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With NVIDIA's shares see sawing today after a rare valuation downgrade, a former AMD employee has shared how AMD almost bought NVIDIA during the 2000s when the personal computing wave was in its infancy. NVIDIA is now worth more than AMD and Intel combined, as the firm's dogged focus on GPU computing bears fruit, and it becomes the vendor of choice for businesses running artificial intelligence workloads.
However, in the 2000s, central processing units (CPUs) reigned supreme, and AMD and Intel were interlocked in tough competition. AMD, at the time, also had its eye on the future as it acquired GPU maker ATI, and had it not been for NVIDIA CEO Jensen Huang's insistence to remain CEO, it might even have bought NVIDIA.
AMD Would Have Bought NVIDIA In The 2000s If Jensen Huang Remained CEO Of The New Companies
The former AMD employee, Hemant Mohapatra, shared details of his time at the firm in the 2000s when AMD's only rival in the personal computing industry was Intel. Joining AMD when the stock was trading at $40, the engineer shares that at the time, AMD had made its first big win by launching a 64 bit chip with a better design than Intel. However, he added that AMD made its mistake by focusing too much on a pure play dual core chip design. At the same time, Intel relied on its logistics and marketing strengths to sell two cores joined together through an interconnect and sell the product as a dual core processor.
According to Mohapatra, when AMD finally launched a "true" dual core processor, it was too late, as Intel had already established a dominant place in the market. AMD tried to make up by launching a quad core processor, but Intel kept with its strategy and marketing prowess and won consumer interest by being first to the market.
During this time when AMD was transitioning from dual to quad core processors, the firm also set its sights on entering the GPU market. AMD acquired graphics card maker ATI in 2006 for a $5.4 billion price tag and re branded the products to its Radeon graphics lineup that it currently offers.
The decision to buy ATI wasn't well received by AMD's engineers, according to the former employee. He shared that the "internal joke" referring to the deal was "AMD+ATI=DAMIT," and in retrospect, he believes that AMD should have bought NVIDIA instead. AMD "tried" to do so despite the fact that NVIDIA's CUDA software was for a niche market, and most developers were focused on OpenGL instead.
Appreciating NVIDIA founder and CEO Jensen Huang's "very long term" thinking, Mohapatra outlined that during this time AMD also tried to acquire NVIDIA. Between 2002 and 2008 AMD was headed by the electrical engineer Hector Ruiz who was the firm's second CEO and took over the reigns from AMD founder Jerry Sanders.
Huang "refused to sell unless he was made the joint-company’s CEO to align with this strategy" of "HW and SW lock-in" through the CUDA architecture and NVIDIA's chips. AMD "blinked" at this demand, and as a result, "our future trajectories splintered forever," according to the engineer.
AMD never considered NVIDIA to be in the "same league" as ARM or Intel during his time at the firm. The engineer believes that Huang's propensity to keep "going harder" despite hurdles is responsible for NVIDIA's current state.
So now that Nvidia has far outstripped the market cap of AMD and Intel, I thought this would be a fun story to tell. I spent 6+yrs @ AMD engg in mid to late 2000s helping design the CPU/APU/GPUs that we see today. Back then it was unimaginable for AMD to beat Intel in market-cap… pic.twitter.com/bYCS5vY0QO
— Hemant Mohapatra (@MohapatraHemant) July 5, 2024
