Nvidia Part III: The Dawn of the AI Era (2022-2023) (Audio)

You like my Buck's T-shirt?

I love your Buck's T-shirt.

I went for the first time, what, two weeks ago, when I was down for a meeting at Benchmark, and the nostalgia in there was just unbelievable.

I can't believe you hadn't been before. I know Jensen is a Denny's guy, but I feel like he would meet us at Buck's if we asked him.

Or at the very least, we should figure out some Nvidia memorabilia to get on the wall at Buck's.

Totally.

Fit right in. All right, let's do it.

Let's do it.

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?

Welcome to Season 13, Episode 3 of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert.

I'm David Rosenthal.

And we are your hosts. Today, we tell a story that we thought we had already finished: Nvidia. But the last eighteen months have been so insane, listeners, that it warranted an entire episode on its own. So today is a part three for us with Nvidia, telling the story of the AI revolution, how we got here, and why it's happening now, starting all the way down at the level of atoms and silicon. So here's something crazy that I did a transcript search on to see if it was true. In our April 2022 episodes, we never once said the word "generative." That is how fast things have changed.

Unbelievable.

Totally crazy. And the timing of all of this AI stuff in the world is unbelievably coincidental and, uh, very favorable. So recall back to eighteen months ago. Throughout 2022, we all watched financial markets, from public equities to early-stage startups to real estate, just fall off a cliff due to rapid rise in interest rates. The crypto and Web3 bubble burst, banks fail. It seemed like the whole tech economy, and potentially a lot with it, was heading into a long winter.

Including Nvidia.

Including Nvidia, who had that massive inventory write-off for what they thought was over-ordering.

Yep. Wow, how things have changed.

[chuckles] Yeah. But by the fall of 2022, right when everything looked the absolute bleakest, a breakthrough technology finally became useful after years in research labs. Large language models, or LLMs, built on the innovative transformer machine learning mechanism, burst onto the scene, first with OpenAI's ChatGPT, which became the fastest app in history to a hundred million active users, and then quickly followed by Microsoft, Google, and seemingly every other company. In November of 2022, AI definitely had its Netscape moment, and time will tell, but it may have even been its iPhone moment.

Well, that is definitely what Jensen believes.

Yep. Well, today, we'll explore exactly how this breakthrough came to be, the individuals behind it, and of course, why the entire thing has happened on top of Nvidia's hardware and software. If you wanna make sure you know every time there's a new episode, go sign up at acquired.fm/email. You'll also get access to two things that we aren't putting anywhere else: one, a clue as to what the next episode will be, and two, follow-ups from previous episodes from things that we learned after release. You can come talk about this episode with us after listening at acquired.fm/slack. If you want more of David and I, check out our interview show, ACQ2. Our next few episodes are about AI, with CEOs leading the way in this world we are talking about today, and a great interview with Doug Demuro, where, uh, we wanted to talk about a lot more than just Porsche with him, but, uh, you know, we only had eleven hours or whatever we had-