Sega Dreamcast, known for iconic games like Shenmue and Crazy Taxi, almost put Nvidia out of business back in 1996. Despite the lack of success of Nvidia’s NV1 graphics accelerator, Sega approached the company to develop the GPU for the Dreamcast. However, Nvidia was struggling with their graphics technology, which differed from industry standards, and was unable to meet Sega’s demands. CEO Jensen Huang faced a tough decision: continue working on the chip and risk bankruptcy, or halt the project and save the company. In a surprising turn of events, then-Sega America CEO Shoichiro Irimajiri stepped in and invested $5 million in Nvidia, saving them from financial ruin.
Irimajiri’s investment gave Nvidia a much-needed lifeline, providing them with six more months of operation. Despite Irimajiri’s brief presidency at Sega and subsequent departure, the company sold the Nvidia shares he had purchased for a significant profit. This decision had a lasting impact not only on Nvidia but also on Sega, as the potential success of the Dreamcast GPU and the stakes in Nvidia could have changed the course of both companies.
Reflecting on the events of the past, Huang acknowledged the critical role Irimajiri played in saving Nvidia and expressed gratitude for his understanding and generosity. The story of the Dreamcast GPU serves as a reminder of the unpredictable nature of the tech industry and the importance of strategic partnerships and investments.
In conclusion, the unlikely alliance between Nvidia and Sega during the development of the Dreamcast GPU had significant implications for both companies. Irimajiri’s timely investment in Nvidia saved the company from bankruptcy, highlighting the importance of relationships and support in the competitive tech landscape. As Nvidia continues to be a major player in the graphics industry, the story of their near-collapse and rescue serves as a testament to the unpredictability and resilience of the tech sector.
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https://www.techspot.com/news/103083-how-dreamcast-almost-bankrupted-nvidia-before-sega-executive.html
