The Nvidia Way: Jensen Huang and the Making of a Tech Giant

by Tae Kim

I FOUND THIS TO BE A pervasive attitude within Nvidia: that the culture of the place discourages looking back, whether at errors or successes, in favor of focusing on the future—the blank whiteboard of opportunity.

This culture combines unusual independence for each employee with the highest possible standards; it encourages maximum speed while demanding maximum quality; it allows Jensen to act as strategist and enforcer with a direct line of sight to everyone and everything at the company. Above all, it demands an almost superhuman level of effort and mental resilience from everyone. It’s not just that working at Nvidia is intense, though it certainly is; it’s that Jensen’s management style is unlike anything else in corporate America.

Jensen runs the company in the way he does because he believes that Nvidia’s worst enemy is not the competition, but itself—more specifically, the complacency that grips any successful company, particularly one with a long and impressive track record such as Nvidia.

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“Over the years, I realized what was happening, how people protect their turf and they protect their ideas. I created a much flatter organization,” Jensen said. His antidote to the backstabbing, to the gaming of metrics, and to political infighting is public accountability and, if needed, public embarrassment. “If we have leaders who are not fighting for other people to be successful and [who are] depriving opportunities to others, I’ll just say it out loud,” he said. “I’ve got no trouble calling people out. You do that once or twice, nobody’s going to go near that again.”

In a sense, that is the Nvidia Way in its purest form. It is the unwavering belief that there is tremendous reward in doing your job the best you can. It is the drive to persevere amid adversity. Or, as Jensen put it when looking directly into my eyes: the secret to his company’s success is nothing more than “sheer will.”

He believed that Denny’s equipped him with a number of significant life skills, including how to navigate chaos, work under time pressure, communicate with customers, and handle mistakes (in this case, from the kitchen). It also taught him to find satisfaction in the quality of his work, no matter how minor the task, and to fulfill each according to the highest possible standards.

“I was the youngest kid in the class. I was tiny. I was skinny. But I had a great pickup line,” Jensen said, who by this point had grown out of his awkward phase and had sharpened his social skills. “Do you want to see my homework?”

He next interviewed with two companies based in California. The first was Advanced Micro Devices, or AMD, a company that Jensen had idolized ever since he saw a poster of one of their microprocessors at Oregon State.

“I can be impatient about certain things, but infinitely patient about others. I plug away.”

“People with very high expectations have very low resilience. Unfortunately, resilience matters in success,” he later said. “Greatness is not intelligence. Greatness comes from character.”17 And character, in his view, can only be the result of overcoming setbacks and adversity. To Jensen, the struggle to persevere in the face of bad, and often overwhelming, odds is simply what work is. It is why, whenever someone asks him for advice on how to achieve success, his answer has been consistent over the years: “I wish upon you ample doses of pain and suffering.”

Already, he was learning to embrace conflict rather than shy away from it—a lesson that would eventually come to define his philosophy at Nvidia.

Malachowsky and Priem asked Jensen Huang for help writing a contract to work with Samsung. The three started meeting to devise a business strategy to deal with the Korean company. Then one day Jensen said, “Why are we doing this for them?”

In late 1992, Priem, Malachowsky, and Jensen met frequently at a Denny’s at the corner of Capitol and Berryessa in East San Jose to figure out how to turn their idea into a business plan. “We’d show up, we’d order one bottomless cup of coffee. And then, you know, work for four hours,” Malachowsky said.1

Most of the other possibilities on Priem’s list incorporated “NV” as a reference to their first planned chip design. These names included iNVention, eNVironment, and iNVision—the kinds of everyday words that other companies had already co-opted for their own brands, such as a toilet paper company that had trademarked the name “Envision” for its environmentally sustainable product line. Another name was too similar to the brand of a computer-controlled toilet. “These names were all stinky,” Priem said. The last remaining option was “Invidia,” which Priem found by looking up the Latin word for envy—in a sense, another callback to their work on the GX, when he and Malachowsky believed that their rivals, both within and beyond Sun, had envied their success. “We dropped the ‘I’ and went with NVidia to honor the NV1 chip we were developing,” said Priem, “and secretly hoped that someday Nvidia would be something that would be envied.”

Jensen’s decision to ease his way out of LSI Logic turned out to pay immediate dividends during Nvidia’s fund-raising process. When he submitted his resignation, his manager had immediately taken him to LSI’s CEO, Wilfred Corrigan, a British engineer who pioneered several semiconductor manufacturing processes and design principles that are still in use today. Jensen’s manager wanted “Wilf,” as he was known throughout the company, to talk the young engineer out of leaving LSI altogether. But when Corrigan heard about Jensen’s vision for a new generation of graphics chips, he asked him a question: “Can I invest?”

Sequoia met with Nvidia’s cofounders two more times in mid-June. At the last meeting, they decided to invest. “Wilf says to give you money. Against my better judgment, based on what you just told me, I’m going to give you money. But if you lose my money, I will kill you,” Valentine told the Nvidia team.

It was a humbling moment for Jensen, Priem, and Malachowsky: they had succeeded on the strength of their reputation, not their business plan or their demo. It was a lesson Jensen would never forget. “Your reputation will precede you even if your business plan writing skills are inadequate,” he said.

In his search for answers to Jones’s question, he gravitated to the book Positioning: The Battle for Your Mind by Al Ries and Jack Trout. In it, Ries and Trout argue that positioning is not about the product itself but rather about the mind of the customer, which is shaped by prior knowledge and experience.

According to the two authors, potential buyers didn’t want to be persuaded. They wanted to be seduced.

Knowingly or not, 3dfx followed the exact principles laid down by Al Ries and Jack Trout in Positioning. The company pitched its product as a clear alternative to the other cards in the marketplace and appealed to its customers’ emotions—the feeling of “beating the system” by getting outsized performance at a great price—rather than try to convince them with facts and performance statistics.

“The mistake that we made at 3dfx is we should have killed them when they were down,” said Ross Smith. “That was a huge tactical error on our part, not buying them. We had them on the ropes.”

One engineer recalled that the team attempted to run a longer benchmark over a weekend. Somehow, an overnight cleaning crew gained access to the testing lab and unplugged the emulator in order to plug in a vacuum cleaner. The engineers returned to find their benchmark test completely ruined; they would have to run it again from the start, which cost time. The cleaning crew didn’t even need to be in there, as the lab did not have a carpet.

Landry mentioned to Jensen that some employees were griping about the long work hours. His response was typically direct. “People who train for the Olympics grumble about training early in the morning, too.”

In Nvidia’s early years, even the longer-tenured employees could never feel totally secure because the company had adopted an “up or out” approach, with people either getting promoted on a regular cadence or getting pushed out to make room for someone with greater potential. The company handled personnel in the same uncompromising way that it approached chip design.

SINCE NVIDIA’S FOUNDING, JENSEN HAS insisted that all Nvidia employees work at the “Speed of Light.”3 He wants their work to be constrained only by the laws of physics—not by internal politics or financial concerns. Each project must be broken down into its component tasks, and each task must have a target time-to-completion that assumes no delays, queues, or downtime. This sets the theoretical maximum: the “Speed of Light” that it is physically impossible to exceed.

As he saw it, he needed to prevent the kind of internal rot that he observed at other companies, where employees often manipulated their projects to provide steady and sustainable growth that would advance their individual careers, when in reality they were making only incremental improvements that actually hurt the company in the long term. The “Speed of Light” notion ensured that Nvidia would never tolerate such sandbagging.

“I used to tell people at AMD, Intel, or anywhere else that if they wanted to see how Nvidia was doing, they should visit the company’s parking lot on weekends. It was always busy,” said Ribar.

As the day went on, no place in Nvidia headquarters was safe from a drive-by grilling from Jensen. Kenneth Hurley, a technical marketing engineer, was at a urinal when Jensen walked up to the one next to him. “I’m not the kind of guy who likes to talk in the bathroom,” Hurley said.9 Jensen had other ideas. “Hey, what’s up?” he asked. Hurley replied with a noncommittal “not much,” which earned him a sidelong glance from the CEO. Hurley panicked, thinking, “I’m going to get fired because he thinks I’m not doing anything. He’s probably wondering what I’m doing at Nvidia.” To save face, Hurley proceeded to list twenty things he was working on, from convincing developers to buy Nvidia’s latest graphics card to teaching those developers how to program new features on them. “Okay,” Jensen replied, apparently satisfied with the engineer’s answer.

FEAR AND ANXIETY BECAME JENSEN’S favorite motivational tools. At each monthly company meeting, he would say, “We’re thirty days from going out of business.”

TD always an average campaign length away from going out of business

“Make no mistake. Intel is out to get us and put us out of business,” Jensen declared at an all-company meeting. “They have told their employees, and they have internalized this. They are going to put us out of business. Our job is to go kill them before they put us out of business. We need to go kill Intel.”

“Oh my God, we got here and we thought there was going to be a secret sauce,” one engineer said.3 “It turns out it’s just really hard work and intense execution on schedules.” It was Nvidia’s culture, in other words, that made the difference.

During an off-site management meeting, they discussed what each of them would do if the company’s stock price ever hit $100 a share. (The share price was $25 at the time.) Head of marketing Dan Vivoli pledged to get a tattoo of the Nvidia logo on his leg. Head of sales Jeff Fisher would get one on his butt cheek. Chief Scientist David Kirk agreed to paint his nails green, and head of human resources John McSorley signed himself up to get a nipple pierced. Two of the three cofounders went even bigger: Chris Malachowsky would get a mohawk, and Curtis Priem would shave his head and get a tattoo of the Nvidia logo on his scalp. Jensen agreed to have his left ear pierced.

One of Baltuch’s younger colleagues, Keita Kitahama, was a recent college graduate who had been hired to ensure Nvidia graphics cards worked well with major monitor vendors. Kitahama was naturally shy and didn’t know much about the business development process. One day, while Baltuch was drinking his daily cup of tea, Kitahama approached him and asked, “What’s the best way to do this?” Baltuch replied, “You have the industry’s hottest commodity. Use it.” He was referring to Nvidia’s latest graphics cards, called the GeForce. He instructed Kitahama to talk to another product manager, Geoff Ballew, and scour Nvidia’s headquarters for as many spare GeForce cards as he could find. Then, he was to “call up every single monitor company and tell them you want to visit them and give them a free GeForce card.” To Kitahama’s surprise, the tactic worked. Monitor manufacturers not only took his call—they responded eagerly to his offer. They wanted early access to the company’s newest products, no matter how they got them.

It may have been the first time that the company engaged in significant marketing embellishment for a major launch—and it worked. Vivoli made the decision not to trademark “GPU” because he wanted other companies to use the term, the idea being that Nvidia had pioneered an entirely new category. Hyperbole would become reality: the GPU moniker became an industry standard and helped Nvidia sell hundreds of millions of cards in the ensuing decades.

Jobs ended the meeting after about twenty minutes to head to another. As he prepared to leave, he had some parting advice for the Nvidia team. “You guys have really got to do some work on mobile because ATI is kicking your ass in laptops,” he said, referring to Nvidia’s main rival after the demise of 3dfx. Without hesitating, Diskin responded, “Actually, Steve, I think you’re wrong.” The room went quiet. Jobs fixed Diskin with his intense stare and said, “Tell me why?” Diskin got the sense that not many people challenged Steve Jobs, and it was clear he expected a good answer. Diskin had one. He explained that Nvidia’s chips did indeed consume more power—indeed, more power than most laptops could muster—because they offered the higher performance that desktop users required. But their performance and power consumption could easily be lowered to meet laptop specs. In fact, Diskin argued, if Nvidia lowered the clock speed of its chips down to match the speed—and therefore power requirements—of ATI’s chips, Nvidia’s chips would actually offer better overall performance. It wasn’t that ATI was kicking Nvidia’s ass in laptops, as Jobs had thought. It was just that Nvidia had not needed to create a chip specifically for a lower-power laptop model, when a throttled-down version of its flagship line would do the job just fine. “We have more headroom,” Diskin said, summarizing his main argument. Jobs stared at him one more time. “Okay,” was all he said. The meeting was over. Thirty ...

JENSEN REFLECTED ON THE NV30’S failures. Ultimately, it was his responsibility to ensure that Nvidia’s teams collaborated effectively, no matter how large the company got.

one of Christensen’s subtler messages escaped Jensen, at least for the first decade of Nvidia’s existence. It was not enough to look at external measures of success: revenue, profitability, the price of the stock, or the pace of product launches. A truly sustainable business spent just as much effort looking inward in order to keep its internal culture aligned. As Nvidia established itself as the dominant player in the graphics industry, the company’s executives got distracted by its partners, its investors, and its finances. It failed to see the growing problem within its own walls—complacency. And was almost destroyed because of it.

To do so, they utilized the GeForce 3’s programmable shader technology, originally designed to paint colors for pixels, to perform matrix multiplication. This function combines two matrices (basically, tables of numbers) to create a new matrix through a series of mathematical calculations. When the matrices are small, it’s easy enough to perform matrix multiplication by use of normal computational methods. As matrices get larger, the computational complexity required to multiply them together increases cubically—but so does their ability to explain real-world problems in fields as diverse as physics, chemistry, and engineering.

“Really the modern GPU, we kind of stumbled onto,” said Nvidia scientist David Kirk.1 “We built a super powerful and super flexible giant computation engine to do graphics because graphics is hard.

Sufficiently dedicated programmers such as Harris learned how to “translate” their real-world problems into functions that these languages could execute, and they soon figured out how to use GPUs to make progress in understanding protein folding, determining stock-options pricing, and assembling diagnostic images from MRI scans.

It would not be easy to match Jensen’s vision with market reality. Nvidia had the product and production problems solved, but now Jensen asked his team to figure out ways to create a market for CUDA—to “solve the entire problem,” as he put it. This would require a systematic analysis of the needs of every industry, from entertainment to health care to energy, and to not only analyze potential demand but also figure out how to unleash it via special, GPU-centered applications in each field. If developers didn’t yet know what to do with CUDA, Nvidia would teach them.

Students could outfit a PC with a few Nvidia gaming GeForce cards and have an enormously powerful machine at a reasonable price. “You could buy a $100 CPU and four $500 GeForce cards and have a workstation that was as powerful as a full rack of servers. It was a game changer.”

The HP executives asked whether Nvidia would give HP unlimited indemnification against lawsuits if something went wrong—basically asking Nvidia to assume all the legal risk if faulty GPUs caused a failure of HP’s servers. This was a surprise to Moore, who didn’t know the HP executives would start a legal negotiation. He was glad to have Jensen present at the meeting to reply to the unexpected question. Jensen pointed out the problem with unlimited liability. The graphics chip is a small part of the server, so Nvidia could not indemnify the full value of the server. Doing so would entail a massive and unreasonable financial risk. Instead, he proposed that Nvidia tie indemnity to something more concrete: the amount of annual business the server group did with his company. If HP spent $10 million per year on cards, Nvidia would indemnify them for up to $10 million in the event of component failures. The protection would grow as the business grew. The HP executives accepted the deal on the spot, and Moore walked out of the meeting pleased with the outcome. Afterward, he went to Jensen. “Thank you for coming to the meeting. I really appreciated it,” Moore said. Jensen, however, saw the meeting differently. “It ended well, but Derik, let me tell you your failure here.” The remark shocked Moore. “It scared the crap out of me,” he recalled. “The failure here was you did not tell us what the company was going to ask in advance,” Jensen said. “Nobody likes surprises. Don’t ever let ...

Jensen referred to his sellers as Nvidia’s Green Berets. He needed them to be self-sufficient and aggressive. Moore had failed to match Jensen’s expectation for the role—that each seller become the “CEO of your accounts.” When they met with their customers, they needed to know more about those customers’ businesses than the customers themselves do. They had to anticipate how much customers were willing to pay for Nvidia’s superior products. Jensen, for his part, would provide them with whatever resources were necessary: the “reinforcements” behind the elite vanguard.

All this came at a premium for customers. The company never discounted its chips, not even to match its competitors’ pricing, unless it got something in return—a sticker on a partner’s computer, a logo on a boot-up splash screen.

He had always tried to give direct feedback to his employees as much as possible when the company was small, in order to consistently reinforce his principles and ensure everyone had a clear idea what was expected of them. But in the new, larger Nvidia, he found that it was difficult to reach all the employees on a consistent basis. Jensen decided to offer Nvidia employees more direct criticism in larger meetings, so that more people could learn from a single mistake. “I do it right there. I give you feedback in front of everybody,” he said. “Feedback is learning. For what reason are you the only person who should learn this? You created the conditions because of some mistake you made or silliness that you brought upon yourself. We should all learn from that opportunity.”

One well-known example occurred when Nvidia was making one of its first plays in the mobile phone and tablet market, with the Tegra 3 chip. At a company all-hands meeting in 2011, Jensen asked the cameraman to repeatedly zoom in on the project manager of Tegra 3, a man named Mike Rayfield, as Jensen gave him feedback. While everyone in the audience got a good look at Rayfield’s face, Jensen launched into him. “Mike,” he said, “you need to get Tegra done. You got to tape Tegra out. Guys, this is an example of how not to run a business.” “It was the most embarrassing, humiliating thing I’ve ever seen,” another former Nvidia employee said. When asked about the incident, Rayfield later said in an e-mail, “That was not the only ass kicking I got [from Jensen],” with a smiley face at the end of his comment. Less than a year after the Tegra chip came out—nearly eight months behind schedule—he left Nvidia. He wasn’t pushed out; he resigned voluntarily.

“I don’t like giving up on people,” he said. “I’d rather torture them into greatness.” The method is not intended as a means to show off how much smarter he is than his employees. Instead, he sees it as a guard against complacency. Jensen’s time, and the time of his employees, is best spent trying to solve the next problem. Praise is a distraction. And the deadliest sin of all is looking back at your past accomplishments as if they will protect you from future threats.

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“It’s okay to be proud, but the most important thing is trying to improve.”

“I’ll never forget this. We had done fantastic. We just blew the doors off the quarter. Then, during our quarterly review meeting, Jensen stood up in front of us.”3 The first words out of Jensen’s mouth were, “I look in the mirror every morning and say, ‘you suck.’ ”