How Sega’s $5 million rescued Nvidia, the largest company in the world.

      Nvidia and Sega's relationship spans three decades. Jensen Huang traveled to Tokyo to express gratitude to the gaming company for a $5 million investment that rescued his company from bankruptcy in 1995. "Without Sega's support, Nvidia would not exist today," remarked Huang, the CEO of the world's most valuable company, in acknowledgment of the gaming firm that previously saved it from failure.

      Huang met with former Sega president Shoichiro Irimajiri and game designer Yu Suzuki in Tokyo on Wednesday, as reported by Reuters, to convey thanks for the $5 million check issued three decades ago. "It is unimaginable that we made the wrong choice in technology, yet here we are today, the largest company globally. Your belief in us holds significant meaning for me," Huang stated.

      The misjudgment

      In 1995, Nvidia released its first chip, the NV1, which rendered graphics using curved shapes instead of triangles. While the mathematics were sophisticated, the timing was poor. Microsoft quickly established triangles as the standard for PC graphics through DirectX, leaving the NV1 obsolete. A subsequent chip Nvidia was developing with Sega was ultimately canceled.

      By the mid-1990s, the startup was nearing a financial crisis, with only about 30 days of cash remaining, as noted by Tom’s Hardware. Huang made the trip to Japan to personally confess the company's difficulties.

      The $5 million lifeline

      Huang requested Sega to convert a contract payment into an equity investment, cautioning Irimajiri that the money was likely to be lost. He emphasized that without that funding, Nvidia had no real prospects. Irimajiri supported Huang and persuaded Sega's board to go along. The $5 million effectively provided Nvidia with about six additional months, which the company utilized to develop the RIVA 128, a triangle-based chip that was launched in 1997 and sold a million units within four months.

      That marked the beginning of Nvidia's resurgence. The company went public in 1999, and Sega eventually sold its stake for approximately $15 million.

      A $1 trillion farewell

      If Sega had retained its stake, it would now be valued at around $1 trillion. Nvidia is currently the most valuable company in the world, with its AI chips driving the industry's growth. Huang, now recognized for his leather-jacket presentations and even his CGI likeness, frequently shares this near-death experience, typically with young engineers. This occasion was special, however, as he recounted the story to those responsible for the initial investment. The two companies took this opportunity to commemorate their 30-year partnership, with a new Virtua Fighter game set to launch on Nvidia hardware.