales.
These three companies are developing their own chips. According to The Wall Street Journal, a source familiar with Google's chip strategy revealed that while Google provides Nvidia's chips to customers as a cloud service, they also offer their own chips tailored to customers' budgets and requirements.
On the same day that Nvidia unveiled its latest quarterly results, major customer Microsoft and competitor Intel announced a partnership to produce custom chips. Microsoft clarified that the custom chips would complement, not replace, Nvidia's products, allowing customers to choose.
In China, the situation is more complex. Huawei appeared for the first time on Nvidia's list of competitors in its 2024 annual report.
Despite facing competition, Huang remains unfazed. "It's not something that should keep me up at night—because I should make sure I'm exhausted from working," he said.
During a visit to Shanghai for Nvidia's annual conference, Huang brought a suitcase filled with cash-filled red envelopes to give away as lucky draw prizes for employees. When one of the lucky draw winners turned out to be an employee named "Huawei," Huang was taken aback. Using broken Chinese, he asked, "Why is your name Huawei?" The audience erupted in laughter at the unexpected coincidence.
Nvidia's competitive advantage lies in its ecosystem. The Economist explains that Nvidia's soaring valuation is not solely based on faster chips; its competitive advantage also includes a network and ecosystem. Data centers training large models require thousands of GPUs to be used in conjunction, and Nvidia has specialized technology and products to enhance the efficiency of the interconnections between these cards. This ability to optimize chip networking performance is not easily replicated by every competitor.
Moreover, Nvidia has a software platform called CUDA that empowers customers to fine-tune their server performance. The Economist observes that competitors hoping to displace semiconductor giant Nvidia must beat it in all three areas: chips, networking suites, and software.
Another one of Huang's moats is investment. According to Dealogic, Nvidia invested in approximately 36 startups in 2023, three times more than the previous year. Many of these startups are in the fields of AI, robotics, automation, and healthcare, which are closely related to Nvidia's chip products.
Nvidia also invested in a cloud computing company called CoreWeave, which focuses on purchasing Nvidia chips in bulk and renting out computing power through large data centers instead of developing its own chips.
However, the fundamental question facing the "Godfather" is whether this current wave of opportunity will turn into a bubble, as has happened in the past. Cryptocurrencies, autonomous driving, and the metaverse once soared to great heights before crashing down, taking Nvidia's stock price with them, even halving it at one point.
Star fund manager Cathie Wood believes the AI boom is not a bubble and that Nvidia is the undisputed leader in AI, but the market expectations are too high for Nvidia to meet. "We do think it has overshot," she said, selling about $4.5 million worth of Nvidia shares in February.
Regulatory and policy risks also loom large. As reported by The Wall Street Journal, competition regulators in several countries are investigating Nvidia's business practices due to its dominant market position.
Regardless, the rise of "Godfather" Huang is inextricably linked to the era we live in. The wave of AI adoption is spreading across nations, and behind every cresting wave is the driving force of Huang and Nvidia. Whether AI companies will ultimately succeed is unknown, but one thing is for sure: they all need Huang's computing power.
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