NVIDIA's earnings report for Q2 comes out today, August 28, 2024. CEO Jensen Huang has everyone awaiting his comments and watching his every move, with a potential market reaction of +/-9%. His reports could potentially give the all-clear on the AI revolution NVIDIA has triggered – or alternatively, sound the alarm that we could be facing a bubble-scale hype in this sector. To get a sense of just how global this bated breath is, just tune in to Israel's leading financial YouTube, Micha Stocks, whose 100K+ audience won't stop talking about the hyperscaler's crucible. If this is the amount of interest in Israel, just imagine what the atmosphere is among those who actually work in the business. Micha Stock has been talking about NVIDIA non-stop and will even live stream the event, even though the vast majority of Israelis will be sound asleep when Jensen speaks on the reports.
Regardless of what emerges in those reports, NVIDIA's dominance is clear – as is the fact that nothing will stay the same: AI is here to stay – and we are going to benefit from what this company has managed to do both on Wall Street and on Main Street. The company has become a household name almost as much as Taylor Swift only over the past two years because ordinary people saw what it could do on their end – its chips are what fuel the chatbots that make each one of us grateful we don't have to do laborious tasks done by ChatGPT, Claude, and the likes.
But not many know that NVIDIA has been around since the early 1990s. Why has it only emerged now as a dominant force, shaping the future of data centers, AI, and gaming like no company has ever done before? Behind the Silicon Valley giant's meteoric rise lies a lesser-known but equally compelling story: The critical role of Israel in fueling NVIDIA's global strategy and technological innovations.
The turning point, according to many analysts, came in March 2019, when NVIDIA acquired Israeli company Mellanox Technologies for $6.9 billion – and never looked back. This bold move redefined NVIDIA's trajectory in the tech world. Mellanox's InfiniBand and Ethernet technologies proved vital to the future of data centers and cloud computing. By integrating these capabilities with its own GPUs, NVIDIA created a seamless, high-performance ecosystem capable of handling the massive data loads required for AI and machine learning.
The Yoqne'am-based Mellanox's founder and then-CEO Eyal Waldman, said at the time: "We share the same vision for accelerated computing as NVIDIA," adding that "combining our two companies comes as a natural extension of our longstanding partnership and is a great fit given our common performance-driven cultures. This combination will foster the creation of powerful technology and fantastic opportunities for our people." Mellanox's headquarters are on the foothills of Mount Carmel. The Bible tells us that on that mountain the Prophet Elijah performed the miracle of lighting water on fire to prove that the idolators were wrong and the monotheists were right; from that mountain, you can see Tel Megiddo, where many battles took place, and where Christians believe that Armageddon will happen and a new era will emerge in the end of times. That mountain overlooks the Jezreel Valley, and one can see Nazareth, from where Jesus' family hailed, and Mount Tabor, the site of his transfiguration, as well as many other sites associated with his life and times. How befitting and symbolic, then, that NVIDIA's revolution started on Mount Carmel; the end of times – from pre-generative AI to the current era – was sparked by a simple acquisition of Mellanox.
This was a match made from heaven, which helped catapult NVIDIA to the top-tier megatech world and make it a 3-trillion-dollar company and made Israel synonymous with its success, shining a digital spotlight on the Jewish state's Start-Up Nation once more. In fact, although NVIDIA has never been political, this bond between NVIDIA and Israel has been so close that during the recent war in the wake of the Oct. 7 atrocities committed by Hamas, the company has never tried to distance itself from the Jewish state, nor did it hide that one of its employees – Avinatan Or – was taken hostage (Noa Argamani, his girlfriend, was also kidnapped and her footage being violently taken shook many. She was heroically rescued by Israeli forces in July). NVIDIA has also helped Israeli and Palestinian civilians suffering by donating generous sums and has helped Israeli employees who had been called up to serve.
"Israel is one of Nvidia's largest hubs in terms of population ratio. It's also home to some of our most talented engineers. One of our most significant investments, NVSwitch, originated from Israel," CEO Huang emphasized this past March on why the company was giving its employees in the Jewish state a special bonus. He continued, saying that "I have 3,300 employees in Israel. We have nearly a hundred employees in Gaza and the West Bank, and our hearts are with all of them. The most important thing is, of course, to stay safe, and we try to support them as a company... To enable them to do their best work, they need a strong foundation. Nvidia is a robust company with unwavering support for our employees there. They should know that we will continue to invest in Israel and support them fully, regardless of their background." In fact, in a cruel twist of fate, Waldman, the Mellanox founder who sold the company to Huang in 2019, saw tragedy up close on Oct. 7: His youngest daughter, 24-year-old Danielle Waldman, was brutally murdered in the Nova music festival near Gaza by Hamas terrorists on that horrific day, along with more than 300 revelers who just wanted to dance.
NVIDIA's ties to Israel run deep, particularly in its collaborations other startups in Israel, as befitting the fact that its second largest development center outside the US is in the small New Jersey-size country.
Danielle Waldman (24) and Noam Shai (26), newly engaged, managed to escape the massacre at the Nova Party, when contact with them was lost. Danielle's family found her location on her iPhone, and arrived to see bloodied, bullet riddled car where the couple was murdered by Hamas… pic.twitter.com/l3T5vehFQi
— Yael Bar tur 🎗️ (@yaelbt) November 1, 2023
The company's influence in Israel extends beyond its own operations. NVIDIA has become a significant player in the country's vibrant tech ecosystem, particularly in AI and data science. This symbiotic relationship has been mutually beneficial: NVIDIA's investment in Israel has fueled its growth, while Israel's tech sector has flourished, solidifying the country's status as a global leader in innovation. NVIDIA's presence in Israel has not only amplified its own capabilities but has also reinforced Israel's position as a critical hub in the global technology landscape.
The combination of Mellanox, Oct. 7, the spirit of ingenuity, and, above all – common sense and vision – made Israel and NVIDIA inextricably linked. Perhaps one day, we can all look back at this partnership on Mount Carmel as one of the Big Bang moments of AI, akin to the spark that was ignited in the music world by the collaboration of John Lennon and Paul McCartney. For the time being, regardless of what these Q2 reports transpire in 2024, all we have to do is sit back and enjoy the ride. NVIDIA and Israel are here to stay, through thick and thin. Changing the world is hard, but it appears that NVIDIA's secret sauce is –at least partially – derived from good-old Israeli hummus and some Middle Eastern spice.
