Three decades ago, Sega was trying to build a graphics chip for the Dreamcast. Nvidia was a struggling young semiconductor company fighting for survival.
Then Sega made a decision that would eventually become one of the most remarkable bets in technology history.
Former Sega president Shoichiro Irimajiri has revealed that he persuaded Sega executives to invest $5 million in Nvidia after becoming impressed by CEO Jensen Huang, helping give the then-struggling chipmaker enough time to develop the technology that would eventually transform the graphics industry—and later become central to the artificial-intelligence boom.
The Nvidia deal that could have ended very differently
In a Sept. 12, 2026 interview with Jiji Press, Irimajiri, now 86, recalled how Sega became involved with Nvidia during the 1990s.
Sega had contracted Nvidia to develop a graphics-processing unit for its next-generation console, the Dreamcast, which was being positioned to compete with Sony’s PlayStation.
But Nvidia’s technology failed to meet Sega’s requirements. The development project was ultimately canceled, and Sega moved in another direction for the Dreamcast’s graphics hardware.
For Nvidia, however, the failed project was potentially catastrophic.
The company was struggling financially, and Jensen Huang personally approached Irimajiri after the setback. Instead of simply walking away, Sega agreed to convert approximately $5 million connected to the existing contract into an equity investment in Nvidia.
Irimajiri said his decision was driven in large part by his confidence in Huang.
“I came to like Jensen Huang’s character, and bet everything on him,” Irimajiri said.
From near collapse to an AI powerhouse
The investment gave Nvidia additional breathing room at a critical moment.
According to accounts of the episode, Nvidia had been left with only about a month of cash after its early technology strategy failed. The Sega investment provided the company with roughly another six months to survive and redirect its engineering efforts.
Nvidia subsequently developed the RIVA 128, a graphics processor based on triangle rendering technology. Released in 1997, the chip sold about 1 million units within its first four months, helping put Nvidia on a dramatically different trajectory.
Nvidia went public in 1999, while Sega eventually sold its investment for roughly $15 million, according to accounts of the deal.
That means Sega’s $5 million lifeline ultimately generated about three times its original investment—but the larger significance was what Nvidia became afterward.
The twist: Sega rejected Nvidia for the Dreamcast
There is an extraordinary irony at the center of the story.
Sega helped keep Nvidia alive, yet Nvidia’s graphics technology was not ultimately used for the Dreamcast after the companies’ development project failed.
The Dreamcast instead used graphics technology associated with NEC and PowerVR. Nvidia subsequently concentrated on graphics processors for PCs, eventually developing products that helped establish its position in the gaming and graphics markets.
In other words, Sega’s decision did not produce the Dreamcast graphics solution it originally wanted.
It may have helped save the company that would later become one of the most important technology companies in the world.
Jensen Huang still remembers the favor
The story resurfaced dramatically during Huang’s 2026 visit to Japan.
During events in Tokyo marking more than three decades of cooperation between Nvidia and Sega, Huang publicly acknowledged the role Sega played in Nvidia’s survival. He reunited with Irimajiri and other Sega figures in Tokyo as the two companies looked back on their unusual shared history.
Nvidia itself described the relationship as a collaboration spanning more than 30 years. The companies are now working together again, including plans to bring Sega titles such as Virtua Fighter Crossroads to Nvidia’s RTX Spark platform.
That makes the story even more striking: a failed 1990s console-chip project eventually evolved into a decades-long relationship that has returned in the age of AI.
From video games to the AI revolution
Nvidia is now far removed from the struggling startup Sega encountered in the 1990s.
The company has become a dominant supplier of accelerated computing technology used to train and operate modern AI systems. Reuters reported this month that Nvidia’s market value had reached roughly $5 trillion, highlighting just how extraordinary its transformation has been.
At the same time, Nvidia is deepening its presence in Japan beyond gaming.
During Huang’s July 2026 Japan visit, Nvidia announced or highlighted collaborations involving Japanese companies in robotics, manufacturing, automobiles, telecommunications, healthcare and scientific computing. Nvidia and Sega also marked their long relationship by showcasing Sega games on RTX Spark.
Nvidia is also working with Japanese robotics and manufacturing companies as the country pushes toward what Huang calls physical AI—systems that combine AI with robots, machines and real-world environments.
A $5 million decision that changed tech history
Sega’s original goal was simple: develop better graphics technology for a new game console.
Instead, one failed hardware project helped create an unlikely corporate relationship.
Sega did not get Nvidia’s chip for the Dreamcast. But by backing Nvidia when the company was close to running out of options, Sega gave Huang and his team time to try again.
That second chance ultimately contributed to Nvidia’s rise from a struggling graphics-chip startup to an AI infrastructure giant.
And decades later, Huang is still publicly thanking the people at Sega who helped make that survival possible.
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