Nvidia's Near-Death Experience: How a Failed Sega Project Led to AI Dominance

Nvidia's journey to becoming an AI giant began long before its success in artificial intelligence. In fact, it started in the mid-1990s when Jensen Huang and his team at Nvidia were trying to build graphics for Sega.

The relationship between Nvidia and Sega began well, with Nvidia releasing its first product, the NV1, in 1995. Sega adapted Virtua Fighter for the PC, making it the first 3D game to run on Nvidia graphics.

However, Nvidia's early graphics architecture was poorly matched to the emerging standard of DirectX, introduced by Microsoft. This led to a critical juncture for the company: either continue working on its Sega project and risk falling behind, or abandon the project and start anew.

Huang chose the latter, asking Sega for help in releasing Nvidia from the project while still providing roughly $5 million that remained connected to the agreement. This decision gave Nvidia time to change direction and focus on a new graphics chip, the RIVA 128.

The gamble worked, with more than one million RIVA 128 units sold during its first four months on the market in 1997. Nvidia had survived its wrong turn, and it would eventually become one of the leading companies in AI computing.