Keynote Adress: Kelley Engineering Center Grand Opening Ceremony

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By Jen-Hsun Huang
October 29, 2005

Thank you very much Terri. That was a very generous introduction. Dean Adams asked me to give the keynote address for the opening of this amazing building, and I remember being quite concerned about it and quite reluctant for, frankly, very good reasons. Number one, this is a very important day.  This is a very important day for Oregon State.  This is a very important day for the engineering school that I care very much about, and frankly, this is a very important day for all the students that are going here. And I didn’t want to screw it up.  The second reason is because the primary audience here today are the students. I was supposed to spend ten minutes talking about something that you guys would take with you and make useful.  And I didn’t want to screw up your lives. And the last part of it was I understand I was going to be speaking behind three politicians who are trained to be public speakers, and as you guys have witnessed already, they’re quite impressive.

I also learned something today.  I learned that it’s possible for a politician to lie three consecutive times and pass the lie detector test. No technology is good enough. So that’s what I’m going to do.  I’m going to talk about some of my life experiences and hopefully pass along to the future graduating students some knowledge that I’ve collected along the way. And also, to add my support to the building because it is something that’s really important and I’m going to give you some life examples of why it is what I consider the innovation imperative and why your lives are going to be much more challenging than ours, frankly.

There are many events in my life that have shaped me.  Going to [boarding school in] Oneida, Kentucky was very important to my development but [my time here at Oregon State was] certainly the time when the most important things happened to me.  I came to Oregon State when I was 16 years old.  When I was 17, I was in a class of about 200 or so other type A electrical engineering students and there was one girl.  And so the thing that I’m really excited about now with Terri here is the competition for all of you up there is going to be a lot less daunting.  But you have to understand I was 200-to-1 odds.  So my pickup line had to be impeccable.  So it was, “would you like to see my notes?”  That worked then, I’m not sure it’s going to work now.  I guess I was 17 when I met Lori and she was 19. Her birthday is in January, my birthday is in February and so she was two years older than I was.  I never had to ask her out for a date because we were able to manipulate the doing the homework together; we were in the same lab groups, so we had to be together. And before you knew it, we spent more time eating Doritos chips, and then of course, you know, “are you hungry?”  And then before you knew it we got married.  And so you could say that I’ve learned the art of seduction pretty early on in my career and the art of seduction is very important in leadership because leadership is about convincing people to follow your vision.  And Dean Adams is quite a seductive man as you guys have witnessed.

So as I graduated and went onto AMD, I was a type A, highly focused engineer, and I believed deeply that design was going to be my future.  That’s what I’ve always wanted to be was a design engineer. And so I went to AMD Design Microprocessors and there was a small company that started and one of my office mates went to a company called LSI Logic.  They wanted to reinvent the way people designed chips.  They wanted to create technologies that made it possible for system engineers to even design chips. And at the time it was really unheard of and she convinced me to go to this small company called LSI Logic and there was probably the second most important career influence on me.  There I realized that in order to build the right products you had to have deeper perspectives than just your particular discipline.  I was working with systems engineers and software engineers, system architects as well as chip design engineers in order to create next-generation computers. 

I was fortunate to have been asked by the management team at LSI Logic to go to a small company at the time called Sun Microsystems to sit in their offices and work with their engineers to build, what at the time was called Campus One, which eventually became the Sparks Station One. And the tall German turned out to have been the founder of Sun Microsystems, Andy Bechtolsheim.  And so there, I spent quite a bit of time, about two years, working with the engineers at Sun Microsystems, learning about system design, learning about system software.  I came back with a very different perspective about how to build great products. I came back with a different perspective about how to develop strategies and what it is like to be an entrepreneur.  In fact today, as I was listening to one of the speeches I learned another great entrepreneurial idea; gender sensitive technology.  If we would have spreadsheets for male and female, for the male, it would tally down to scientific notation.  For the female, the bottom line would be: you still have plenty of money to go to Nordstrom. So that’s the difference.

At LSI Logic, my career started to transition from deep design into an area that companies call application engineers.  It is the technical person out in the field, the guy who’s spending time with customers, trying to develop relationships and solve the customer’s problems. When I was asked to go do that, my initial reaction was this is not a very respectable job. This is not as interesting as engineering.  In retrospect, I learned a lot about applications and the reason for that is because in fact it’s where technology meets the customer.  Where technology meets the market. Sam Palmisano said that innovation is the intersection between invention and application.  In fact, he’s saying that exact thing.  It’s not about invention’s sake, it’s not about technology’s sake, but it’s about solving customer problems.

When I was dating Lori, she reminds me that I said, while we were still here in school, that by the time that I was 30 years old, I would be the CEO of a company. Now, I’m sure I was just trying to impress her. I had no plans, and frankly, I don’t think I had any desire to be a chief executive officer.  And I didn’t know what it meant anyways but it sounded pretty sexy.  So clearly, it must have worked.  On my 30th birthday, February 17th, 1993, it was my first day at Nvidia. And I founded the company with two of my colleagues, two of my friends that were working on the Sparks station with me. Our vision was actually very simple. We felt that 3D graphics technology was going to be a very important technology for the masses because of the entertainment value of it, because of the eye candy aspect of it, and because of the ability to communicate so richly. That was it. Our mission statement was to develop technologies to transform the computing experience and hopefully transform every computer into a game console.  We were video gamers, that’s the way we were...when other people were on dates, my best friend and I--both of us came down to Oregon State, I went to Aloha High School--the two of us would go to the arcades at Washington Square or at Westgate Mall.  We would take all of our money and we’d spend our entire savings on Asteroids and Pacman and all of those kind of things.  And so what you love and what you enjoy doing does in fact make a difference in ultimately what you end up doing for a living.  

Our vision was just that simple. We wanted to build products that would touch the lives of millions of people.  It sounded silly at the time, it sounded a little bit too grandiose at the time, and frankly, the competition was quite daunting. Silicon Graphics was a multi-billion dollar company.  The finest engineers in the world were working at Silicon Graphics.  In fact my wife was working at Silicon Graphics and I was sleeping with the enemy.  It was, “so what did you do tonight honey? So how was your day honey?” And so, she quit shortly after that because she gave up.  She realized the imminent threat from three engineers with no money. So there we went, we started Nvidia.

In the beginning, we were alone.  We were the only startup working on that.  As with all great ideas, shortly after, everybody’s working on it. And we had 50 companies that we were competing against.  In our industry we’ve become lore and the reason for that is because we almost went out of business first; we started first so it stands to reason we almost went out of business first. We spent our money first.  But we didn’t and we turned out to be one of the leading graphics processing companies in the world today.  So the question is, how did that happen?  What were the skills that we applied and what was the insight that we had?

There was, I think, two insights.  The first insight that we had, was that this medium, if you will, had sustainable opportunity.  Not all digital mediums and not all technologies have sustainable opportunities.  Moore’s law is either your friend or your enemy, and in our particular case, we postulated that Moore’s Law was our friend. And that we really ought to step on the gas and continue to double down and build it twice as fast, twice as expensive, if you will, each and every generation.  In a way, it was a bit of a “build it and they will come” strategy, but it was a very deliberate “build it and they will come” strategy.  Our customers told us…so I remember going to Dell.  And I told Dell that we had built a 3D graphics chip and that this was going to be terrific for all kinds of applications in the future – there are no applications at the moment – but I understand that quite a good video game was going to be coming out. And so they laughed at me and they told me that the PC is for enterprise computing and that they had no interest. Gateway, on the other hand, was willing to try anything once. So we went over to Gateway and we sold them this chip and they told us that all graphics chips sell for seven dollars. And in fact, all graphics chips did sell for seven dollars. The graphics chip we wanted to sell was twenty-eight dollars. And the reason we were trying to sell it for twenty-eight was because it did cost me twenty.  Now this was before I learned business folks. I would have been delighted to sell it for twenty-seven, or twenty-six, or anything more than twenty. Learn gross margins before you guys leave. The goal of making a profit, as it turns out, is so that you can play again. It is just like pinball, it is just like Asteroids. The goal of winning is so that you can play again. And so the goal, of course, of gross margins is so that you can re-invest it.

Shortly after of course, it turned out to be a huge success.  Dell came back to us and said, “we’d be delighted to buy your products now at twenty-eight dollars” and of course we were sold out. We built it as fast as we could.  I came back the next time and I said we have a new chip for you and we’re really excited about it and this time the price is forty dollars. And they said, “forty dollars? Twenty-eight dollars is the most anybody’s ever paid for graphics.”   So we were sold out at forty dollars and then we came back the next year and I said that I’ve got a great graphics chip that is even better than the last one and it’s sixty-eight dollars. Well, the story kind of went on until about three-hundred and fifty dollars.  One time I went back and I said it was four-hundred and fifty dollars and I didn’t sell any.  So even great ideas have its limits.

And so that was the first one.  Just recognizing that there was sustainable opportunity and having the courage to double down, double down, double down, and building the product and spending millions and millions of dollars on R&D long before the customer gave you a purchase order. That was the first thing we did right. The second thing we did right, was recognizing that we weren’t building a graphics chip; that we were building, if you will, a graphics experience. And in order to deliver that experience, a lot of different components had to come to play. Software engineering, Terri’s already mentioned, architecture, chip design, system engineering.  But you’d be surprised to hear that we also included on our team, artists. And the reason for that is because it is ultimately an artistic expression if you will. It is a digital medium to telling a great story. That perspective was uniquely ours. That perspective, in our final analysis, was what differed us from everyone else. And the reason for that is this. You take any singular idea, you take it to its limit, Moore’s Law will take you there in a hurry. But in order for someone to want to buy something new, the consumer to buy something new, you have to delight them somehow, with something that visually looks different. And at some point, in order to bring a visually rich look, we needed to have the skills of artists to show us, what is the next big look? And in fact, each and every generation of our GPU’s, our graphics processors, had a next big look. Each and every generation looked fundamentally different than the last and nobody was telling us how to do that. There was no scientific equation, there was no fundamental logic about what people would like to see, there was no--at this point--no leaders to show us the way.  We were already spending much, much more in R&D than Silicon Graphics was. Our company was larger, our company was more valuable, and so there was nobody left to show us the way about where graphics was going to go. And so this is the time when I really realized that in order to bring great ideas to the marketplace, those market changing ideas that you had to collaborate across a lot of different functionalities.  That being narrow and deep wasn’t good enough anymore. Now it’s still important to be narrow and deep, but it just wasn’t good enough anymore.

Now as I sit here and talk about our years at OSU and starting Nvidia, being the type of engineers that we were, the truth of the matter is, all of you that are going to be graduating are going to face far more daunting challenges than we ever did. I didn’t have to compete against China.  I didn’t have to compete against the hundreds of thousands of electrical engineers that were in India.  I fundamentally did not have to compete with the fact that internet makes the fact possible that work can be done anywhere. I just had to compete with all the other engineers in Silicon Valley and when I was here at Oregon State, I just had to compete with the other two hundred geeks and nerds.

The world is a different place now.  You guys are dealing with globalization.  The fact of the matter is you guys are dealing with international students who are passionate about academia. You guys are also dealing with something else that we didn’t have to deal with. Joe spent twenty-eight years at Intel and this makes perfect sense to him. Technology is now moving at a pace that is far, far faster, than in fact we had to experience even ten years ago. And then, it was moving pretty fast.  It is moving at blinding speed. And the reason, the implication of that is very much this; almost anything that you can think of to do, whether it’s a Wi-Fi chip, a digital cell phone chip, a DVD chip, high-definition DVD chip, DVD recorder chip, almost any chip, almost any computer, almost any device will be commoditized at Moore’s Law rate and some. Now to put it in perspective, you could build a DVD chip for about a buck…a dollar.  In 1996, a DVD player was seven hundred dollars. You can build a thirty-two bit microprocessor that is faster, several times faster than the first Pentium for twenty-seven cents.  The Wi-Fi chip was only invented a couple years ago; it’s practically free now. Gigabit Ethernet….thirty dollars and very few of you actually have it.  Thirty dollars…and now it goes for seventeen cents.

There is no technology that will not be commoditized faster than you can take your company public. That is the extraordinary daunting challenge you guys have. It is just lightening speeds.  Moore’s Law doesn’t come close to explaining and describing the challenges that you guys have. And so here you are in the light of internationalization, if you will, international students, their passion for academia, the fact that these schools all around the world are modeled after the great schools of our country. The fact that you have to deal with globalization, the fact that you have to deal with Moore’s Law.  So how do you fundamentally compete? I happen to believe that you need to have deep skills. You should, you must, achieve academia. And by the way, speaking of that, Dean, you know, considering Lori’s gracious gift yesterday, I was wondering if you could reconsider that Psych 201 grade?  I was thinking about innovation this morning, and collaboration and how you have to work with different departments. The thing that came to mind was I got a C in Psych 201.  Now frankly, I feel that that’s a little unfair. And let me tell you why.  I’m making an appeal for my grade and I happen to believe that my transcripts properly reflected the results that they should.  Imagine how far my career could go. And so here’s my logic.  The fact of the matter is if we’re going to collaborate between different types of disciplines, the Psych majors have to be more sympathetic to the electrical engineers. Now we do our homework in the wee hours of the night. I forget where that Psych class was, but it was out in the boonies and it was like at seven in the morning. What was that about? What was that about?  It was unfair.  And so anyways, there’s just that one matter of my transcript, if you could just have that fixed.

And so here you are facing these daunting challenges.  I happen to believe this:  the responsibility of the University is to create the engineers that will change the world of the next century, of the next decade, of the next era. And so what do those engineers look like and what is that perspective?  You know I talked to you earlier about my perspective and what really changed our company and set it apart.  Fundamentally, perspective/vision is what sets great organizations apart. And the perspective that Dean Adams and Terri have about collaboration, and that being the cornerstone of innovation, sets this university apart, sets this engineering program apart. I happen to believe that the work they are doing, and the structure, and the algorithm, and the architecture, and the perspective of their engineering program is spot on. And I know that you guys here, when I was seventeen years old, I didn’t want to hear a forty-year-old guy telling me about the future. But my present and the challenges of the industry will be your future.  And these are the challenges.  I happen to believe that these opportunities are pretty spectacular. 

I was asked about whether I’m concerned about China and India.  I am concerned about China. I am concerned about India. I am concerned about our ability to compete long term.  But here are some statistics and some evidence that this is the most innovative country in the world. They didn’t come up with the iPod. There are thousands of MP3 companies in the world. The MP3 player has been commoditized at lightening speed. And yet it took Apple to figure out how to turn the iPod, a commodity if you will, into a society transforming device. And the reason for that is because, look, he thought, and they thought, and innovated outside of the silos. That it wasn’t just about that iPod player. It was about the iTunes software.  It was about the iTunes store and commerce. About making it so that the content is protected and safe. So that people would be willing to put first run, first release music on there. They thought about industrial design so that the devices were cool and of course, they made the world’s best MP3 player. They weren’t the first MP3 player on the market. Another example, Google. I love the fact, well first of all, Google search is terrific. But Google labs is another example of innovation of the future.  Very rapid prototyping of ideas, putting it in the marketplace, and letting the market come back and tell them whether it is the right idea and whether they should pursue it further and how to correct it and adjust it. These are two innovative companies with innovative cultures and I don’t believe it’s possible to do this anywhere else in the world.

And so I happen to believe that all of you have daunting challenges, but I also believe that the opportunities are extraordinary if you have the right skills. If I could just leave you with a final thought and that is to dream big and to pursue it with a passion and to work on the things that you really, really love.  Learn how to not just be great problem solvers, which is the way that we were trained, but learn how to figure out, if you will, how to determine what problems to be solved. Determining what problems need to be solved, addressing that unarticulated need, is the future.  And we’re looking forward to seeing how you guys all turned out.