Huang recalled the pivotal and harrowing events during an episode of the Acquired podcast, recorded at Nvidia's headquarters and published back in October 2023.
At the time of that recording, Nvidia was worth about $1.1 trillion. Today, it’s worth around $4.7 trillion, making it the most valuable public company on earth — a position it reached after becoming the first company ever to top a $5 trillion valuation in October 2025.
Considering Nvidia’s wild success, it’s easy to forget that it was all built on a gamble, or perhaps a wish and a prayer.
The one-shot chip
To understand the risk, you have to understand what "taping out" a chip means. In semiconductor design, taping out is essentially the point of no return: It’s the moment a company sends its finished blueprint to a factory to be manufactured, or "fabricated." Fixing a mistake after that means starting a fresh production run, which costs money and months most startups honestly don't have.
The normal process, Huang explained, is iterative: you build the chip, write the software, find and stamp out any bugs, then tape out a corrected version. Repeat as needed. But 30 years ago, Nvidia couldn't afford to repeat anything.
"If we only had six months and you get to tape out just one time, then obviously you're going to tape out a perfect chip," Huang said.
Huang had a darkly hilarious answer when his engineers asked how he could possibly know the chip would be perfect: "I know it's going to be perfect because if it's not we'll be out of business. So let's make it perfect."
The workaround was emulation. Nvidia would use software that mimics how a physical chip will behave before any silicon exists, so Huang found a struggling company selling exactly that tool and bought its inventory right then and there, on the spot, with about half of the company’s remaining cash.
Huang remembers the emulator being painfully slow. He said his software team wrote the full stack and ran it while they sat in the lab, waiting for a single frame of Windows to render at roughly a frame a minute. But it let the team virtually prototype the entire chip, run every game and application they had, and catch bugs before committing to production.
"If you're going to tape out a chip and know it's perfect, then what else would you do?" Huang said. "The answer obviously go to production and marketing blitz." So Nvidia skipped the prototype stage entirely and went to TSMC, the Taiwanese foundry that is now the world's largest chipmaker, for manufacturing.
