The Nvidia Way | Hacker News Reader

The Nvidia Way

thechipletter.substack.com

164 pointsklelatti71 comments

I just finished this book. I thought it was a great read, capturing most of the problems (with product, sales, marketing, competition) Nvidia faced in its life and how exactly the team solved them each and every time. It also goes into how the management, org structure, and culture have empowered its engineers to find creative solutions to staying alive in the brutal graphic chips industry and continuously discover and exploit new market opportunities.

I learned a lot about how important not just superior technology, but better operations, marketing, sales, and culture are all critical to a successful business.

The only con of this book is that it skips over some parts of nvidia’s history like the short-lived crypto boom, failed acquisition of ARM, etc. It’s still just a minor flaw in an otherwise great book though.

The whole ARM acquisition attempt really smelt of subtle stock market games, because the alleged benefits of such a deal made no sense. With the Arm CEO being ex Nvidia I'm sure he was in on it. Looking forward to someone writing up an account of what really happened.

I think that the blocking of the deal by competition authorities shows the potential benefits of the deal (for Nvidia) in having control of Arm, in addition to making Arm-based SoCs, were real.

Also, Rene Haas (ex Nvidia) became CEO of Arm after the deal fell through. Simon Segars was CEO when the deal was announced.

> I think that the blocking of the deal by competition authorities shows the potential benefits of the deal (for Nvidia) in having control of Arm, in addition to making Arm-based SoCs, were real.

China was concerned about more US influence. The other regions were concerned about stifling of innovation. In reality, a successful acquisition would have meant that most customers would have started transitioning away from ARM and sooner to available RISC-V or Cadence/Synopsis solutions.

> Also, Rene Haas (ex Nvidia) became CEO of Arm after the deal fell through. Simon Segars was CEO when the deal was announced.

Rene Haas was EVP of the whole IP business (CPUs, GPUs, NPUs, etc) before becoming CEO. His influence with the CEO can't be understated.

I posit that this was an enormous gamble to boost valuations of both NVIDIA and ARM and that they knew from the beginning that the deal would not go through. Anyone who understands the ARM business model could have told you that.

> I posit that this was an enormous gamble to boost valuations of both NVIDIA and ARM and that they knew from the beginning that the deal would not go through.

You posit it without saying why the valuations would go up given that you think they - and everyone else given what you say - thought the deal wouldn’t complete.

Yeah, it was a good book. I got an extremely heavy dose of nostalgia from its description of the late-90s Voodoo2/Riva128 era.

It was such a fast-moving era, too. Check this out: https://www.anandtech.com/show/178/2

A card released in September 1997 is described as "an aging and slowly dying chipset." I suppose it parallels AI today, where a model released a year ago is already obsolete on the high end...

Relevant context: In July of 1998.

I recall being on roughly a 6 month upgrade cycle for my pc back then. Alternating between cpu/mobo/mem and gpu.

One of the reasons why Nvidia managed to get ahead was that they managed to get a new chip out every 6 months without fail, so there was always a new Nvidia card to upgrade to.

Nostalgia for the 1990s is real. I loved that era. PC gaming was awesome. I bought tons of 3D graphics cards from Rendition Verite, 3dfx Voodoo and obviously Nvidia. Having John Carmack tweet about my book nearly made me faint (surreal!). I adored his Doom and Quake games so much.

Does it mention the investment from sega that saved Nvidia from going out of business. I think the Nvidia chips became part of some sega arcade boards, might be wrong about that.

That's at the beginning of the book, and it was apparently something of a debacle. The NV2 chip that was supposed to go into Sega's next-gen console never made it, but a $5M investment from Sega did keep Nvidia afloat until the Riva128 launched.

Despite buying a Dreamcast on launch day I only heard about this story in the last week or so ago in a YouTube comment with Jensen Huang congratulating sega on the new virtua fighter. Unfortunately he keeps calling it virtual fighter:

https://m.youtube.com/watch?v=9NCp1BdWJG0&pp=ygUcSmVuc2VuIEh...

I'll go one further - operations, marketing, sales, and culture _are_ what makes a successful business. Superior technology is a bonus on top of that.

Superior technology in a company that hasn't figured out how to operate, or market and sell may as well not even exist.

You missed Finance. There is lot of financial engineering going on to keep orgs alive and quickly adapt to ever changing needs. Dealing with cross border diff in taxes, subsidies, tariffs, regs, forex, interest rates, real estate/rent, labor costs and their constant changes is no joke.

Each of these specializations (just like tech) are evolving at their own rates and are all equally capable of outpacing each other depending on the environment.

And, god forbid, meta-issues like long-term cashflow planning when you're making big changes to your internal organizations and processes, which lets you worry less about funding. And/but investing in complex thinking about operations is part of the book's thesis.

I didn't. In my worldview, I put Finance as the majority stakeholder in "operating" the company even though there are plenty of teams and roles with somethingOps in their titles that might disagree.

The tech part of tech companies is the easy part in my opinion. Step out into these other domains where you have to deal with _people_ and a company's skill or lack thereof gets really obvious really quick.

You mean, like… Intel these past few years?

I'm very glad I read the book, but it did lean a little towards the hagiographic side. From the outside it looks like the same high-pressure culture that drives so much innovation at Nvidia also drove their conflict with Apple.

+1 with your assessment of trending towards a hagiography. The author is not Isaacson. I wish he had spent more time with the people that probably don’t have the best view of Huang’s methods, and approach to running the company. Showing the other side in a more vivid way so the reader can make their own conclusion would strengthen the book and provide a holistic, fuller profile of Huang and Nvidia. Probably the price for access, and still better than nothing…

Nvidia appears to be another pressure-cooker, dog-eat-dog SV company, that outlasted competitors thanks to shrewd bets and urgent execution. Clearly, a great accomplishment, but we’ve seen other companies succeed with similar culture… this isn’t a “new way”… a relentless, obsessive, ruthless technical founder with good business sense (Huang like Gates were able to secure partnerships/licenses of needed technology early on.. same mold as Musk, Zuck) who understands the technology and business implications in detail is a movie we’ve seen before..

I sigh a little whenever anyone mentions Isaacson. My book had a different goal. I wanted to write a serious, substantive business history of Nvidia and explore the reasons for its success. Walt has a different style and focus, which wasn't what I aimed to do.

Thanks for the kind words swimwiththebeat. I really appreciate it. I didn't get to the ARM acquisition failure and crypto boom given time constraints. There is so much to cover in Nvidia's three decade history, so I had to pick and choose.

While the book is certainly a great read, I can't help but think that many people will try to replicate NVIDIA's culture (a la founder mode) when all they will do is replicate the effects/correlations and not the root causes.

NVDA's success goes probably extremely deep into Jensen's character, the leadership team he built and the industrial context of the time. It is unclear to me how much of it is really useful in the foresight.

> It is unclear to me how much of it is really useful in the foresight.

While the specifics are of limited use, they do point to very useful generalities. Leader character. Leadership team. Deep understanding of the technology and industry. Long-term technological leadership. And avoiding Wall Street's quick-buck predators - and their twisted mindsets - as much as possible.

That's a good list. I'd also add a willingness to take risks, which was particularly evident in the early years with RIVA 128 but also arguably CUDA was a risk and one that didn't pay off until relatively recently.

Sure. My point is that, averaged out over all the great success stories and their corresponding books, the greatest common divisor fits in a blog post:

- Make big bets - Build core, differentiating technology - Lead by example - Science the sh*t out of operations and finance

Important to note that many huge successful companies got there by making big bets and most companies that make big bets fail.

The market rewards innovation in the aggregate, but if you’re a founder trying to make it big, there’s still a lot of luck involved.

The deep understanding of technology is so important. So many CEOs are empty MBA suits who are BS artists and don't know anything. I wish I could shout this to the rooftops even though I do cover it in the book. The importance of technical competence and avoiding finance/MBA/consulting executive CEOs.

> While the book is certainly a great read, I can't help but think that many people will try to replicate NVIDIA's culture (a la founder mode) when all they will do is replicate the effects/correlations and not the root causes.

That doesn't imply that you cannot get meaning from the story.

This is the naivete of many founders but it extends beyond startups and it is something embedded in human beings. There is no logical reason that you can copy the material and human context where NVIDIA, Apple, etc were born.

> There is no logical reason that you can copy the material and human context

I assume you mean can't

Replicating Google/NVDA/etc today is useless.

Building a future Google/NVDA is extremely hard and draws little inspiration from the current Google/NVDA.

"Every moment in business happens only once" (P. Thiel, From Zero to One)

I've never seen a company benefit from layers of MBAs who are only there to hide their screw ups from the leadership while doing whatever they can to get promoted.

Strong organizations are usually bottom up, with a lot of ownership and direct contact between people doing the work and ones steering the ship.

Founder-led companies still have a shred of such a culture left.

Once founder ceo leave, it is an inevitable slide into decay.

I've seen founder led companies also get derailed by this, usually after raising a large round and getting forced by VCs to put their buddies in management positions.

I'm sure there are MBAs at Nvidia too, but what I found interesting is the vast majority of dozens of Nvidia employees from early years I interviewed were engineers and technical/operationaly employees. I don't remember interviewing an MBA.

100%. The vast majority of it is meaningless. People tried to copy google back in the day, and apple, etc. None of it makes a meaningful difference. The only thing Google, Apple, Amazon, Nvidia etc have in common - a really great product/service in a large, growing market that lends itself to a competitive advantage.

Yes – people forget that during the Jobs era, he was very transparent that Apple's secret sauce was almost obessively focusing on thoughtfully executed tentpole products, but otherwise having nearly conventional org structure and culture (modulo Jobs letting managers internally poach people for secret new projects.)

The fact that Apple now depends a lot on services for profitability has changed their priorities and ethos quite a bit, and I think the late-2010s depths of shitty hardware and software QA demonstrated that.

I agree with this. You have to do the whole culture - not just a part of it. One prominent CEO (I won't name) started posting on social media about the book, the parts of being blunt and direct in feedback, and I bristled. He certainly doesn't understand the entire culture of treating employees like family in times of health crisis.

Hour long asianometry interview with the author that I enjoyed: https://m.youtube.com/watch?v=3vjGIZOSjLE

Intel and AMD's recent missteps combined with that interview make me think that Nvidia will be in the lead for a long time.

The Asianometry interview was so much fun. It makes a huge difference when the host and interviewer reads the book and knows background technology/material.

Is this the same Tae Kim that wrote how to learn Japanese?

https://guidetojapanese.org/learn/

No. One is a technology writer for Barron's based in New York:

https://www.linkedin.com/in/firstadopter

https://x.com/firstadopter

The other is a software engineer based in Japan:

https://x.com/kimchi314

Also not to be confused by another Tae Kim, who is the VP of Omniverse Engineering at NVIDIA.

https://www.linkedin.com/in/taeyongkim

NO. I'm the real Tae Kim.

In addition to Tae Kim's interview with Asianometry's Jon Y [1] mentioned in the post, readers might also enjoy his more recent interview on The Riff podcast [2]. Both are terrific.

[1] https://www.youtube.com/watch?v=3vjGIZOSjLE

[2] https://www.youtube.com/watch?v=I5qub-IS2gY

Also a deep dive 3 part series coverage by the Aquired podcast team references the book (if I remember correctly) :

https://www.acquired.fm/episodes/nvidia-the-gpu-company-1993...

The book was written after Acquired podcasts.

A different perspective from the outside: Nvidia's journey features three pivotal milestones that shaped its success:

- First, the 2006 acquisition of ATI by AMD solidified Nvidia's position as a dominant player in the industry.

- Second, Geoffrey Hinton's groundbreaking work on deep learning over 25 years laid the foundation for AI advancements that aligned perfectly with Nvidia's GPU capabilities.

- Third, Nvidia's recognition of its leadership in AI has propelled it to the forefront of the technology revolution.

As a consultant in the search space I always heard people ask “how can we be like Google”. It always felt wrongheaded of course. Essentially assuming cargo cultish practices of successful companies will lead to success.

So I think these stories are interesting but I take them with massive grains of salt. There’s randomness and luck. Theres the mix of personalities, and processes that fit this specific culture. There’s just timing. Success can be just as idiosyncratic as it is about drive or specific practices. And it’s hard to tease out WHICH practices actually contributed to success, and what might be holding this company back.

So I read these more for inspiration and entertainment. Not as a “X worked for Nvidia, so I should 100% do that” perspective.

The article says Nvidia stock price was $4 in 2019... However I recall it being higher. I wonder if this number is after multiple stock splits (1:4 and 1:10 since then) looking back?

That is accurate, you can check it in any stock chart like [1].

[1] https://finance.yahoo.com/chart/NVDA

Yes, it’s only $4 retrospectively due to splits. At the time the price was listed higher.

One of the major contributing factors to success was multiple overlapping design teams and outsourced chip fabs. That allowed Nvidia to deliver a cycle time of six months instead of the 18 month cycles of their competition. While one team was delivering, another would be designing. It allowed Nvidia to lap the competition over and over again.

There was a chapter on this in Good Strategy, Bad Strategy by Rumelt that was pretty good.

Is there a book covering TSMC in a similar way?

(I know about Chip War but hesitant to spend time with it as I'm really not interested in politics of it all).

Semi-unrelated: Best book on Xerox/PARC is Dealers of Lightning [0].

[0] amazon.com/Dealers-Lightning-Xerox-PARC-Computer/dp/0887309895/

>(I know about Chip War but hesitant to spend time with it as I'm really not interested in politics of it all).

Ehh, I wouldn't call it "politics-heavy"

Can anyone from team green comment on the accuracy of this account? I'm interested in how nvidia has evolved and mistrusting of the conflict of interest between accuracy and readability.

I interviewed over 100 people directly including Jensen, the two other cofounders, the two original VC investors and dozens of current/former employees. Nvidia cooperated with the book and facilitated interviews.

This book is a fairly decent complement to the Chip War (by Chris Miller).

Chris gave me an amazing book recommendation and blurb. I'm humbled and grateful. He was the first external validation of the book.

I haven’t read this book, but doesn’t the title sound a bit like he’s taking credit for the company’s success? NVIDIA was a good company from the very beginning. I don’t know where their CEO was back then, maybe he was still wetting his pants.

Jensen Huang was their first CEO!

Haha that really changes things a bit. I’m sorry. I’ve been using their cards since the Riva TNT and I didn’t know the CEO had never changed

I guess it just shows that Jensen has had a (perhaps admirably) low profile until recently.

Oh, he's always been flamboyant.

It's just that when the company was just one gpu maker in a crowed, tiny and not very profitable market, no-one paid much attention.

Now they are making the shovels and pickaxes for the current gold rush, and correspondingly are competing for the spot of the largest company in the world, a lot more people are paying attention to his antics.

Fair comment. I'm in the middle of reading the Isaacson Musk bio so maybe the contrast between the two made me think of Jensen as shy and retiring.

Read my comment above on the Isaacson comparison. His focus is very different than mine. I wanted to write a serious and substantive business history of Nvidia and explore why it became successful.

Hello Tae and thanks for a terrific book! My comment only compared Elon and Jensen, not Isaacson's book and yours. I completely understand that you had a different set of objectives and you did a fantastic job in setting out what makes Nvidia special without turning it into a Jensen hagiography.

Nvidia was founded by

    Jensen Huang
    Chris Malachowsky
    Curtis Priem

Jensen Huang has bee the CEO the whole time.

Malachowsky is still there as a Fellow, member of executive staff and a senior technology executive for the company.

Priem left the company in 2006 and sold all his shares.

Thanks. Whenever I feel badly about leaving in 2012 and dumping shares I’ll think about Curtis

"If Curtis Priem, Nvidia’s first CTO, had held onto all his stock, he’d be the 16th richest person in America. Instead, he sold out years ago and gave most of his fortune to his alma mater Rensselaer Polytechnic Institute." https://www.forbes.com/sites/phoebeliu/2023/11/26/this-nvidi...

Jensen is a founder and has been at the helm from day 1

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