American History 1988
Chapter 411 - 400: Silicon Valley Blade King

Chapter 411: Chapter 400: Silicon Valley Blade King

In all of America’s top universities, Stanford is most recognized for its strong business atmosphere, a fact nearly universally acknowledged in academic circles.

As an official stance, Stanford University does not prohibit, and even encourages, faculty and students to venture into entrepreneurship.

This would be inconceivable at East Coast institutions like Princeton or MIT, where the true ivory tower prevails.

Thus, Stanford University has always been known for its openness, accommodating a diverse group of students: the academically intense, the bookworms, or those who seek education for networking purposes.

The root cause of this teaching style at Stanford is not a matter of choice; it is first and foremost a matter of survival.

Stanford University’s geographical location far away from the political center of America has resulted in it receiving a much smaller percentage of its total funds from the federal government, compared to famous universities in the East.

For example, in Dean’s School of Engineering, Stanford is comparable in size to its old rival, the Massachusetts Institute of Technology, but the former receives only about half the government funding of the latter.

This is not an isolated case; there is even a certain pattern to how much government funding universities apply for.

Attentive researchers might discover that the research funding from the federal government is inversely proportional to a university’s distance from Washington, D.C.

That is to say, the top universities closer to Washington D.C. tend to receive more funding.

This is caused by a variety of historical, cultural, and social reasons, a phenomenon known as "proximity to power."

Stanford’s location on the West Coast puts it at one extreme compared to Harvard and MIT.

Similarly, applying for government-funded research is not easy for many professors.

First, they have to write lengthy application reports, then go through multiple rounds of review.

During the review process, they also need to spend a lot of effort doing public relations with fund managers and peer reviewers.

In America, securing funding is much like getting money in China; interpersonal relationships are very important.

To obtain funding, some professors would invite relevant officials to visit their labs.

But for these government officials to travel all the way to Stanford on the West Coast just to attend a report is not an easy task.

Therefore, for all these reasons, the funding Stanford could secure from the federal government has always been limited.

So what to do? The importance of funding for a research university goes without saying.

Especially when Stanford was not yet well-known, support from the federal government was virtually nil.

Under these circumstances, Stanford found its own solution, which was to get money from the industrial sector.

Or rather, this represents an industry-academic-research model, where Stanford develops technology for commercial companies in exchange for their financial support.

In this blend of commerce and academia, Stanford’s style has naturally become more and more open.

As time went on, students who graduated from here, or professors influenced by this culture, gradually began entering the business sector.

Likewise, many companies that later collaborated with Stanford were founded by its alumni.

A very few of those who achieved significant success began to give Stanford substantial donations, which contributed back to the school’s academic research.

When Silicon Valley rose to prominence, successful alumni from Stanford also increased.

To express gratitude for their generous donations, and to further strengthen its industry-academic-research model,

Stanford established an office specifically to help entrepreneurial students build connections.

At the other end of the bridge were successful alumni in Silicon Valley, or entrepreneurs and investors who had interactions with Stanford.

Through this method, Stanford could find investors for some of its promising projects.

In some respects, it took on the role of a startup incubator.

Of course, projects with promising prospects were given priority to those alumni who had greatly helped Stanford.

This is one of the main avenues for Stanford’s funding sources, and it sincerely appreciates those generous alumni, always holding them in the highest esteem.

"President Casper, you are too kind," said Dean, who had originally not intended to cause such a stir.

But upon learning he would personally visit the entrepreneurship office, the current Stanford President, Gerhard Casper, insisted on dropping everything to accompany him closely.

"Dean, Stanford is very proud to have a student like you.

President Kennedy once told me that the greatest accomplishment of his career was signing your transfer application,"

President Casper referred to Kennedy, the former Stanford president, who had stepped down in ’92.

By that time, Bit Company was already public, and it had established a close cooperative relationship with Stanford.

"To attribute all my success to myself would clearly be biased; I understand how much help Stanford has provided in this process."

Dean owned so many companies; there was no doubt Stanford had supplied him with a large number of talented individuals.

This was a valuable resource in Silicon Valley and laid the foundation for the company’s growth and expansion.

"I am glad you feel that way," Casper gestured for Dean to walk ahead, "you really didn’t need to come personally.

Jeffrey would have personally visited you to report on the recent developments at Stanford."

As Casper finished speaking, a middle-aged man following by his side immediately nodded enthusiastically.

"Yes, that’s right, Mr. Price. I can visit you anytime at your convenience."

For these outstanding alumni, Stanford proactively updates them on the school’s news.

This includes achievements, challenges faced, or those promising but needy projects.

Dean had such a privilege, but he was too lazy to use it, "I haven’t been to the school for a long time, just taking a stroll."

"It’s a great honor." The smile never left Kasper’s face.

Soon, the group reached the startup office, where Dean also saw a familiar face.

"Mr. Price, I am Jensen Huang, CEO of NVIDIA Corporation."

Without Dean even speaking, a beaming Jensen enthusiastically approached him.

Yes, the potential project introduced by Stanford was the struggling NVIDIA Corporation.

Jensen had founded the company at the age of thirty, back in 1993.

At the time, he and the other two co-founders envisioned that the emerging wave of computing would prioritize accelerated computing, especially in graphics processing.

They believed this unique capability could address challenges that general-purpose computers couldn’t handle.

They also noticed that video games would be one of the most challenging computational problems and that the market would be substantial.

This meant that video games could be NVIDIA’s killer market, securing finances as long as they established a firm footing.

Valentine, who was leading Sequoia Capital at the time, favored such hardware-based companies and invested twenty million US dollars.

However, at that time, there were upwards of seventy companies in the same market segment as NVIDIA, including giants like IBM, Sony, Toshiba, and Sun.

Even some venture capitalists conjectured, "The market is nearly saturated; the outlook is bleak for new companies of this kind."

Of course, Jensen didn’t believe it and after toiling diligently for two years, he launched NVIDIA’s first product, the NV1 graphics card.

It was released slightly earlier than Windows95, and this timing put the NV1 in a very awkward position.

Because Windows95 launched the DirectX platform and refused to support any other graphics software except its own Direct3D.

So the result was self-evident, and the market gave Jensen a cold shoulder.

By then, the previously raised funds had been mostly spent; there was no choice but for Jensen to continue betting on NV2.

This graphics card had established a partnership with Sega before its design, but due to technical disagreements and the competition’s interference, NV2 came to nothing.

Two consecutive misfires left NVIDIA facing a painful dilemma.

Either continue developing inferior chips for Dreamcast, even though it was far behind the competitors, or dissolve NVIDIA and cut their losses immediately.

Fortunately, Sega’s president, Nyukou Shoichiro, seeing potential in Jensen, gave him another five million US dollars in investment.

With this money, NVIDIA began developing the third-generation graphics card, NV3, also known as RIVA 128.

Although Jensen believed he had found the right direction this time, developing this specialized chip was very costly.

Due to revenues falling short, NVIDIA had directly cut half of its staff this year, now maintaining only about 50 people in the entire company.

Even so, their funds inevitably dried up, barely enough to pay a few months’ salaries for the employees.

A sense of extreme desperation was spreading, and many employees’ tacit understanding each day at work was to calculate how long NVIDIA could last.

"Our company has thirty days until shutdown." This sentence almost became an unofficial motto.

Seeing that the development of RIVA 128 was at least half a year away from completion, Jensen became desperate.

Coincidentally, he heard about Dean considering investments in hardware, so Jensen immediately contacted Stanford’s startup office, hoping they could help him connect.

Being one of its alumni, although he hadn’t yet succeeded in his entrepreneurial efforts, leveraging some university resources wasn’t too much, right?

After evaluating NVIDIA’s project, a Stanford professor saw some potential and agreed to his request.

Then came today’s meeting, where Jensen knew very well that the person before him could be the lifesaver NVIDIA needed, so he was very enthusiastic.

"Just call me Dean; that’s what everyone at Stanford calls me." Dean scrutinized him carefully.

I hear you’re good with a knife? With your robust build, you certainly look fit for handling a large blade.

"About NVIDIA..." Jensen started, chuckling.

Dean waved his hand to indicate for him to pause, "I’ve gone through NVIDIA’s data, just tell me straight how much budget you still need."

Wow, is this the power of the world’s richest man? It’s shockingly impressive.

Although Jensen gasped in amazement at Dean’s "generosity," he was trembling with excitement inside.

This is clearly a man who isn’t short of money; today he had found the right person!

Jensen restrained the joy on his face and slyly extended one finger.

"Ten million US dollars, enough to complete the development of RIVA 128.

Of course, in return, NVIDIA is willing to offer a 10% equity stake."

"That’s too little," Dean said, shaking his head nonchalantly.

"What?" Jensen was taken aback.

"Thirty million US dollars, 20% of the shares, the rest considered as my overpaying purchase."

You’re asking for too little money, Dean indicated that he needed to increase the dose.

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PS: Thanks to @Leisurely Survivor for the Alliance Leader’s reward, the first one the author has received in two years of writing, much appreciated!