Jensen Huang Says Nvidia ‘Is Always in Peril’ Despite Trillion-Dollar Valuation

"It doesn’t matter what the market cap is. We feel like the company is going to go bankrupt tomorrow," a top Nvidia executive said of Huang's leadership.

Nvidia CEO Jensen Huang
Jensen Huang holding Nvidia’s Grace hopper superchip CPU used for generative A.I. during a presentation at the COMPUTEX 2023 conference. Walid Berrazeg/SOPA Images/LightRocket via Getty Images

Semiconductor maker Nvidia (NVDA) is without question the hottest tech company of the moment. Its artificial intelligence chips are in demand from almost every company developing A.I. applications. This fueled a 250 percent stock rally in the past 12 months and pushed Nvidia’s market cap past the $1 trillion mark. But Jensen Huang, the company’s cofounder and longtime CEO, has no time for complacency.

“There are no companies that are assured survival. If you don’t think you are in peril, that’s probably because you have your head in the sand,” Huang said today (Nov. 9) during an interview at the Harvard Business Review’s virtual Future of Business conference.

Recently, one of Huang’s top lieutenants, Bryan Catanzaro, who leads Nvidia’s applied deep learning research, told Yahoo Finance working at the company “feels existential every day.” “It doesn’t matter what the market cap is. We feel like the company is going to go bankrupt tomorrow,” said Catanzaro, who has been with Nvidia since 2008.

Huang believes that to survive in a rapidly evolving industry like semiconductors, a company needs to stay as alert as possible to even the weakest signals coming from unexpected places. For instance, a research paper in biology can potentially change computer science. “You want to be able to see the movements in adjacent fields or even unrelated fields and somehow distill it back down to first principles and extrapolate it to useful applications and other domains,” Huang said.

Huang is known for making expensive and risky bets on innovative products, including Nvidia’s now hugely popular graphics processing units, or GPUs, which power the heavy-load computing of A.I. applications. In its 30 years, Nvidia has faced dire situations, such as running out of cash multiple times because of its bold product strategy.

“We have the benefit of building the company from the ground up and having not-exaggerated circumstances of nearly going out of business a handful of times,” Huang said at today’s event. “We don’t have to pretend the company is always in peril. The company is always in peril, and we feel it.”

He added, “The company doesn’t need assurance that it will do well in order to do our best work. I think the company living somewhere between aspiration and desperation is a lot better than either [being] always optimistic or always pessimistic.”

Right now, one of Nvidia’s biggest challenges is the U.S. government’s restriction on selling some advanced A.I. chips to China. It’s estimated that the policy, first introduced in October 2022 and increasingly strict, would cost Nvidia billions in lost revenue annually. But Huang has no plans to give up on the Chinese market.

“The restriction is a capability restriction; it’s not an absolute restriction,” he explained. “The limitations are related to the performance levels of our GPUs. The first thing we need to do is to comply with the regulation and understand what the limits are and, to the best of our ability, offer products that can still be competitive.”

The real challenge, Huang said, is that China has a lot of local competitors who make the same type of chips Nvidia is allowed to sell there. “It’s not easy, and competitors are moving quickly. It’s like anything else that you gotta stay alert and do the best you can,” Huang said.

Jensen Huang Says Nvidia ‘Is Always in Peril’ Despite Trillion-Dollar Valuation