Advertisement
Australia markets closed
  • ALL ORDS

    8,209.20
    -63.50 (-0.77%)
     
  • ASX 200

    7,971.60
    -64.90 (-0.81%)
     
  • AUD/USD

    0.6695
    -0.0016 (-0.24%)
     
  • OIL

    82.31
    -0.51 (-0.62%)
     
  • GOLD

    2,420.30
    -36.10 (-1.47%)
     
  • Bitcoin AUD

    95,224.95
    -1,436.89 (-1.49%)
     
  • CMC Crypto 200

    1,321.66
    -9.24 (-0.69%)
     
  • AUD/EUR

    0.6151
    +0.0002 (+0.03%)
     
  • AUD/NZD

    1.1104
    +0.0017 (+0.16%)
     
  • NZX 50

    12,325.60
    -3.84 (-0.03%)
     
  • NASDAQ

    19,705.09
    -94.01 (-0.47%)
     
  • FTSE

    8,145.89
    -59.00 (-0.72%)
     
  • Dow Jones

    40,665.02
    -533.08 (-1.29%)
     
  • DAX

    18,212.31
    -142.45 (-0.78%)
     
  • Hang Seng

    17,415.09
    -363.32 (-2.04%)
     
  • NIKKEI 225

    40,063.79
    -62.56 (-0.16%)
     

How party animal Jensen Huang built the world’s most valuable company

Jensen Huang
Jensen Huang has led Nvidia to a $3 trillion-plus valuation

Every summer, Jensen Huang used to host Nvidia’s latest crop of interns at his Silicon Valley mansion, opening up his house and pool area, as well as his collection of supercars.

Despite being described by one attendee as a “frat party”, the gatherings were more of a nerdfest. Social media photos from the event show interns holding fruit cups rather than beers. In one, the billionaire host perches on his diving board with an intern, the pool’s waters untouched.

Today though, Huang has plenty of reasons to let loose. Last week Nvidia overtook Apple and Microsoft to become the world’s most valuable company, with a stock market value of more than $3.3 trillion (£2.6 trillion) – more than every company in the FTSE 100 combined. Huang became the world’s 12th richest person with a personal wealth of $119bn.

ADVERTISEMENT

The 61-year-old, perpetually donned in a leather jacket and described by former employees as an intense but low-key manager, has become a rock star in recent months as his company has turned into the fulcrum of the artificial intelligence boom. Its microchips, known as GPUs, are central to how systems such as ChatGPT operate and have become the tech world’s most indispensable commodity.

At a tech conference in Taiwan this month, Huang – who was born on the island – was mobbed by crowds, posing for endless selfies and dancing with influencers. In one case he was asked to sign his autograph on a female fan’s top across her chest; after wondering aloud whether this was a good idea, Huang complied.

Mark Zuckerberg described the Nvidia boss as “Taylor Swift, but for tech” when a social media follower asked who he was. The phenomenon was dubbed “Jensanity”.

“During that week, my entire social media feed was all ‘Jensen, Jensen, Jensen’. It got to a point where you feel like it’s Jensen now running the country,” says Jason Hsu, a tech-focused former legislator in Taiwan.

Jensen Huang signs a fan's chest
Jensen Huang's celebrity status has reached new heights since his company became the world's most valuable - CHP

If it felt like a victory lap, it was a justified one. Huang worked at the microchip company AMD before co-founding Nvidia in 1991, in a Denny’s fast food restaurant where he once washed dishes (the table where Huang and his co-founders dreamt up the company now has a plaque above it, installed when Nvidia’s market value surpassed $1 trillion).

In its early days the company focused on video games, developing components that allowed games consoles and personal computers to render three-dimensional graphics by stacking countless microscopic triangles on top of each other. It went public during the dotcom bubble at a $625m valuation.

While the company became a key player in the gaming industry, it would be another decade before the seeds of its present success were sown. In 2012, scientists at the University of Toronto, led by the British computer scientist Geoff Hinton, developed an image recognition program that used Nvidia’s graphics chips, rather than the central processing units that most computers relied on.

Hinton would later describe it as the “big bang moment” for today’s AI movement. The program, built on two Nvidia chips bought on Amazon, blew away the competition in an annual machine vision competition and its underlying architecture spawned the deep learning craze.

Nvidia’s chips being perfect for machine vision was something of a happy accident, but Huang capitalised. While AI was still a minor academic pursuit compared to the lucrative video games business, Huang told managers that Nvidia would become an AI business and threw resources at developing advanced chips that could power synthetic intelligence.

“It turned out to be really useful for stuff we didn’t know it was going to be useful for,” says a former Nvidia executive. “But even then you could see that [Huang] bought into the idea of a use of the GPU outside of graphics and gaming.

“He had a vision at that point that it would do something, he probably didn’t know what, but he could see there was an opportunity that a lot of us didn’t see.”

“He’s building a church, and has been laying it brick by brick for years,” says Hsu. “One day all of a sudden you see this magnificent church in front of you, but he’s been toiling for years to make it perfect.”

The rewards have now become obvious. Last month Nvidia said that revenues had risen by 262pc in the last quarter, to $26bn. Profits have climbed more than sevenfold, from $2bn to $15bn. The waiting list for the company’s superpowered chips runs into next year.

Huang has spent years nurturing relationships with major customers and suppliers, hand delivering initial orders. At the same time, he has tied users into a software system that has given the company an unassailable lead, despite rivals seeking a piece of its fortune.

Despite his approachable public persona, within Nvidia he is known as a demanding boss. Huang makes a point of quizzing even junior employees about their work and can dash off hundreds of emails to executives in a day.

“He’s not the right guy to bulls---,” says a former employee. “The people who can work in Jensen’s world have no hiding place for success or failure. The people he struggles with are the people who typically don’t respond in the right way towards mistakes.”

“Any weakness, real or imagined, is called out and people can be publicly beaten up,” says another former executive. One of Huang’s own missteps came in 2020 when he agreed to pay $40bn for the British microchip company Arm. After almost two years, regulators kiboshed the deal, a fact Huang still laments.

NVIDIA's founder and CEO Jensen Huang speaking to the press at a night market in Taipei
Jensen Huang appears to be on a victory lap of sorts as the valuation of his company continues to skyrocket - STR/CNA/AFP via Getty Images

Matching his standards can be exerting. Huang is known to wake as early as 4am (“As a CEO, not sleeping is a good choice,” he once said). Huang told Wired magazine this year that his exercise regime largely consists of squats while brushing his teeth.

“Greatness comes from character. And character isn’t formed out of smart people, it’s formed out of people who suffered,” Huang told students at Stanford University earlier this year, adding: “I use the phrase ‘pain and suffering’ inside our company with great glee.”

Huang’s commitment to pain concluded in him getting a tattoo of Nvidia’s logo when the company’s share price hit $100 in 2014, the pain of which made him cry. He has attributed his resilience to being sent away to boarding school in Kentucky as a nine-year-old, where he was subjected to relentless racist bullying.

Most of Nvidia’s employees today would say that any suffering has been worth it. The company’s 3,500pc stock price rise in the last five years means that even staff with relatively short careers at the company have enough paper wealth to retire. One mid-level employee who worked for the company for 18 years recently left with a $62m nest egg.

Huang himself is not prone to outrageous displays of wealth, beyond the $9,000 leather jackets – at least by the standard of most tech billionaires. He has spent around $55m on property including the Hawaii retreat but is said to drive a Tesla to work despite owning a collection of Ferraris.

Some caution may be warranted. Nvidia overtaking Microsoft and Apple in value has been seen as the crest of a new dotcom bubble.

Its profits, while growing strongly, are less than half of Apple’s, and are built on runaway spending on AI infrastructure that has yet to yield tangible profits for many of its customers. The company’s ascent has drawn parallels with Cisco, the networking equipment company that overtook Microsoft during the dotcom bubble but never recovered.

Most of Wall Street believes the only way is up, however. Sam Altman, the chief executive of OpenAI, has suggested building an artificial superintelligence that can outsmart humans will cost some $7 trillion. A substantial portion of that would be likely to end up with Nvidia.

Last week some analysts predicted a valuation of $5 trillion within a year, a level that would see Huang’s own net worth overtake Bill Gates’ and see him competing for the title of world’s richest man. Then it really would be time to party.