Whether you are talking about autonomous cars, drones, robots, or static advanced artificial intelligence (AI) systems and supercomputers, NVIDIA is usually the one constant across those AI segments.
Even IBM, which is arguably the pioneer for AI development, works with NVIDIA for their advanced solutions.
NVIDIA wasn’t the first to see the opportunity for autonomous cars. But it pivoted so aggressively toward the opportunity, it’s considered a pioneer of the technology — because it was one of, if not the first, to see the potential for it in drones, robots, and other AI applications.
What makes NVIDIA different is that its founder, president, and CEO, Jensen Huang, hasn’t yet become distracted by his own compensation. Instead, Huang is a founder who remains wedded to his company’s success and is willing to make big bets with the resulting big risks. And he seems to “fund to the requirement” of an initiative more often than his peers.
Let’s talk about why NVIDIA is so successful with AI.
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CEOs: Founders vs. External Hires
For several reasons, company founders generally lose interest once their companies move from their startup phase and mature into a more stable company. This is for several reasons: they become massively wealthy; wealth gives them freedom to do other things they’d rather do; the fun of the startup is replaced by the headaches of a public company, like fights with “activist” investors; and their knowledge ages out, and they don’t have the time or interest to retrain.
Founders have unique protections afforded them by their status and the loyalty of a staff they had a major hand in hiring. They understand their company better than others because they built it. They often maintain some part of their startup mentality, allowing them to take risks. And those “activist” investors are often overmatched by a founder in terms of influence.
Hired CEOs, particularly those who come from outside the company, don’t enjoy the knowledge, loyalty, or drive that a founder does and can be more easily distracted by the perks of the job. More importantly, they are less willing to risk those perks by taking risks. Far too many hired CEOs don’t even understand the market they’ve been hired into. Apparently, company boards seem to think that CEO is a generic skill set.
Jensen Huang personifies a trifecta in that he has remained focused on the business, current with the technology, and he has the inherent loyalty of his people, which allows NVIDIA to outperform its peers consistently.
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Anticipation and risk taking at the Top
Autonomous robots were highlighted years ago at a Dell event as being one of the next big things in technology, but NVIDIA ran with that opportunity while Dell did not. This is the nature of risk taking, being able to not only anticipate a future opportunity but going all-in on it, so the success of the effort is more likely.
One of the recurring problems with CEOs is that they will approach a new opportunity tentatively to minimize risk, or they will fund to their expectations rather than fund to the requirements of a project.
When Jensen Huang decides on a direction, he appears to fully support it. And while he isn’t always successful, he is far more successful than he would be if he regularly underfunded these efforts. The result is that we know him for his successes, while other CEOs are often defined by their failures. Huang is both willing to take necessary risks and isn’t tentative in execution.
With both the iPod and iPhone, Steve Jobs acted similarly. This approach was so unusual that his competitors were convinced he would fail. The difference was that Jobs, like Huang, was willing to fund success, and failure simply wasn’t an option, while their peers often either don’t take the risk to begin with or seem to anticipate failure and work to assure the resulting blame doesn’t fall on their desk.
In short, NVIDIA, as successful as it is, could still be just a fraction of what it will eventually become.
But that coming success will remain grounded in successful risk taking, funding to success, and both technical and operational competence by its leadership.
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