Business Model
Curators: Devansh Dhandania, Kasak Agarwal, Megha Agarwal, Somarko Basak & Surosmita Biswas
About the Company
Founded in 1993 by Jensen Huang, NVIDIA pioneered the GPU in 1999, revolutionizing gaming, graphics, and AI. With over 31,000 employees across 36 countries and $26 billion in Q1 FY25 revenue, the company leads in accelerated computing and industrial digitalization. NVIDIA operates in key sectors like gaming, professional visualization, data centers, and automotive technology, and is widely recognized for transforming industries through its advanced computing capabilities.
Customer Segments
B2B (Business to Business): Datacenters, AI/ML enterprises, automotive companies, and healthcare sectors use NVIDIA’s advanced processors and software.
Gamers: Enthusiastic and loyal customers drive GeForce GPU sales, forming a major consumer base.
Automotive: Automotive manufacturers integrate NVIDIA’s DRIVE platform for self-driving and intelligent vehicle technology.
Customer Relationships
NVIDIA fosters strong relationships through:
Collaborations with cloud providers (e.g., AWS, Azure) and automotive manufacturers.
Engagement of game developers and AI communities through events, developer programs, SDKs, and ecosystem growth strategies.
Long-term contracts and co-development initiatives to foster innovation and customer loyalty.
Channels
NVIDIA’s products reach customers via:
Online stores and direct sales
Retail partners and authorized resellers
OEM (Original Equipment Manufacturer) collaborations
Cloud platforms integrated with AI tools for enhanced customer support and operational efficiency
Revenue Streams
Achieved FY2024 record revenue of $60.9 billion, up 126% YoY
Q4 revenue stood at $26 billion, growing 18% QoQ and 262% YoY
Net income reached $14.8 billion, reflecting 21% quarterly growth
Operating income totaled $34.1 billion, a 17% annual growth
Revenue sources include GPU sales (GeForce and Data Center), software licensing, automotive solutions, and professional visualization tools
Key Activities
Innovation and R&D: Focus on hardware (GPUs, custom silicon) and software (CUDA, AI frameworks)
Proprietary Technologies: Continuous enhancement of ray tracing, DLSS (Deep Learning Super Sampling), and AI-powered computation
Patent-backed Development: Extensive IP portfolio supports competitive differentiation and market leadership
Key Partners
Cloud Providers: AWS, Microsoft Azure, Google Cloud
Semiconductor Foundries & Suppliers: TSMC, Wistron Corp., SK Hynix
Partnership Contributions:
Hardware supply (GPUs, chips, memory)
Custom chip production and manufacturing services
Joint R&D initiatives in AI, computing, and autonomous systems
Semiconductor and electronic manufacturing services (EMS)
Cost Structure
COGS: $16.621 billion for FY24, a 43.06% increase from previous year
R&D Spend: $8.675 billion in FY24, marking an 18.2% rise from FY23
WACC: 8.65% — Cost of equity: 8.66%, cost of debt: 4.18%, weight of debt in capital structure: 0.28%
Major Investment Areas:
Advanced manufacturing equipment ($500M–$1B)
Intellectual property development ($500M–$1B annually)
Datacenter infrastructure ($200M–$500M per year)
Strategic acquisitions and ecosystem investments
Value Proposition
Gaming: Industry-leading graphics with ray tracing and DLSS for immersive, high-performance gaming experiences
Automotive: Powering autonomous driving with NVIDIA DRIVE and AI-based intelligent vehicle systems
Enterprise & AI: Supporting large-scale AI models, machine learning, and accelerated computing for enterprises
Sustainability & Scalability: Energy-efficient solutions that scale across industries from entertainment to medicine
Sources for NVIDIA Company Overview
https://www.nvidia.com/en-us/about-nvidia/corporate-timeline/
https://www.reuters.com/world/asia-pacific/wistron-says-new-us-plants-will-be-ready-nvidias-server-production-next-year-2025-05-16/
“>https://investor.nvidia.com/news/press-release-details/2024/NVIDIA-Announces-Financial-Results-for-Fourth-Quarter-and-Fiscal-2024/
https://www.tomshardware.com/pc-components/gpus/nvidia-posts-dollar26-billion-q1-revenue-amid-record-ai-gpu-demand-surge
