How Sega's $5 million rescue helped Nvidia, the largest company in the world.

      Nvidia and Sega share a history that stretches back 30 years. Jensen Huang traveled to Tokyo to express his gratitude to the game developer for a $5 million investment that rescued his company from bankruptcy in 1995. “If it weren't for Sega's support, Nvidia wouldn't exist today,” Huang said, acknowledging the contributions of a gaming company that once prevented its downfall.

      During his visit on Wednesday, Huang met with former Sega CEO Shoichiro Irimajiri and game designer Yu Suzuki, as reported by Reuters, to thank them for a $5 million check written three decades ago. “It’s hard to believe that we chose the wrong technology, yet here we are today, the largest company in the world,” said Huang. “Your faith in us means a great deal to me.”

      The incorrect decision

      In 1995, Nvidia released its first chip, the NV1, which rendered graphics using curved shapes instead of triangles. Although the mathematics was impressive, the timing was unfortunate. Microsoft soon established triangles as the standard for PC graphics with DirectX, leaving the NV1 obsolete. Consequently, a subsequent chip Nvidia was developing with Sega was canceled.

      By the mid-1990s, the startup had around 30 days’ worth of cash remaining, according to Tom’s Hardware. Huang flew to Japan to personally address the failure.

      The $5 million lifeline

      Huang requested Sega to convert a contract payment into an equity investment, explaining to Irimajiri that the funds would likely be lost but that Nvidia had no future without it. Irimajiri supported his proposal and convinced Sega’s board. The $5 million provided Nvidia with roughly six additional months of runway. The company utilized these funds to develop the RIVA 128, a triangle-based chip that debuted in 1997 and sold a million units within four months.

      This marked a pivotal turnaround for Nvidia, which went public in 1999. Sega eventually sold its stake for around $15 million.

      A $1 trillion farewell

      Had Sega held onto its investment, it would now be valued at approximately $1 trillion. Nvidia has become the world's most valuable company, with its AI chips serving as the foundation of the current boom. Huang, known for his leather jacket keynotes and even a CGI version of himself, frequently shares this near-death experience, especially with young engineers. This occasion, however, was dedicated to those who had issued the check. The two companies used the visit to celebrate 30 years together, with a new Virtua Fighter game set to launch on Nvidia hardware.