December 11, 2024 • 19 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Tae Kim, Senior Technology Writer for Barron’s, discusses his book The Nvidia Way: Jensen Huang and the Making of a Tech Giant.
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
You're listening to Bloomberg Business Week with Carol Messer and
Tim Stenebek on Bloomberg Radio. Well, there's perhaps no name
that's more associated with the AI euphoria we've seen over
the last couple of years than in video. Shares up
about nine hundred percent since the start of last year,
and according to our next guest, it's the best performing
US stock in history. Take him his senior technology writer
(00:29):
for Barons. He's a former columnist for Bloomberg Opinion. He's back.
He's got a new book out today. It's called The
Nvidio Way, Jensen Wong and the Making of a Tech Giant.
Tay joins us here in the Bloomberg Interactive Brokers Studio. Hey, welcome,
Thanks Tim, It's so great to be here.
Speaker 1 (00:44):
Thanks Carol.
Speaker 2 (00:45):
Yeah, congrats on the book. So if you I mean,
I remember when I was a teenager walking by a
computer and it had like had a Nvidia logo on it,
Like I think it was like a sticker because this
person was a gamer. Then it went like I went
like decades without hearing about in video until the crypto
boom in like twenty sixteen or so, if you weren't
(01:08):
a gamer or a tech analyst in video might not
have been on your radar until the last couple of years.
I went back and looked at market cap. It was
like a shy of a twenty billion dollar company until
around twenty sixteen, it's three point three trillion dollars. Now,
when did Nvidio get on your radar?
Speaker 1 (01:23):
Well, I was there from the band because I was
addicted to computer games and video games so ever since
it started in nineteen ninety three, I'd say about starting
nineteen ninety eight, they started to make the best piece
that's around.
Speaker 2 (01:35):
When they went public too.
Speaker 1 (01:36):
They were in publicly nineteen ninety nine nine. What really
changed was there's this game called Quake, written by John Carmack.
He's probably the most famous video game programmer of all time.
He also programmed Doom right before that. So these two
generational games kind of exploded the PC computer gaming market.
Three DFCTS, which is actually the leading three D graphics
(01:58):
chip company before in video. When Quake came out, the
revenue went from like four million to two hundred million
a year and a half. So that really created the market.
This game called Quake by John Carmack, and I think
almost every computer video game person knows this game in
the nineteen nineties, So.
Speaker 3 (02:16):
How did they get to be the company that we
talk about NonStop today? And I'm looking at a chart
going back to nineteen ninety. For a long time, it
kind of moved along and didn't do much, and then
you go to kind of late in twenty twenty two,
and then it just took off.
Speaker 1 (02:31):
Well, I mean, it was still a great company in
the first ten to fifteen years. I think it was
the fastest growing company to get a billion dollar run rate.
It'd be Broadcom in the first ten to fifteen years.
So this is a very fast growing, strong company. I mean,
it's just on a different level now where it's right
behind Apple. But it was the most voluble company for
(02:52):
a big part of this year. So it all started
with the three D graphics and then program Mobile GPUs Kuda,
and now with the tensor cores and AI chips. And
Jensen Huang, who's the co founder and CEO, every single
major computer shift in computer chips and three graphics, he's
(03:12):
learned to position in VideA to take advantage of it.
I compare him in the book to read Hastings. With Netflix,
Hastings had this intuitive sense as someday we're just gonna
watch video over the Internet. But the technology wasn't ready yet,
so he started the DVB by rental business and just
stayed around and invested in the technologies. And when you know,
(03:34):
the internet infrastructure with broadband got good enough for consumers
and the video streaming technology was there, he jumped on
it and was the first mover and dominated that market.
Jensen and Vidia did that like with three four different markets.
Like every single time he positions the company, he doesn't
know exactly when it's going to take off, like maybe
it's five years from now, maybe it's seven years from now.
(03:55):
But he positions the company invests tremendous amount of capital
and R and D, and this the software ecosystem is
actually huge competitive avantage that.
Speaker 2 (04:03):
He Well, let's talk about him as a leader, him
as a visionary. What did you you spend some time
with him during the writing of this book, you interviewed
him earlier this year. What would you say it is
about his personality, his leadership style, the way he conducts
himself that has created this culture ad in video that
has allowed it allowed it to not just succeed, but dominate.
Speaker 1 (04:26):
I would say there are three pillars, and the n
Video way is basically the Gensen way, because I mean
he's there from the beginning and create this.
Speaker 2 (04:33):
Remember there's a Netflix way too, Oh.
Speaker 1 (04:35):
Well, but this is like this is Jenson's way. I
would say three pillars are insane, work ethic, talent, cultivation,
and speed and velocity. So I'll just talk through each
three work ethic. No one works harder than Jensen. I
mean he is reading one hundred emails from his employees
every day. He works all week. Maybe Elon Musk is
(04:59):
up there. Sorry, but I'd even argue compared to you,
maybe Jensen works more. Like he says he can't he
when he goes to the movie theater, he can't remember
the movie because he's constantly thinking about work all day.
He like lives and breathes work, and work is relaxing.
Like he drinks a Highland Parks scotch Lan at night
and Sunday and he's going through emails and like peppering
(05:20):
his employees do this, do that, and that's his life.
So even at the beginning, like I have these stories
when I talk to these early employees, like they're working
past midnight, waking up at four or five in the morning. Yeah,
and this is a time when Intel was about to
crush them. And I had this one employee telling me, well,
Jensen just inspired me to work even harder. So even
(05:41):
though like I should go back to bed, and I
really want to go back to bed, I'm going to
get to work early and work even harder. So work ethic,
no one, No one's going to be Gensen tumtr Worth.
He just he just he's a workaholic and will out
work anymore. In terms of talent cultivation, cultivation, he knows
that the only way you win in this in technology
(06:03):
is hiring the best people. So he's constantly recruiting, you know,
he's every time he interviews or talks to someone, he goes,
who have you worked with in the past that were
rock stars? And he pockets that knowledge and then three
years later he's like recruiting that person, constantly badgering them
and sometimes they say no. In the beginning, it's like no, no, no,
I don't want to leave my cozy company. But he
(06:24):
usually gets the people and then they stay for twenty
five thirty years and The reason is partly in video
wins and everyone wants to stay on the winning team.
But second, it's just there's this great culture inside video
that even though there's thirty thousand people. I write a
lot about this in the book. I think large parts
(06:45):
of corporate America and technology industry suffer from dysfunction, from
internal politics where you're spending half your day trying to
please your boss's boss instead of doing what's right for
the customer and for the company itself. And video costs
this mission. As the boss, make sure you're making decisions
where you're fulfilling the company's mission, not you know, all
(07:08):
the Game of Thrones type internal in fighting. The other
part of the other big part is when I talk
to them video boys that leave in video, they can't
adjust to the new companies when they go to Google, Microsoft, Apple,
because because there is so much endless meetings, internal paralysis.
Like one person says, it's like swimming through quicksand and
(07:29):
I think.
Speaker 2 (07:29):
They should just retire and count their money.
Speaker 1 (07:32):
Yeah.
Speaker 3 (07:32):
Yeah, but a lot didn't just need to talk about
we talk about company culture. We work with a company
that's got a very distinct culture as well, But it
makes me think and video. Wasn't just oh, we were
at the right place at the right time. He it
sounds like has been constantly checking where does this market go?
Because if you think about the timing of a like
(07:54):
just how it all happened, This wasn't just accidental. Wow,
I got it right.
Speaker 1 (07:58):
No, not at all. I mean he was investing Kuda,
which is the reason why in Vidia is kind of
doing really well in AI, the ecosystem Kuda. He invested
that in two thousand and six, and then when deep
learning took off in twenty thirteen. Yeah, he was like,
we need to invest in AI software libraries, and we
need to go to campuses and e spread the religion
(08:18):
of Kuda.
Speaker 2 (08:19):
Explain what Kuda is.
Speaker 1 (08:20):
Kuda is a programming platform for parallel computing, which is
what Nvidia GPUs do. So basically in videas they call
it accelerate computing, but it's basically just parallel computing where
each GPU has thousands of tiny little processors, and most
computer PCs run on CPUs which have four to eight
(08:42):
processors normally, So in Vidia's kind of computing architecture is
based on this parallel you know, tiny processor mentality and
Jensen from the beginning, even in nineteen ninety three, saw
this as the future of computing, like you're going to
break apart all the work into tiny little processes and
(09:02):
they're going to work on GPUs. And he saw that
from the beginning that this is the way the world
of computing is going to go. So when AI took
off in the.
Speaker 3 (09:11):
Video was sixteen years.
Speaker 1 (09:13):
So that's amazing, Like, how.
Speaker 3 (09:15):
Does you kind of keep going keep going.
Speaker 1 (09:18):
Because he wrote, like like I said about Netflix, he
knows where the future is going to go. Yeah, and
he will keep in that. I mean. The amazing thing
about Kuda is all these I talked about. I have
a chapter in the book about Starboard Value, which is
a very famous activist hed. Yeah, they were board members
and Video were worried when Starboard took a big position
that they were going to, you know, clamp down on
Kuda because Wall Street was all over Jensen for investing
(09:40):
so much in Kudah. It was taking die space on
the chip, it was crushing their gross margins for years,
and he kept doing it because he was convicted this
would be the future. And you know, luckily for Nvidia,
Starboard didn't go. Activists they they kind of pressured in Nvidia.
They did, and Vidia did a big stock buy back.
The stock went up for twenty percent in a very
short year, and Star Wars like, I'll take that gain.
(10:03):
Then Jess Smith told me that he was like, hmm,
I should have never sold in video. He met with Jensen.
He was impressed by Jensen. Seriously. Yeah, he took the
short term gain and you know that's history. But yeah,
Jensen does that all the time. I mean, the two
key technologies for video game GPUs that the reason why
gamers spend up to sixteen hundred dollars to play video
(10:27):
games on computer is DLSS, which is his AI upscaling technology,
and raytracing, which helps the GPUs do do lighting better.
Like it's amazing. He invested in ray tracing for ten
years before it was commercialized, Like ten years. Most companies
will invest it for two three years and then give up.
(10:47):
The LSS took six years, right, So this is this
is a company where he tells me like he's paranoid
of about getting disrupted by small he's a student of
history and all that stuff for it and they're coming
for him, Yes, every company is coming for him. And
he knows that they're going to come up from underneath
and companies complacent, and that's the thing. He is Paranoi
(11:08):
about being complacent, So he will he knows that if
one thing he said, if you don't invest your debt
in technology, he knows that.
Speaker 3 (11:16):
Which is so true, and it makes me begs the
question to me, So what is he looking at next?
And I don't know if he gave you any clothes,
But don't go anywhere, because we're going to do a
little bit of news and we're going to come back
with Take Kim, senior technology writer over at Baron's, former
Bloomberg Opinion columnist, and his new book out, The End
Video Way, Jensen Wong and the Making of a Tech Giant.
We're going to continue our conversation. You are listening and
(11:38):
watching Bloomberg Business Week.
Speaker 2 (11:40):
Want to get right back to Take him, senior technology
writer for Baron's, a former columnist for Bloomberg Opinion. He's
got a new book out. It's out today. It's called
The Nvidia Way, Jensen Wong and the Making of a
Tech Giantage joins us here in the Bloomberg Interactive Brokers studio.
When we were talking before you were talking about the
paranoia about competition and coming for in video. It's a
(12:01):
question that we Yeah, ask Ian King all the time,
but he's on our program, like who is coming up?
This is capitalism. This is like the way that you
know efficient markets work. If something is incredibly successful, you're
going to have other players try to enter the market.
Who's coming after in Vidia? How big of a barrier
(12:21):
or a moat do they have?
Speaker 1 (12:22):
So most Wall Street analysts investors are worry about the
big hyperscalers. So the Microsoft Azures, the Google clouds, Amazon,
so all of them are making their own versions of aichips.
Speaker 2 (12:34):
Yeah, we had an Amazon story just a couple of
weeks ago about the effort in Austin, Texas, right that
they're doing there to try to take on in video.
Speaker 1 (12:42):
And empirically it makes sense. These are huge companies that
convest billions of dollars in R and D. But I'm
not worried about the hyperscalers at all. The problem is why,
because Google has amazing technology for TPUs, but no one
uses it because everyone's afraid a game locked in and
the performance is as good. So when I talk to
(13:03):
startup AI startups, they're like, I'm not going to lock
myself into Google. I mean, Google has your reputation of
like building stuff and then giving up and moving on.
I mean we've seen that time at Google. Studia is
a great example with the cloud, video game streaming, and
no one wants to get locked into one vendor. And
with Nvidia you get the best performance. So also the
(13:25):
most important thing is Nvidia with Kuda has been optimized
for over fifteen years, so if you ever have a problem,
you can look up and say, oh, this is how
to fix it. And they ironed out all the bugs.
And if you're an AI startup, you have one hundred problems.
You're working on one. CEO told me, I don't want
another problem where if you port your software to a
different AI chip platform you always have problems. It's like
(13:50):
going from XA six to power pc back in the day.
So you don't want that problem. And then the other
problem is in Nvidia, it's great. One of the biggest
competitive vantages is they accelerate product cycles. So back in
the nineteen nineties, the way they drove all their comparis
at business was the typical video game chick took eighteen
months to design and ship and they're like, forget that,
(14:13):
We're gonna do every six months. And because they're so
the work ethic and relentless execution, it drove all the
comparison at business. So last October it took them two
years to make a major GPU chip platform, and they're like,
forget that, We're gonna do that every year. So why
would you switch to a different platform to save a
(14:33):
little money on the hardware side when Jensen is gonna
come out with a better AIGPU platform every twelve months,
that's thirty times fast. Hard to compete with that, Yeah,
you can't. And the technical risk is a huge thing
because if you port your stuff over it might not work,
there might be bugs, and you don't want to risk that.
Like time to market. If you're an AI startup right now,
(14:55):
it's everything, and the fastest time to market is by
using a video.
Speaker 3 (15:00):
And yet, as you're right, Jensen's always looking ahead, what's next?
He sounds like he's constantly churning and looking at where,
whether it's five years from now, ten years from now.
As you talk about the things that he was investing
in for a really long time, including these AI chips,
So where is he looking next?
Speaker 1 (15:18):
So I've listened to hundreds of hours of the speeches
the last few years. The Internet's an amazing thing. I've
talked to him directly, and I know the two most
important things he's most excited about. Number one is digital biology.
This area is just perfect for the AI computation power
that's just going going up exponentially, so making drugs exactly.
(15:43):
It's drug discovery, molecule.
Speaker 3 (15:46):
Similar medicine, stuff like that.
Speaker 1 (15:48):
All that stuff. And I've talked to a drug startup,
a drug startup. I talked to the head of Bristol
Meyers squib Digital and they're seeing vast productivity gains by
you in Vidia AI service systems, And it makes sense.
All these companies, especially to big companies, have decades of
clinical data that they could put into these AI GPU systems.
(16:12):
And the thing that really is really critical that's leading
to innovation is that you're getting these AIGPU clusters that
are scaling from sixteen thousand GPUs and now to one
hundred thousand, and now they're building one million. You know
that it's just a matter of time. So this vast
(16:32):
amount of computing power can access and digest all that data,
figure out all the commutations and simulate all the biological interactions,
and you could figure out drugs that could cure disease.
Speaker 3 (16:45):
Be very specific.
Speaker 2 (16:46):
It does seem like in Vidia is inextricably bound to Jensen,
and Jensen too and video. What's the succession plan?
Speaker 1 (16:53):
I knows, first of all, he doesn't. I don't see
him giving up in video anytime soon. This is his life,
this is this is what he enjoys. So I'm complete,
one hundred percent convicted that he's not planning to lead
anytime soon. I mean, this is the love of his life,
he says. I love in video all the time.
Speaker 2 (17:13):
Everybody gets older, everybody gets older.
Speaker 3 (17:15):
But how much of the company is him? Like we
talk about this when you've got an individual so identified
with a company that, if God forbid, you know, are
there individuals I mean, after Tim Cook, they were able
to figure out their.
Speaker 1 (17:30):
Way forward after Steve Jobs.
Speaker 3 (17:32):
I mean, I'm just forgiving me. I'm sorry, sorry Tim
after Steve Jobs.
Speaker 1 (17:35):
But you know what I'm saying, Yeah, I mean, I
think that's the critical question. He talks about how he
kind of configured and structured in video to be a
race car that he could steer perfectly it's like perfectly
matches his way of managing a company. I think that's
the big That's a question for every big company, right
like this this Disucsessing CEO. Who it is matters. I mean,
(17:58):
do you get a Johnsky almost drove Apple ad business right?
Or do you get a Satie Nadella who just took
Microsoft to new heights. I mean that's a question for
every company.
Speaker 3 (18:07):
One question we really want to know. Did you get
to see the closet where all the leather jackets are?
Speaker 1 (18:11):
No?
Speaker 2 (18:12):
What, ah, come on?
Speaker 3 (18:14):
But you know it's such a part.
Speaker 1 (18:15):
Of him, right, yes, Like yeah, no questions or anything
came up. I did not focus on the other jackets.
I probably should have. I did not ask about that.
Speaker 2 (18:24):
But Part two.
Speaker 3 (18:25):
Future call on future columns, great dive, deep dive about
a company that we talk about I feel like on
a daily basis and really has kind of changed, certainly
the investment narrative in a big way.
Speaker 2 (18:36):
Take him senior technology writer for Baron's, former columnist for
Bloomberg Opinion. The new book it is out today, The
Nvidia Way, Jensen Wong and the Making of a Tech Giant,
shares of in video. By the Way, today they were
actually lower down about two point seven percent still though, Carol,
this year ALP one hundred and seventy three percent, three
(18:56):
point three trillion dollar market top.
Speaker 3 (18:58):
Yeah doing okay, I would say, yeah.
Speaker 2 (19:00):
That comes after what last year's record run as well.
Speaker 3 (19:04):
Uh done. Yeah, it was up to almost two hundred
and forty percent last year. Yeah, yeah, it's quite a run.
Speaker 1 (19:09):
Great stuff.
Speaker 3 (19:10):
Check it out, folks, and we'll probably include that in
our weekend podcast to interesting stuff. This is Bloomberg BusinessWeek
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
You're listening to Bloomberg Business Week with Carol Messer and
Tim Stenebek on Bloomberg Radio. Well, there's perhaps no name
that's more associated with the AI euphoria we've seen over
the last couple of years than in video. Shares up
about nine hundred percent since the start of last year,
and according to our next guest, it's the best performing
US stock in history. Take him his senior technology writer
(00:29):
for Barons. He's a former columnist for Bloomberg Opinion. He's back.
He's got a new book out today. It's called The
Nvidio Way, Jensen Wong and the Making of a Tech Giant.
Tay joins us here in the Bloomberg Interactive Brokers Studio. Hey, welcome,
Thanks Tim, It's so great to be here.
Speaker 1 (00:44):
Thanks Carol.
Speaker 2 (00:45):
Yeah, congrats on the book. So if you I mean,
I remember when I was a teenager walking by a
computer and it had like had a Nvidia logo on it,
Like I think it was like a sticker because this
person was a gamer. Then it went like I went
like decades without hearing about in video until the crypto
boom in like twenty sixteen or so, if you weren't
(01:08):
a gamer or a tech analyst in video might not
have been on your radar until the last couple of years.
I went back and looked at market cap. It was
like a shy of a twenty billion dollar company until
around twenty sixteen, it's three point three trillion dollars. Now,
when did Nvidio get on your radar?
Speaker 1 (01:23):
Well, I was there from the band because I was
addicted to computer games and video games so ever since
it started in nineteen ninety three, I'd say about starting
nineteen ninety eight, they started to make the best piece
that's around.
Speaker 2 (01:35):
When they went public too.
Speaker 1 (01:36):
They were in publicly nineteen ninety nine nine. What really
changed was there's this game called Quake, written by John Carmack.
He's probably the most famous video game programmer of all time.
He also programmed Doom right before that. So these two
generational games kind of exploded the PC computer gaming market.
Three DFCTS, which is actually the leading three D graphics
(01:58):
chip company before in video. When Quake came out, the
revenue went from like four million to two hundred million
a year and a half. So that really created the market.
This game called Quake by John Carmack, and I think
almost every computer video game person knows this game in
the nineteen nineties, So.
Speaker 3 (02:16):
How did they get to be the company that we
talk about NonStop today? And I'm looking at a chart
going back to nineteen ninety. For a long time, it
kind of moved along and didn't do much, and then
you go to kind of late in twenty twenty two,
and then it just took off.
Speaker 1 (02:31):
Well, I mean, it was still a great company in
the first ten to fifteen years. I think it was
the fastest growing company to get a billion dollar run rate.
It'd be Broadcom in the first ten to fifteen years.
So this is a very fast growing, strong company. I mean,
it's just on a different level now where it's right
behind Apple. But it was the most voluble company for
(02:52):
a big part of this year. So it all started
with the three D graphics and then program Mobile GPUs Kuda,
and now with the tensor cores and AI chips. And
Jensen Huang, who's the co founder and CEO, every single
major computer shift in computer chips and three graphics, he's
(03:12):
learned to position in VideA to take advantage of it.
I compare him in the book to read Hastings. With Netflix,
Hastings had this intuitive sense as someday we're just gonna
watch video over the Internet. But the technology wasn't ready yet,
so he started the DVB by rental business and just
stayed around and invested in the technologies. And when you know,
(03:34):
the internet infrastructure with broadband got good enough for consumers
and the video streaming technology was there, he jumped on
it and was the first mover and dominated that market.
Jensen and Vidia did that like with three four different markets.
Like every single time he positions the company, he doesn't
know exactly when it's going to take off, like maybe
it's five years from now, maybe it's seven years from now.
(03:55):
But he positions the company invests tremendous amount of capital
and R and D, and this the software ecosystem is
actually huge competitive avantage that.
Speaker 2 (04:03):
He Well, let's talk about him as a leader, him
as a visionary. What did you you spend some time
with him during the writing of this book, you interviewed
him earlier this year. What would you say it is
about his personality, his leadership style, the way he conducts
himself that has created this culture ad in video that
has allowed it allowed it to not just succeed, but dominate.
Speaker 1 (04:26):
I would say there are three pillars, and the n
Video way is basically the Gensen way, because I mean
he's there from the beginning and create this.
Speaker 2 (04:33):
Remember there's a Netflix way too, Oh.
Speaker 1 (04:35):
Well, but this is like this is Jenson's way. I
would say three pillars are insane, work ethic, talent, cultivation,
and speed and velocity. So I'll just talk through each
three work ethic. No one works harder than Jensen. I
mean he is reading one hundred emails from his employees
every day. He works all week. Maybe Elon Musk is
(04:59):
up there. Sorry, but I'd even argue compared to you,
maybe Jensen works more. Like he says he can't he
when he goes to the movie theater, he can't remember
the movie because he's constantly thinking about work all day.
He like lives and breathes work, and work is relaxing.
Like he drinks a Highland Parks scotch Lan at night
and Sunday and he's going through emails and like peppering
(05:20):
his employees do this, do that, and that's his life.
So even at the beginning, like I have these stories
when I talk to these early employees, like they're working
past midnight, waking up at four or five in the morning. Yeah,
and this is a time when Intel was about to
crush them. And I had this one employee telling me, well,
Jensen just inspired me to work even harder. So even
(05:41):
though like I should go back to bed, and I
really want to go back to bed, I'm going to
get to work early and work even harder. So work ethic,
no one, No one's going to be Gensen tumtr Worth.
He just he just he's a workaholic and will out
work anymore. In terms of talent cultivation, cultivation, he knows
that the only way you win in this in technology
(06:03):
is hiring the best people. So he's constantly recruiting, you know,
he's every time he interviews or talks to someone, he goes,
who have you worked with in the past that were
rock stars? And he pockets that knowledge and then three
years later he's like recruiting that person, constantly badgering them
and sometimes they say no. In the beginning, it's like no, no, no,
I don't want to leave my cozy company. But he
(06:24):
usually gets the people and then they stay for twenty
five thirty years and The reason is partly in video
wins and everyone wants to stay on the winning team.
But second, it's just there's this great culture inside video
that even though there's thirty thousand people. I write a
lot about this in the book. I think large parts
(06:45):
of corporate America and technology industry suffer from dysfunction, from
internal politics where you're spending half your day trying to
please your boss's boss instead of doing what's right for
the customer and for the company itself. And video costs
this mission. As the boss, make sure you're making decisions
where you're fulfilling the company's mission, not you know, all
(07:08):
the Game of Thrones type internal in fighting. The other
part of the other big part is when I talk
to them video boys that leave in video, they can't
adjust to the new companies when they go to Google, Microsoft, Apple,
because because there is so much endless meetings, internal paralysis.
Like one person says, it's like swimming through quicksand and
(07:29):
I think.
Speaker 2 (07:29):
They should just retire and count their money.
Speaker 1 (07:32):
Yeah.
Speaker 3 (07:32):
Yeah, but a lot didn't just need to talk about
we talk about company culture. We work with a company
that's got a very distinct culture as well, But it
makes me think and video. Wasn't just oh, we were
at the right place at the right time. He it
sounds like has been constantly checking where does this market go?
Because if you think about the timing of a like
(07:54):
just how it all happened, This wasn't just accidental. Wow,
I got it right.
Speaker 1 (07:58):
No, not at all. I mean he was investing Kuda,
which is the reason why in Vidia is kind of
doing really well in AI, the ecosystem Kuda. He invested
that in two thousand and six, and then when deep
learning took off in twenty thirteen. Yeah, he was like,
we need to invest in AI software libraries, and we
need to go to campuses and e spread the religion
(08:18):
of Kuda.
Speaker 2 (08:19):
Explain what Kuda is.
Speaker 1 (08:20):
Kuda is a programming platform for parallel computing, which is
what Nvidia GPUs do. So basically in videas they call
it accelerate computing, but it's basically just parallel computing where
each GPU has thousands of tiny little processors, and most
computer PCs run on CPUs which have four to eight
(08:42):
processors normally, So in Vidia's kind of computing architecture is
based on this parallel you know, tiny processor mentality and
Jensen from the beginning, even in nineteen ninety three, saw
this as the future of computing, like you're going to
break apart all the work into tiny little processes and
(09:02):
they're going to work on GPUs. And he saw that
from the beginning that this is the way the world
of computing is going to go. So when AI took
off in the.
Speaker 3 (09:11):
Video was sixteen years.
Speaker 1 (09:13):
So that's amazing, Like, how.
Speaker 3 (09:15):
Does you kind of keep going keep going.
Speaker 1 (09:18):
Because he wrote, like like I said about Netflix, he
knows where the future is going to go. Yeah, and
he will keep in that. I mean. The amazing thing
about Kuda is all these I talked about. I have
a chapter in the book about Starboard Value, which is
a very famous activist hed. Yeah, they were board members
and Video were worried when Starboard took a big position
that they were going to, you know, clamp down on
Kuda because Wall Street was all over Jensen for investing
(09:40):
so much in Kudah. It was taking die space on
the chip, it was crushing their gross margins for years,
and he kept doing it because he was convicted this
would be the future. And you know, luckily for Nvidia,
Starboard didn't go. Activists they they kind of pressured in Nvidia.
They did, and Vidia did a big stock buy back.
The stock went up for twenty percent in a very
short year, and Star Wars like, I'll take that gain.
(10:03):
Then Jess Smith told me that he was like, hmm,
I should have never sold in video. He met with Jensen.
He was impressed by Jensen. Seriously. Yeah, he took the
short term gain and you know that's history. But yeah,
Jensen does that all the time. I mean, the two
key technologies for video game GPUs that the reason why
gamers spend up to sixteen hundred dollars to play video
(10:27):
games on computer is DLSS, which is his AI upscaling technology,
and raytracing, which helps the GPUs do do lighting better.
Like it's amazing. He invested in ray tracing for ten
years before it was commercialized, Like ten years. Most companies
will invest it for two three years and then give up.
(10:47):
The LSS took six years, right, So this is this
is a company where he tells me like he's paranoid
of about getting disrupted by small he's a student of
history and all that stuff for it and they're coming
for him, Yes, every company is coming for him. And
he knows that they're going to come up from underneath
and companies complacent, and that's the thing. He is Paranoi
(11:08):
about being complacent, So he will he knows that if
one thing he said, if you don't invest your debt
in technology, he knows that.
Speaker 3 (11:16):
Which is so true, and it makes me begs the
question to me, So what is he looking at next?
And I don't know if he gave you any clothes,
But don't go anywhere, because we're going to do a
little bit of news and we're going to come back
with Take Kim, senior technology writer over at Baron's, former
Bloomberg Opinion columnist, and his new book out, The End
Video Way, Jensen Wong and the Making of a Tech Giant.
We're going to continue our conversation. You are listening and
(11:38):
watching Bloomberg Business Week.
Speaker 2 (11:40):
Want to get right back to Take him, senior technology
writer for Baron's, a former columnist for Bloomberg Opinion. He's
got a new book out. It's out today. It's called
The Nvidia Way, Jensen Wong and the Making of a
Tech Giantage joins us here in the Bloomberg Interactive Brokers studio.
When we were talking before you were talking about the
paranoia about competition and coming for in video. It's a
(12:01):
question that we Yeah, ask Ian King all the time,
but he's on our program, like who is coming up?
This is capitalism. This is like the way that you
know efficient markets work. If something is incredibly successful, you're
going to have other players try to enter the market.
Who's coming after in Vidia? How big of a barrier
(12:21):
or a moat do they have?
Speaker 1 (12:22):
So most Wall Street analysts investors are worry about the
big hyperscalers. So the Microsoft Azures, the Google clouds, Amazon,
so all of them are making their own versions of aichips.
Speaker 2 (12:34):
Yeah, we had an Amazon story just a couple of
weeks ago about the effort in Austin, Texas, right that
they're doing there to try to take on in video.
Speaker 1 (12:42):
And empirically it makes sense. These are huge companies that
convest billions of dollars in R and D. But I'm
not worried about the hyperscalers at all. The problem is why,
because Google has amazing technology for TPUs, but no one
uses it because everyone's afraid a game locked in and
the performance is as good. So when I talk to
(13:03):
startup AI startups, they're like, I'm not going to lock
myself into Google. I mean, Google has your reputation of
like building stuff and then giving up and moving on.
I mean we've seen that time at Google. Studia is
a great example with the cloud, video game streaming, and
no one wants to get locked into one vendor. And
with Nvidia you get the best performance. So also the
(13:25):
most important thing is Nvidia with Kuda has been optimized
for over fifteen years, so if you ever have a problem,
you can look up and say, oh, this is how
to fix it. And they ironed out all the bugs.
And if you're an AI startup, you have one hundred problems.
You're working on one. CEO told me, I don't want
another problem where if you port your software to a
different AI chip platform you always have problems. It's like
(13:50):
going from XA six to power pc back in the day.
So you don't want that problem. And then the other
problem is in Nvidia, it's great. One of the biggest
competitive vantages is they accelerate product cycles. So back in
the nineteen nineties, the way they drove all their comparis
at business was the typical video game chick took eighteen
months to design and ship and they're like, forget that,
(14:13):
We're gonna do every six months. And because they're so
the work ethic and relentless execution, it drove all the
comparison at business. So last October it took them two
years to make a major GPU chip platform, and they're like,
forget that, We're gonna do that every year. So why
would you switch to a different platform to save a
(14:33):
little money on the hardware side when Jensen is gonna
come out with a better AIGPU platform every twelve months,
that's thirty times fast. Hard to compete with that, Yeah,
you can't. And the technical risk is a huge thing
because if you port your stuff over it might not work,
there might be bugs, and you don't want to risk that.
Like time to market. If you're an AI startup right now,
(14:55):
it's everything, and the fastest time to market is by
using a video.
Speaker 3 (15:00):
And yet, as you're right, Jensen's always looking ahead, what's next?
He sounds like he's constantly churning and looking at where,
whether it's five years from now, ten years from now.
As you talk about the things that he was investing
in for a really long time, including these AI chips,
So where is he looking next?
Speaker 1 (15:18):
So I've listened to hundreds of hours of the speeches
the last few years. The Internet's an amazing thing. I've
talked to him directly, and I know the two most
important things he's most excited about. Number one is digital biology.
This area is just perfect for the AI computation power
that's just going going up exponentially, so making drugs exactly.
(15:43):
It's drug discovery, molecule.
Speaker 3 (15:46):
Similar medicine, stuff like that.
Speaker 1 (15:48):
All that stuff. And I've talked to a drug startup,
a drug startup. I talked to the head of Bristol
Meyers squib Digital and they're seeing vast productivity gains by
you in Vidia AI service systems, And it makes sense.
All these companies, especially to big companies, have decades of
clinical data that they could put into these AI GPU systems.
(16:12):
And the thing that really is really critical that's leading
to innovation is that you're getting these AIGPU clusters that
are scaling from sixteen thousand GPUs and now to one
hundred thousand, and now they're building one million. You know
that it's just a matter of time. So this vast
(16:32):
amount of computing power can access and digest all that data,
figure out all the commutations and simulate all the biological interactions,
and you could figure out drugs that could cure disease.
Speaker 3 (16:45):
Be very specific.
Speaker 2 (16:46):
It does seem like in Vidia is inextricably bound to Jensen,
and Jensen too and video. What's the succession plan?
Speaker 1 (16:53):
I knows, first of all, he doesn't. I don't see
him giving up in video anytime soon. This is his life,
this is this is what he enjoys. So I'm complete,
one hundred percent convicted that he's not planning to lead
anytime soon. I mean, this is the love of his life,
he says. I love in video all the time.
Speaker 2 (17:13):
Everybody gets older, everybody gets older.
Speaker 3 (17:15):
But how much of the company is him? Like we
talk about this when you've got an individual so identified
with a company that, if God forbid, you know, are
there individuals I mean, after Tim Cook, they were able
to figure out their.
Speaker 1 (17:30):
Way forward after Steve Jobs.
Speaker 3 (17:32):
I mean, I'm just forgiving me. I'm sorry, sorry Tim
after Steve Jobs.
Speaker 1 (17:35):
But you know what I'm saying, Yeah, I mean, I
think that's the critical question. He talks about how he
kind of configured and structured in video to be a
race car that he could steer perfectly it's like perfectly
matches his way of managing a company. I think that's
the big That's a question for every big company, right
like this this Disucsessing CEO. Who it is matters. I mean,
(17:58):
do you get a Johnsky almost drove Apple ad business right?
Or do you get a Satie Nadella who just took
Microsoft to new heights. I mean that's a question for
every company.
Speaker 3 (18:07):
One question we really want to know. Did you get
to see the closet where all the leather jackets are?
Speaker 1 (18:11):
No?
Speaker 2 (18:12):
What, ah, come on?
Speaker 3 (18:14):
But you know it's such a part.
Speaker 1 (18:15):
Of him, right, yes, Like yeah, no questions or anything
came up. I did not focus on the other jackets.
I probably should have. I did not ask about that.
Speaker 2 (18:24):
But Part two.
Speaker 3 (18:25):
Future call on future columns, great dive, deep dive about
a company that we talk about I feel like on
a daily basis and really has kind of changed, certainly
the investment narrative in a big way.
Speaker 2 (18:36):
Take him senior technology writer for Baron's, former columnist for
Bloomberg Opinion. The new book it is out today, The
Nvidia Way, Jensen Wong and the Making of a Tech Giant,
shares of in video. By the Way, today they were
actually lower down about two point seven percent still though, Carol,
this year ALP one hundred and seventy three percent, three
(18:56):
point three trillion dollar market top.
Speaker 3 (18:58):
Yeah doing okay, I would say, yeah.
Speaker 2 (19:00):
That comes after what last year's record run as well.
Speaker 3 (19:04):
Uh done. Yeah, it was up to almost two hundred
and forty percent last year. Yeah, yeah, it's quite a run.
Speaker 1 (19:09):
Great stuff.
Speaker 3 (19:10):
Check it out, folks, and we'll probably include that in
our weekend podcast to interesting stuff. This is Bloomberg BusinessWeek
Hosts And Creators
Tim Stenovec
Carol Massar
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