Many of the tech companies currently dominating the industry have great stories about how they got to where they are, and Nvidia is no exception, since one of their many stories tells how they could have disappeared as soon as the company was founded, e.g. issue defraud Sega. And it’s worth noting that the problem wasn’t really with the company itself, but with the product it wanted to develop, the dreamcast.
In recent years, NVIDIA has become one of the largest companies in the world, its development in the field of artificial intelligence has allowed it to rank among the ten companies with the highest profits in the world. But as we well know, everything is not a bed of roses and the company could have disappeared a long time ago, practically three years after its creation, for trying to create a device that was too advanced for its time.
The dreamcast, a console too advanced for the time
Avant-garde designs have always represented technology companies, ultimately it is a type of sector in which innovation is the order of the day, and the launch of a device that has not the ability to surprise users can lead to the shutdown of the company’s activities. Segahas always had complicated things in the video consoles Because even though there was a time when it was able to compete with other big companies, there was always a debate between being able to move forward or close the company.
By 1996, the company was already experiencing enough problems to cease at least one of its main businesses, the console business, because it was unable to keep pace with the technologies that its competitors had managed to develop. In an attempt to turn the situation around, they began to develop the dream broadcasta console including GPU They charged a company that had not been on the market for over three years, Nvidia.
Even though it is a recent company, Nvidia he already had enough achievements to convince Sega de que podían encargarse del desarrollo, por lo que firmaron un contrato para ello, pero las cosas no eran tan easy como parecían, y es que tras invertir una gran cantidad de tiempo y dinero en I+D, ne consiguieron presentar nada que mercie la penalty. This caused NVIDIA to almost shut down the company because it had invested too many resources into a product it was unable to make.
The power of friendship ended up being NVIDIA’s savior
Although it may seem strange, the main reason why NVIDIA ended up being saved was nothing more and nothing less than because Sega’s former US representative, Shoichiro Irimajiri, liked it and ended up give in to the demands of Jensen Huang, director of. NVIDIA, which demanded full payment of the contract. Actually, this payment was quite large, since it was five million dollars, but it didn’t turn out to be a big problem for Sega at the time, since they decided to go for it. ‘before and ended up paying for the services provided. by NVIDIA even if they did not achieve its goal.
This really allowed Sega, years later, to remain stable as they transitioned to finish console development, and the fact is that the money they gave to NVIDIA was not payment , but an investment. And years later, the company led by Jensen Huang, after managing to avoid bankruptcy, ended up returning the investment that had been approved by Shoichiro Irimajiri, but with a slight factor that changed things, namely that Over the years, NVIDIA had managed to triple the initial investment made, leading Sega to charge a total of $15 million for the investment made in one of the largest current companies in the world.
