Why is Nvidia Invincible in the AI Era?
How a Gamer’s Best Friend Changed the World
You hear “Nvidia” in AI news every day. But do you know who they are? 🤔 The truth is, they started as a company that fired up the hearts of gamers. In this article, we’ll unravel the secrets of how Nvidia became the king of the AI era, in a way that’s fun and easy for anyone to understand!
🚀 Let’s Start with the Conclusion! Nvidia’s 3 Secrets to Success
For those in a hurry, we’ve summarized the key points of this article on three cards. Hover over or tap them to flip them over. You’ll see the core reasons why Nvidia is so incredibly dominant.
Secret to Success #1
A “Miraculous Match” of Technology
Technology Honed for Gaming
The tech they perfected for rendering realistic 3D graphics at high speeds just happened to be a perfect fit for the massive calculations required by AI!
Secret to Success #2
The Ultimate Weapon: “CUDA”
An Invisible “Moat”
It’s not just hardware. By providing software that developers love, CUDA, they’ve built a powerful ecosystem that competitors can’t easily copy.
Secret to Success #3
The “Whole System” Strategy
Graduating from Parts Supplier
They no longer just sell chips; they sell entire “AI factories” equipped with everything needed for AI development, leaving rivals far behind.
📖 Nvidia’s Story Began at a Denny’s
It might be hard to believe, but the story of this tech empire began in 1993, in a booth at an American diner chain, Denny’s. Three young men, discussing the future over coffee, made a huge bet that would later change the world.
1993: The Legend Begins 🍽️
Jensen Huang and his co-founders started Nvidia, believing in the future of video games. They reportedly had only $40,000 in capital.
1999: The Birth of the “GPU” ✨
They released the “GeForce 256” and, for the first time, called it a “GPU.” This wasn’t just a product name; it was a powerful statement of their intent to define the market themselves. This move helped them win the graphics card wars.
2006: A Play for the Future, “CUDA” 🤖
They released CUDA, the software that would become the key to the AI revolution. The AI boom hadn’t arrived yet, but this forward-thinking investment would later cement Nvidia’s unshakeable position.
2012: The AI Revolution Begins 💥
“AlexNet,” a model using Nvidia GPUs, won an image recognition contest by a landslide. It was a historic moment when researchers worldwide realized, “GPUs are essential for AI!” From here, Nvidia’s incredible advance began.
🧠 CPU vs. GPU – Why Does AI Choose the GPU?
Computers have two types of brains: the “CPU” and the “GPU.” These two are good at completely different things. You could say a CPU is like a “brilliant master chef 👨🍳” who can do anything but works best alone, while a GPU is like “an army of specialized cooks 👩🍳👩🍳👩🍳” who tackle the same task all at once. AI training absolutely requires the power of this army of specialists. Let’s see the difference in the diagram below!
How a CPU Works (Sequential Processing)
It processes complex tasks accurately, one by one, in order.
How a GPU Works (Parallel Processing)
It processes thousands of simple tasks simultaneously with its many cores.
Process
AI training, especially deep learning, is a repetitive process of massive “matrix operations.” Each calculation is simple, but the number of them is astronomical. This is exactly the kind of job a GPU excels at: “handling simple tasks in massive parallel.” It’s the same principle as calculating each pixel on a game screen one by one!
🏰 What is Nvidia’s Ultimate Weapon, “CUDA”?
Nvidia’s true strength doesn’t just come from its chips. It’s the software, “CUDA”, that acts as a huge, powerful “moat around their castle,” something competitors just can’t replicate. Let’s join a beginner, Alex, in the chat below to understand what makes CUDA so amazing!
📈 The Numbers Tell the Story! From Gaming to AI Powerhouse
The AI boom has fundamentally transformed Nvidia as a company. Let’s look at this dramatic shift in the stacked bar chart below. You can see how the green section, the Data Center business, has expanded rapidly.
Past Revenue Mix (FY24 Q4)
Present Revenue Mix (FY25 Q4)
*FY24 Q4 is the quarter ending Jan 2024, and FY25 Q4 is the quarter ending Jan 2025.
⚔️ Does the Seemingly Invincible Nvidia Have Any Rivals?
Yes, of course! Various companies are challenging Nvidia for a piece of the enormous AI chip market pie. We’ve summarized the main rivals in the table below. Hover over the rows to highlight them!
| Challenger | Key Product | Strategy Points |
|---|---|---|
| AMD 🔴 | Instinct MI300 Series | Competing on performance and cost-effectiveness. They are trying to break down the CUDA fortress with their open-source software, “ROCm.” |
| Intel 🔵 | Gaudi Series | Their selling point is ease of use and lower cost, as it can be used with standard networking technology (Ethernet). |
| Big Tech ☁️ (Hyperscalers) |
Google TPU, AWS Trainium, etc. | Ironically, they are also Nvidia’s biggest customers. They are developing their own custom chips optimized for their services to cut costs and reduce dependence on Nvidia. |
But in reality…?
Even with all these rivals, as of 2024, Nvidia’s share of the AI data center GPU market is a staggering ~92%! It seems Nvidia’s fortress remains as strong as ever.
🎉 Conclusion: Reaffirming Nvidia’s Strength!
Thank you for reading this far! Do you have a better grasp of the secrets to Nvidia’s strength now? Finally, let’s review what we’ve learned with a quick quiz. Just click on the answer you think is correct.
[Q1] What is the name of the semiconductor developed by Nvidia that dramatically sped up AI calculations?
[Q2] What is the name of the software that is Nvidia’s “real strength” beyond its hardware, and which poses a high barrier for its competitors?
Today’s Takeaway
Nvidia’s journey is a grand Cinderella story where “technology that thrilled gamers blossomed in the completely new field of AI.” It wasn’t just a lucky break; visionary strategies like CUDA and a relentless drive to innovate are what made Nvidia the king of the AI era. Next time you see news about AI, it might be more interesting to imagine what moves Nvidia is making behind the scenes!
