299: The Nvidia Story: Stephen Witt’s The Thinking Machine

Dear friends

You’ll remember, I hope, that this year’s newsletter schedule is a little different: it arrives weekly for three months, then doesn’t for a month. That is because I am, foolishly, trying to write something that might become a book (one day in the far distant future it seems. Don’t ask when or what). The non-newsletter month exists so that I can focus on that project, and it is that time again. We’ll meet again on 6 September.

Because of that, this letter goes a little longer and links out to more material than usual. I hope it gives you enough to work with over the next few weeks.  

Writing this week’s letter was an exercise in humility. In December, I read Stephen Witt’s The Thinking Machine: Jensen Huang, Nvidia, and the World’s Most Coveted Microchip. It had just won the FT’s Business Book of the Year and is about one of the world’s most influential companies. I read it, thought it was interesting but not that interesting. Then, this week, I returned to it and realised that my first impressions were wrong. So, here we go…

/strategy
The reason for my first impression scepticism was that yes Nvidia is massively successful and has made several people many billions, but the founders weren’t driving the development of AI which was what supercharged their business. Their work intersected with that work which then became the market madness we’re currently witnessing. A good company, maybe even a great one, but with a seemingly large dollop of luck.

However, my second reading put that aside. Stephen Witt’s book is lesson-filled (especially if you work for a founder).

Witt contrasts Huang’s approach that of Elon Musk. Musk, he says, starts with the vision – how do I get to Mars? Huang does the opposite: “…he started with the capabilities of the circuits sitting in front of him, then projected forward as far as logic would allow. Only there, at the frontier of reason, would he allow himself to take a single step forward into the nebulous realm of vibes”.

As Huang does that, he a mental model he calls the ‘speed of light’.

Witt elaborates, “‘Speed of light’ did not mean, as one might assume, to move quickly. Instead, Huang encouraged managers to identify the absolute fastest that something could conceivably be accomplished, given an unlimited budget, and assuming that every single thing went right. (For example, traveling from New York to London at the “speed of light” would involve perfect weather, zero traffic, and a supersonic plane.) Managers could then work backward from this unachievable constant to realistic but still impressive delivery times”.

We can’t all envisage the future. We can all work with what we’ve experienced and know. It is simpler. A known quantity, we have lived it. But our familiarity tends to make us conservative and leaves us fiddling around the edges; Huang’s approach integrates vision and reality. The combination is powerful.

Huang is an avid reader (more on that below) on all things business. Clayton Christensen’s The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail is a book he valued.

Witt describes it as a “counterinsurgency manual for senior managers at stagnating firms”. Part of Christensen’s argument is that established firms neglect marginal customers, but it is precisely there that the future might emerge. As Christensen put it, “One of the reasons managers at established firms find it difficult to serve emerging markets is that their investors and customers tell them not to.”

For Huang and Nvidia this meant focusing on scientists: they needed massive compute power, didn’t have much money, and constituted an intriguing intellectual challenge. It was this focus that ultimately meant that Nvidia was the frontrunner as LLMs gathered momentum (TJ Strydom’s book on how Capitec disrupted South African banking is a superb account of a business applying Christensen’s insights).

Whilst ‘speed of light’ had a specific Nvidia meaning, they are also known for their speed of operation, having shipped new chips more or less every six months for years.

When a highly skilled coder joined Nvidia he observed “The code was crap, the tool-chain was a mess, and the thing was, they didn’t give a shit! They didn’t give a shit about anything but the next tape-out.”

But he reflected, “There was a bizarre brilliance to it all: just iterate, iterate, iterate, execute, execute, execute, the way I see it now, tech debt is the battle scar of the Survivor” and, speaking about his previous company, “In the time we spent making it clean, we went out of business”.

Corporate life tends to quash this kind of scrappy agility. As does, almost counter-intuitively, success: no-one wants to be the one that fails (Read here how Pixar encountered and then dealt with this).

Rituals like ‘ship every six months’ or ‘meet X clients a week’ help counter excellence-atrophy (Culture That Works has some useful tips).

Alongside this, Nvidia had a collaborative and open culture.

Writing about Nvidia Chief Scientist Bill Dally, Witt observes, “Dally published many of his discoveries in academic journals for public consumption and with no financial reward. Often, he coauthored papers with engineers at AMD and Intel. Dally’s openness surprised a lot of people and sometimes led to pursed lips inside Nvidia, but Dally was playing the long game: he figured it was better to advertise what he was doing to other leading scientists so that they would come to work alongside him. ‘We’ll get the best academics to join the company because they’ll see our publications,’ he would say. ‘The quality will speak for itself.’”

A relentless commitment to operational excellence allows generosity. Effectively you can collaborate confident that you can’t be caught, whilst reaping all the benefits of a permeable knowledge system.

Huang, like almost every successful founder I have worked with or learned about, eschewed the business school myth of the person who ‘hires and leaves alone’.

Extensive research, and experience, tells us that, yes, people want space to work, the best jobs leverage their strengths and give them growth. Being micro-managed is awful. But, being ignored (left alone) is even deadlier.

Witt tells us, “Sometime around 2020, Huang asked everyone at the company to submit a weekly list of the five most important things they were working on. Every Friday from that day forward, he received twenty thousand emails. Brevity was encouraged; Huang would randomly sample from this pool of correspondence late into the night. In turn, he communicated to his staff by writing hundreds of emails per day, often only a few words long” (this parallels Campbell Soup CEO, Douglas Conant’s weekly ritual).

Intense engagement, done in the right way, is transformative.

Huang is notorious for tough and public feedback. His principle: make it visible so everyone learns. This is a tricky one. Harshness undoubtedly damages. However, ironically, when you have people around you committed to personal growth, it can be an accelerant, as long as it enables that: their growth.

One of NVIDIA’s engineering leads observed, “Very rarely does Jensen make significant changes as a result of execution issues. He’s very conscious of having an even slightly chilling effect on people’s willingness to take risks and innovate. As a result, his level of forgiveness for even the largest screw-ups is extremely high. He will berate you; he will yell at you, he will insult you—whatever, he’s never going to fire you.”

On one occasion, Huang asked an employee to refund him the salary he had been paid. Years later, when the same person was diagnosed with a serious medical issue, Huang offered to pay in full, out of pocket, for his treatment.

Witt observes, “Of more than a hundred former and current Nvidia employees I spoke with for this book, almost all had a tender story about Huang to relate”.

As a system, these are powerful: public feedback that everyone learns from, more-or-less certainty that your job is safe and moments of careful attention that demonstrate you are seen and cared for.

Witt concludes, “The appeal lay in what Nvidia allowed you to achieve. It was not a secret that Huang pushed people hard. Thus, he attracted determined workaholics seeking to establish legacies as inventors. In the same way that a bestselling author didn’t stop writing, even many wealthy Nvidia engineers kept showing up to work each day to attack difficult technical problems. Those engineers collectively held more than fifteen thousand patents, but there was always something left to build.”

I smiled at this observation: “Jensen contradicted himself frequently, sometimes offering opposing viewpoints within the same interview. He wasn’t playing devil’s advocate, exactly—he just liked to attack ideas from both sides”.

A colleague elaborated, “He’s not trying to be a politician, he’s not trying to stay on message. He’s trying to process real-time input, and he’s willing to entertain a contradictory thought for a while.”

Our human desire for certainty makes us judgy about those who change their minds, yet it is the very essence of effective strategy. You learn, you iterate, you evolve (You might find Think for Yourself useful).

//self
Huang’s seeming inconsistency is in fact adaptability emerging from ongoing learning, a commitment to self-improvement.

A former colleague “recalled Huang at LSI, pushing the simulation software to its outer limits” and added, “Now, he’s still doing the same thing, but what he’s engineering is himself. He was not born as a great CEO; he was not destined to be one. He transformed himself into one, just by abstracting! Just by problem-solving the inputs and outputs of what a good CEO should be.”

I am lucky enough to work with many phenomenal leaders, and they all share a foundation of technical excellence combined with an insatiable curiosity about what makes humans human and what it takes to lead in complexity.  

Witt tells us that Huang is known for an encyclopaedic knowledge of business books.

An Nvidia employee recalled Huang arguing with another executive about how much Nvidia’s products should cost: “‘The guy had an MBA, but he’d never read a book about pricing,’ Diercks said. ‘Jensen had read probably ten or fifteen.’ As the argument progressed, Huang halted the discussion and asked the MBA to name his three favorite books on pricing. The guy fumbled around for a bit, unable to name a single title. Huang listed out his three favorites, then told the executive he’d resume the discussion once he’d finished them.”

Well, yes.

Because we’re not together for the next month, I thought you may appreciate this.
Huang’s self-engineering happened, in part, through reading — so if you’re doing your own architectural work, you may find this useful.

My reading is shaped by the topics my clients are grappling with. I’ve done this for long enough to know that if they are, then you probably are too. This year, their most pressing concerns have been these, and these are the books I’ve found most useful:

1. Building a life and career with intention: Dana Williams’ Toni at Random: The Iconic Writer’s Legendary Editorship, Robert Waldinger and Marc Schulz’s The Good Life: Lessons from the World’s Longest Scientific Study of Happiness, Bill Burnett and Dave Evans Designing Your Life: How to Build a Well-Lived Joyful Life, Herminia Ibarra’s Working Identity: Unconventional Strategies for Reinventing Your Career and Jim Collins’ What to Make of a Life.
2. The Complexity of Corporates: Dan Davies’ The Unaccountability Machine: Why Big Systems Make Terrible Decisions—and How the World Lost Its Mind and John Kay’s The Corporation in the Twenty-First Century: Why (Almost) Everything We Are Told About Business Is Wrong.
3. Thinking better and avoiding cognitive bias: Roger Martin’s A New Way to Think: Your Guide to Superior Management Effectiveness, John Kay’s Obliquity: Why Our Goals Are Best Achieved Indirectly and Shane Parrish’s Clear Thinking: The Art and Science of Making Better Decisions.
4. Critical Thinking to Create Space: adrienne maree brown’s Emergent Strategy: Shaping Change, Changing Worlds, Ben Okri’s A Way of Being Free, Milan Kundera’s The Art of the Novel: Milan Kundera’s Essays on the Philosophy, Evolution, and Essence of Fiction, and Ngũgĩ wa Thiong’o’s Decolonising Language and Other Revolutionary Ideas.
5. Socio-economic systems and what they mean for leadership and life: Ezra Klein and Derek Thompson’s Abundance and Dan Wang’s Breakneck: China’s Quest to Engineer the Future.  
6. Being Human in Complexity: Claude Steele’s Churn: The Tension That Divides Us and How to Overcome It, Jennifer Garvey Berger’s Changing on the Job: How Leaders Become Courageous, Wise and Steady in an Anxious World, Lebo Diseko’s The House at 6001: A Memoir of Uprising and Exile and Antjie Krog’s Blood’s Inner Rhyme.

I hope you find something there that is useful to you.

/// soul
This may strike you as a strange soul choice, but I found it weirdly comforting. Starboard, an activist investor firm known for their meticulous attention to detail, owned a small Nvidia stake, about $62 million.

Disagreeing with Huang’s approach they exited in 2014. Had they stayed, their stake would, today, be worth roughly $37.32 billion.

We all make mistakes.

I’ll see on the 6^th of September.

All the best

Karl
PS: If you’d like me to facilitate Huang style book-based learning for your executive team, please email me on coaching@karlgostner.com and if you’re interested in working with a coach like me, you can learn more about my approach here.