Inside Nvidia, the tech titan whose shares have soared 3,000% in five years. So can it still make YOU money?

It’s the stock market success story of the century – and one that will shape the rest of our lives. Since going public on the eve of the millennium, computer chip designer Nvidia has come from nowhere to become the world’s largest company.

In February, Nvidia became the fastest company ever to go from a stock market valuation of $1 trillion to $2 trillion.

Amazingly, it only lasted eight months.

Jensen Huang in his signature leather jacket shows off the new Blackwell chips, which will cost more than $30,000 each

The company – whose chips have fueled the rapid rise of artificial intelligence (AI) – is now worth more than the entire FTSE 100 after its share price rose from $34 in June 2019 to $1,090 today. That is a remarkable increase of 3,000 percent in five years.

With a market value of £2.2 trillion, it is set to overtake Apple as the world’s second most valuable company in no time, behind tech giant Microsoft, which is itself worth £2.5 trillion.

So how did a startup with no business plan, founded in a California restaurant, win it all? And can UK private investors get a piece of the action?

Nvidia is the brainchild of Jensen Huang – a Taiwan-born electrical engineering graduate whose parents sent him to the US as a child – and two microchip designers, Chris Malachowsky and Curtis Priem.

They founded Nvidia in 1993 in a Denny’s restaurant in San Jose, in the heart of Silicon Valley.

The plan was to call their company NVision – until they discovered that name came from a toilet paper manufacturer. Huang — who once worked as a waiter and dishwasher at a Denny’s outlet making $2.65 an hour — instead suggested Nvidia, based on the Latin word invidia meaning “envy.”

Nvidia is the brainchild of Jensen Huang – a Taiwan-born electrical engineering graduate – and two microchip designers, Chris Malachowsky (pictured) and Curtis Priem

Since then he has run the company, making him one of the richest people in the world.

Nvidia’s main product is a graphics processing unit (GPU), a wafer-thin circuit board with a powerful microchip at its core. These processors allow lightweight, energy-efficient personal computers and laptops to perform a large number of calculations at high speed.

For decades, Intel was the major microchip maker. Nvidia differs from its rival in a number of important ways.

Intel and others make industry-standard general-purpose chips, known as “central processing units” (CPU), that handle all the main functions of a computer and produce one mathematical calculation at a time.

But Nvidia’s GPU can complete complex and repetitive tasks much faster, breaking them down into smaller components before processing them in parallel.

If CPUs are delivery vans delivering one package at a time, Nvidia’s GPUs are more like a fleet of high-speed motorcycles spreading through a city. That made them the perfect processors to power the dawning AI revolution.

Nvidia is now worth more than the entire FTSE 100 after its share price rose from $34 in June 2019 to $1,090 today

Unlike Intel, Nvidia does not make its own chips – they are mainly outsourced to the Taiwan Semiconductor Manufacturing Company. Crucially, Nvidia not only designs the hardware – the chips – but also the software on which they run.

“What Nvidia does for a living is not building the chip – we build the entire supercomputer, from the chip to the system, to the interconnects, the NVLinks, the networks, but very importantly the software,” says Huang, 61 .

This secret sauce software package is called Cuda. Nvidia’s chips were originally intended to improve computer graphics used by video gamers. The creation of Cuda in 2006 also allowed other universal applications to run on Nvidia chips.

Initially, AI was not one of them. In the early 2010s, AI was still a technological backwater where progress in areas such as speech and image recognition was slow.

Even less fashionable were ‘neural networks’: computer structures that mimic the functioning of the human brain.

Nvidia’s breakthrough came when the Cuda platform was championed by British-Canadian computer scientist and cognitive psychologist Geoffrey Hinton, dubbed the “godfather of AI.”

Two of his students trained a neural network to identify videos of cats using just two Nvidia boards. Google experts needed 16,000 CPUs to perform this feat. Machine learning had arrived.

The stunning results prompted Huang to go all-in on AI in 2013.

Nvidia’s GPUs were soon found in everything from smart cars to robotics and data centers, with customers ranging from Tesla to Microsoft and Amazon. One setback was a failed £31 billion bid to buy Cambridge-based chip designer Arm Holdings.

But Nvidia really came of age a year ago with the news that ChatGPT – Open AI’s chatbot – was powered by its supercomputers. This sent the stock into orbit.

The news sparked a frenzy among major tech companies and AI startups for Nvidia’s processors, leading to shortages that could last into next year.

On May 23, stellar results that exceeded market expectations increased the company’s value by $200 billion in just one day.

To meet the insatiable demand, Nvidia plans to launch a new generation of AI chips — codenamed Blackwell — later this year, each costing more than $30,000.

It can charge so much because of its stranglehold on the AI ​​chip market, with a market share of more than 80 percent.

This near-monopoly has turned Nvidia into a huge money machine, potentially fueling massive future share price gains.