Nvidia: The Machine Learning Company (2006-2022)

1. BGBen Gilbert0:02

   Still got Swedish House Mafia, Greyhound in my head from the pump up.

2. DRDavid Rosenthal0:05

   Nice. Nice. [laughing]

3. BGBen Gilbert0:08

   It is funny how all like GPU companies, like I was watching a bunch of NVIDIA keynotes and AMD keynotes to get ready for this, and everyone is so like techno, neon lighting.

4. DRDavid Rosenthal0:19

   [chuckles]

5. BGBen Gilbert0:19

   Like, it's like crypto before crypto.

6. SPSpeaker0:20

   [singing] Who got the truth? Is it you? Is it you? Is it you? Who got the truth now? Is it you? Is it you? Is it you? Sit me down, say it straight. Another story on the way. Who got the truth?

7. BGBen Gilbert0:37

   Welcome to Season Ten, Episode Six of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I am the co-founder and managing director of Seattle-based Pioneer Square Labs, and our venture fund, PSL Ventures.

8. DRDavid Rosenthal0:53

   And I'm David Rosenthal, and I am an angel investor based in San Francisco.

9. BGBen Gilbert0:58

   And we are your hosts. When I was a kid, David, I used to stare into backyard bonfires and wonder if that fire flickering was doing so in a random way, or if I knew about every input in the world, all the air, exactly the physical construction of the wood, all the variables in the environment, if it was actually predictable. And I don't think I knew the term at the time, but modelable. If I could know what the flame could look like if I knew all those inputs. And we now know, of course, it is indeed predictable, but the data and compute required to actually know that is extremely difficult. But that is what NVIDIA is doing today.

10. DRDavid Rosenthal1:43

    Ben, I love that intro. That's great!

11. BGBen Gilbert1:44

    [laughing]

12. DRDavid Rosenthal1:45

    I was thinking, like, "Where is Ben going with this?"

13. BGBen Gilbert1:47

    And this was occurring to me as I was watching Jensen sharing the omniverse vision for NVIDIA, and realizing NVIDIA has really built all the building blocks: the hardware, the software for developers to use that hardware, all the user-facing software now, and services to simulate everything in our physical world with their unbelievably efficient and powerful GPU architecture. And these building blocks, listeners, aren't just for gamers anymore. They are making it possible to recreate the real world in a digital twin, to do things like predict airflow over a wing, or simulate cell interaction to quickly discover new drugs without ever once touching a petri dish, or even model and predict how climate change will play out precisely. And there is so much to unpack here, especially in how NVIDIA went from making commodity graphics cards to now owning the whole stack in industries from gaming to enterprise data centers, to scientific computing, and now even basically off-the-shelf, self-driving car architecture for manufacturers. And at the scale that they're operating at, these improvements that they're making are literally unfathomable to the human mind. And just to illustrate, if you are training one single speech recognition machine learning model these days, one, just one model, the number of math operations, like adds or multiplies, to accomplish it is actually greater than the number of grains of sand on the Earth.

14. DRDavid Rosenthal3:17

    I know exactly what- [chuckles]

15. BGBen Gilbert3:19

    [chuckles]

16. DRDavid Rosenthal3:19

    -part of the research you got that from, 'cause I read the same thing, and I was like: "You gotta be freaking kidding me." [chuckles]

17. BGBen Gilbert3:24

    Isn't that nuts? I mean, there's just nothing better in all of the research that you and I both did, I don't think, to better illustrate just the unbelievable scale of data and compute required to accomplish the stuff that they're accomplishing, and how unfathomably small all of this is, the fact that that happens on one graphics card.

18. DRDavid Rosenthal3:44

    Yep. So great.

19. BGBen Gilbert3:46

    Many of you already know this. Many of you have already RSVP'd, but if you have not, we would love to see you at our Arena show in Seattle. That's gonna be on May 4th at five PM. It's gonna be an awesome show. We've announced we'll have Jim Weber there, who's the CEO of Brooks Running, which is now amazingly a billion-dollar revenue business inside of Berkshire. We'll have other announcements coming as well. Go to acquired.fm/arenashow, or click the link in the show notes to RSVP. All proceeds are going to charity. Our huge thanks to our friends at PitchBook Data for putting this on with us. That's acquired.fm/arenashow, and we hope to see you there.

20. DRDavid Rosenthal4:24

    I get giddy every time you say that URL. [laughing]

21. BGBen Gilbert4:28

    [chuckles] Yes, indeed, it is real. All right, now, before we dive in, we have a fun little Q&A from our presenting sponsor, Vanta, the leader in automated cloud security and compliance. We are huge fans of Vanta and their approach. They do everything from SOC 2, to HIPAA, to GDPR, and more, and we are back with CEO and co-founder Christina Cacioppo to talk about it. So Christina, based on our last few conversations, I'm getting the sense Vanta is becoming a lot more than just a SOC 2 compliance company. Is that true, and how do you think about that?

22. SPSpeaker5:02

    Yes. I mean, the joke about Vanta, that's not a joke, is that we're a security company masquerading as a compliance company. And it comes from the early founding days when we wanted to start a security company and went around and asked all of our friends at startups, you know, what security problems they had. And they did have some, and then we're like: "Oh, you know, what happens if we solve them for you?" And our friends were like: "I'm not gonna use that, 'cause I have ten other problems ahead of that one. I just feel badly. I know I should be doing it, but it is hard for me to prioritize. I often need to get customers, so that's what I do." Which was a little demoralizing [chuckles] when you're trying to come up with a startup idea. But then we actually realized that compliance can be like the security feature someone is asking for, right? So generally, if you're selling, someone doesn't say: "Hey, will you be more secure?" They say: "Hey, are you SOC 2 compliant?" And so if we could build a product that help folks get more secure, help them prepare for and get through a compliance audit, it would accelerate their business, because they have their compliance certification, and leave them more secure.... One of our product team's goals is to help our users fix security issues we surface faster. So we can surface lots of misconfigurations, like proverbial doors and windows you leave open, but if no one fixes them, then we're not having the impact we're looking for, and we're not ultimately securing the company. And so we just have a substantial portion of our product team focused on building features that help companies fix misconfigurations faster. So the whole set of work that falls under that, but it's one of the things I'm most excited about.

23. BGBen Gilbert6:34

    Thanks, Christina, and thank you to Vanta, the leader in automated security and compliance software. If you are looking to join Vanta's two thousand-plus customers and get compliance certified in weeks instead of months, click the link in the show notes or go to vanta.com/acquired for a sweet ten percent discount.

24. DRDavid Rosenthal6:51

    Woo!

25. BGBen Gilbert6:51

    And after you finish this episode, come join the Slack acquired.fm/slack, and talk about it with us. And if you're dying for even more Acquired before we, uh, come back with our next season episode, search for Acquired LP Show in the podcast player of your choice. Our latest installment was a very fun, deep dive and close to home for me, diving in with Nick and Lauren, the creators of Trova Trip, on travel for the creator economy, where they talk about a very interesting business model that they have on their hands and a space that David and I know well in creator things.

26. DRDavid Rosenthal7:24

    Indeed.

27. BGBen Gilbert7:25

    All right, David, without further ado, take us in. And as always, listeners, this is not investment advice. David and I may hold positions in securities discussed, and, uh, please do your own research.

28. DRDavid Rosenthal7:35

    That's good. I was gonna make sure that you said that this time, because we're gonna talk a lot about investing and investors in Nvidia stock over the years. It has been a wild, wild journey. So last we left our plucky heroes, Jensen Huang and Nvidia, in the end of our Nvidia, the GPU company years, ending kind of roughly, you know, 2004, 2005, 2006. They had cheated death, not once, but twice. The first time in the super overcrowded graphics card market when they were first getting started, and then once they sort of, you know, jumped out of that frying pan into the fire of Intel, now gunning for them, coming to commoditize them, like all the other, you know, PCI chips that plugged into the Intel motherboard back in the day. And they bravely fend them off. They team up with Microsoft. They make the GPU programmable. This is amazing. They come out with programmable shaders with the GeForce 3. They power the Xbox. They create the CG programming language with Microsoft. And so here we are. It's now 2004, 2005, and this is a pretty impressive company. Public company, stock is high-flying after the tech bubble crash. They've conquered the graphics card market. Of course, there's ATI out there as well, which will come up again. But there's three pretty important things that I think the company built in the first ten years. So one, we talked about this a lot last time, the six-month ship cycles for their chips. We talked about that, but we didn't actually say [chuckles] the rate at which they ship these things. I actually wrote down, like, a little list. So in the fall of 1999, they shipped the first GeForce card, the GeForce 256. In the spring of 2000, GeForce 2. In the fall of 2000, GeForce 2 Ultra. Spring of 2001, GeForce 3, that's the big one with the programmable shaders. Then six months later, the GeForce 3 Ti 500.

29. BGBen Gilbert9:38

    I mean, the normal cycle, I think we said, was two years, maybe eighteen months, for most of their competitors, who just got largely left in the dust.

30. DRDavid Rosenthal9:46

    Well, I was just thinking, you know, yeah, the competitors are gone at this point, but I'm thinking about Intel. How often did Intel ship new products, let alone fundamentally new architecture? You know, there was the 286, and then the 386, and the Pentium, and it got up to Pentium, I don't know, five, whatever.

Episode duration: 2:15:21