Nvidia's dominance reflects the unique business logic of the CEO

Copyright © HT Digital Streams Limit all rights reserved. Steven Rosenbush, The Wall Street Journal 3 Min Read 12 Apr 2025, 06:08 PM IST NVIDIA Focus on the essentials. “If we can avoid doing something, we’ll do it,” said Jensen Huang, co-founder and CEO. Photo: David Paul Morris/Bloomberg News Summary The AI ​​power station has become paradoxical ubiquitous by only doing what it is necessary. AI Infrastructure King Nvidia is apparently everywhere, all at the same time, a success story it is tempting to explain by just pointing to the company’s powerful technology for training and AI. But the vast reach also reflects a business logic that excludes all but the most important aspects paradoxically. “If we can avoid doing something, we will do it,” co-founder and CEO Jensen Huang said on March 19 at a press conference at the GTC Developer Conference in San Jose, California. Huang’s approach has led to remarkable growth since the establishment of the company in 1993 and a recent rule as the world’s most valuable company. Even after China’s Deepseek questioned the extent of the future demand for high-end systems to train AI, not to mention the global shares caused by President Trump’s new rates on Friday afternoon, Nvidia had a $ 2.71 trillion market cap-the third highest in the world behind Apple and Microsoft on Friday afternoon. While the scope of the business has expanded over the years from making chips for video games to the production of all kinds of AI infrastructure, the principle of restraint has remained. The focus on what is essential and the foundation has driven Nvidia’s growth. It is capable of doing so many things because it knows what it can’t do or not. At the GTC event, Huang had a question about the many partners of the business and whether it put himself in a difficult position by competing with them in some cases. It is a common dynamic and source of strife for businesses in technology and beyond. For example, Amazon offers internal brands that can compete with other sellers on its platform, to the dissatisfaction of the traders. “Obviously, we have done a very poor job to explain what we are doing,” Huang replied. He acknowledged that Nvidia provides technology on AI infrastructure, networks, switches, storage and of course the calculation of each size, shape and shape. “But it’s the – we build everything, but we offer it to the world, but they want to take it,” he said. “And the reason is that we are not a solution business.” Instead of selling its customers or partners completed solutions, Nvidia usually allows them to decide how much of the last 50% of the value creation they want to develop on their own. According to Huang, it makes easier for businesses technical businesses to work with Nvidia. In theory, it also makes it easier for various businesses in a single industry like cars to build on top of Nvidia platforms and still distinguish themselves. Nvidia’s discipline also pays internally. The 36,000 employees make it much smaller than other major technical companies in Silicon Valley, and Huang wants to use that ‘very rare energy’ to the best, he said this month when he received an Edison performance award for innovation and innovators. That means focusing on work that Nvidia’s people consider to be worthy of their time, which is a strong motivator, he said. Take the architecture of data centers. In recent decades, the idea was to join a large number of cheap commodity servers. But Nvidia believes in scaling up before scaling out – to make a stretch of computers as powerful as possible before liaising in a large infrastructure. The risk of nvidia at strategic level is that another innovator, such as an Open Source competitor, is questioning his ‘scale-scale out’ comparison. The rise of Deepseek’s R1 model did this at least for a moment, because it seemed to be trained with older infrastructure. (Huang said the spread of such reasoning models actually means that the world needs 100 times more computer power than it thought last year.) But Nvidia’s approach keeps its workforce motivated. “Notice, if you come to talk to us, don’t say one employee ever:” We fight for share, “Huang said during the Edison ceremony. “Why fight for share? Create something new. ‘ And more than any single technological innovation, the success of Nvidia is the ability to create a mutually connected system in which clients and partners contribute to its infrastructure or build on it. Although it is not unique in itself, the implementation, thanks to the width of the core infrastructure, is the focus on extremely difficult and essential problems, and a strategic feeling of where not to apply its resources. Huang says, “We want to enable the ecosystem.” Write to Steven Rosenbush at steven.rosenbush@wsj.com, capture all the technological news and updates on live currency. Download the Mint News app to get daily market updates and live business news. More Topics #Technology Mint Specials