[NVIDIA People] "Almost Went Out of Business" Who Is the Japanese Person Saved by Jensen Huang?

Former Sega President Irimajiri Shoichiro
Faces Failure Crisis Due to Early Nvidia Misjudgment
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"That money was all we had. 'His' understanding and tolerance allowed us to live for another six months."

NVIDIA, which has dominated the world with its artificial intelligence (AI) semiconductors, is a company that was founded just over 30 years ago. Jensen Huang, the CEO who founded NVIDIA in 1993, has publicly mentioned several times that the company faced a crisis in the late 1990s, shortly after its establishment, when it had to consider shutting down. Huang recalls that it was the interest and trust of a Japanese engineer and businessman that prevented NVIDIA from closing down during this critical moment.

Japanese engineer and entrepreneur Shoichiro Irimajiri (Photo by SEGA)

Recently, The Wall Street Journal (WSJ) interviewed and reported on Shoichiro Irimajiri (84), a Japanese engineer and businessman who showed faith by investing in NVIDIA during its crisis. Currently running a personal consulting business in Tokyo, Japan, Irimajiri told WSJ, "NVIDIA’s existence holds a significant place in my heart."

The connection between Irimajiri and CEO Huang began over 30 years ago. At that time, Irimajiri was the president of the video game company Sega Enterprises, while Huang had just founded the startup NVIDIA.

Born in 1940, Irimajiri is a Japanese engineer and businessman who, after graduating from university, designed engines for motorcycle races such as the Grand Prix and Formula One at Honda Motor Company. Based on this career, he became the youngest director at Honda’s U.S. branch in 1984 and lived in the U.S. for four years. Due to severe stress-related health issues, he left Honda in 1992 and joined Sega, which was competing with Nintendo, in 1993. He became the U.S. branch president in 1996 and was appointed president of Sega in 1998.

At that time, NVIDIA was just a startup beginning its business in Silicon Valley. NVIDIA emerged at the turning point when graphics were shifting from 2D to 3D. Sega was actively developing the 'Dreamcast' console to compete against Sony’s masterpiece, the 'PlayStation.' During this period, Irimajiri met CEO Huang, and impressed by Huang’s passion and vision, Irimajiri decided to have NVIDIA participate in Sega’s Dreamcast graphics processing unit (GPU) business. NVIDIA received investment from Sega.

However, problems arose when CEO Huang made a risky decision early on. NVIDIA applied a groundbreaking technology different from other companies in the image rendering process, but it was later realized that this decision was mistaken. Due to the underperforming GPU, Sega’s console competitiveness inevitably declined. If Sega continued to do business with NVIDIA, it would be left behind in the console market; if Sega cut ties with NVIDIA, NVIDIA would inevitably go bankrupt.

Recalling this period in a graduation speech at National Taiwan University last year, CEO Huang described it as a "humiliating and embarrassing failure." He explained, "Either way, we were ultimately facing closure."

Jensen Huang, CEO of NVIDIA
Photo by AFP Yonhap News

At this time, Irimajiri stepped in. He visited NVIDIA’s office and said that Sega would use another company’s GPU for the Dreamcast console. However, he strongly expressed his faith in NVIDIA and CEO Huang by saying, "I want NVIDIA to succeed in any way possible." He reported to his company that "Sega must invest in NVIDIA" and persuaded his superiors to make an additional investment beyond the existing contract. As a result, Sega invested $5 million (approximately 6.78 billion KRW at the current exchange rate) in NVIDIA.

This money prevented NVIDIA’s closure and funded operations for six months. Based on this failure, NVIDIA eventually succeeded in developing semiconductors and was listed on the NASDAQ market in 1999. The following year, in 2000, Irimajiri stepped down as Sega president, and Sega later sold its NVIDIA shares for $15 million, making a significant profit.

Irimajiri and CEO Huang reconnected about 20 years later, in 2017.

While planning an AI-related seminar, Irimajiri found Huang’s email address from the past and sent him an email. He introduced himself as "someone who worked as your business partner in the 1990s" and expressed, "I believe you remember the days when we struggled together to develop advanced graphics semiconductors for the Sega Dreamcast. Those are among the happiest memories of my life." He also expressed hope that Huang or someone from NVIDIA would participate as a speaker. Irimajiri said he did not expect a reply.

However, within just one day, an email personally written by CEO Huang arrived. Huang said, "I am delighted to hear from you," and added, "Working with Sega in NVIDIA’s early days is also one of the happiest memories of my life." He mentioned that he was scheduled to visit Tokyo soon for an NVIDIA conference and would take the stage himself. Huang also wrote in the email, "I am grateful to be able to do something for you."

Founded in 1993 and listed on NASDAQ in 1999, NVIDIA has become a company at the center of the AI boom, attracting global attention. Its market capitalization surpassed $1 trillion last year and exceeded $2 trillion this year. With the rapid increase in demand for AI semiconductors, NVIDIA’s corporate value is also expected to exceed $3 trillion around next year.