These 10 Nvidia Shareholders Have Gotten $36 Billion Richer In A Month – Part 2 of 2

By Phoebe Liu and Kerry A. Dolan, Forbes Staff. June 16, 2024.

Benjamin Hermalin, a professor of finance at U.C. Berkeley, says via email that there are two broad effects of executives holding large amounts of stock, as Huang does. “First, managerial stock ownership makes management more concerned with the firm’s value (stock price), which is a positive for the other shareholders,” all other things being equal. But it could also make the team too cautious, knowing that so much of their money is tied up in the stock.

So far there are few signs that Huang is becoming risk averse.

Meanwhile, it’s pretty easy to see now why these board members as well as key insiders held onto so much stock, at least until these record highs. But earlier on, it wasn’t so obvious. Nvidia’s first chip, released in 1995, had failed. Partway through developing its second chip, Huang and team decided the architecture was all wrong and they stopped work on it, according to a podcast from VC firm Sequoia. “Between 1993 and 1997 we almost went bankrupt three times,” says board member Stevens. “One of the things that Jensen said was ‘We’re only 30 days from going out of business.’”

Nvidia turned things around by working in reverse on its third attempt to design a chip, tackling the software first, Huang explains on the Sequoia podcast. It moved quickly due to evaporating funding, and its next chip was a success. In the early 2000s it developed the world’s first graphics processing unit, or GPU, which became hugely popular for rendering images in video games. In the past decade or so, Nvidia found that AI researchers in both the corporate and academic worlds were using its GPUs to run neural networks–a foundation of AI–and to create home-grown supercomputers. That helped fuel the decision to bet on AI computing, before there was a demonstrated market. That bet has paid off in spades.

One person who missed out on billions is Huang’s cofounder and former chief technology officer, Curtis Priem—who had the same number of shares as Huang when Nvidia went public in 1999, but left the company more than 20 years ago. Had he held onto his stock, he could have been a centibillionaire. Priem either sold or donated all of his Nvidia shares by 2007, he told Forbes last year, and is funding a quantum computer worth triple his current estimated net worth of under $50 million. It’s not clear what cofounder and former vice president of engineering Chris Malachowsky has done with his Nvidia shares since leaving two decades ago. He hasn’t been required to disclose his Nvidia sales or holdings since 2002, when he held 773 million shares (adjusted for splits). Attempts to reach Malachowsky were unsuccessful.

Nvidia pushes out Apple, Microsoft to become world’s most valuable company

The computer chipmaker’s stock market value has risen rapidly during the AI boom.

By Gerrit De Vynck and Rachel Lerman. WSJ. June 18, 2024.

Nvidia, the computer chip maker at the center of the artificial intelligence boom, continued its spectacular stock market rise Tuesday, eclipsing Microsoft and Apple to become the world’s most valuable public company.

Nvidia’s shares rose more than 3 percent Tuesday, giving the company an overall market valuation of $3.34 trillion. Apple and Microsoft, which for years have swapped positions as the world’s most valuable company, were worth slightly less — around $3.29 trillion and $3.31 trillion, respectively, at the end of trading.

Nvidia’s computer chips and software are crucial to training the AI algorithms behind image generators and chatbots like OpenAI’s ChatGPT. As the tech and business worlds throw themselves into the AI boom, demand for the chips has skyrocketed, pushing Nvidia’s revenue up to $26 billion in the first quarter of this year, up from just $7.2 billion a year ago.

The AI boom has been reshuffling the world’s biggest companies in the past two years. In January