Nvidia’s CEO, Jensen Huang, is concerned about the future of the company and does not want it to follow the same path as other fallen tech giants like Cisco and Sun Microsystems. Despite Nvidia’s success in producing GPUs for gaming systems, the company has faced challenges, including a failed attempt to develop software for self-driving cars.
Analysts have drawn comparisons between Nvidia and Cisco, both of which have been major players in transformative technology. Cisco, known for selling routers and networking equipment, experienced a dramatic rise during the dot-com bubble but saw its stock plummet when the bubble burst. The company announced layoffs and its share price fell by 90% by October 2002. Despite never reaching new highs, Cisco continues to operate.
Sun Microsystems, another cautionary tale Huang is considering, also saw a rise and fall during the dot-com bubble. The company’s operating systems led to a peak market capitalization of $200 billion in 2000, but it failed to pivot successfully into the software space. Huang aims to diversify Nvidia’s business beyond chips by expanding into cloud server rental and software, such as Nvidia AI Enterprise.
By learning from the mistakes of companies like Cisco and Sun Microsystems, Huang hopes to secure Nvidia’s future and avoid the same fate. It remains to be seen whether Nvidia’s efforts to diversify will allow the company to continue its success in the rapidly changing tech industry.
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