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Nvidia (NASDAQ: NVDA) ranks as one of the biggest companies on the planet, with a market cap of close to $1.2 trillion. It dominates the chip market for artificial intelligence (AI) and gaming.

And it’s in trouble.

At least, that’s what Nvidia CEO Jensen Huang thinks. Huang spoke at the Harvard Business Review‘s Future of Business live virtual event on Nov. 9. He told the audience that the company he co-founded in 1993 is “in peril.”

Nvidia’s perpetual state of peril

Huang doesn’t think Nvidia’s current state of jeopardy is anything new. He stated at the Future of Business event: “We don’t have to pretend the company is always in peril. The company is always in peril, and we feel it.”

The Nvidia CEO pointed out his company’s past brushes with ruin. Huang said, “We have the benefit of building the company from the ground up and having not-exaggerated circumstances of nearly going out of business a handful of times.”

But it isn’t just Nvidia that faces a perpetual threat, in Huang’s view. He declared that “there are no companies that are assured survival. If you don’t think you are in peril, that’s probably because you have your head in the sand.”

Huang’s words might sound familiar to anyone who has read former Intel CEO Andy Grove’s book Only the Paranoid Survive. That’s no coincidence. Huang told the Acquired podcast last month that he has “really enjoyed Andrew Grove’s books.”

A specific imminent threat to Nvidia

So what are the specific imminent threats to Nvidia? The obvious one is increased competition. In one respect, Nvidia could become a victim of its own success.

The company’s graphics processing units (GPUs) have been and continue to be in high demand, thanks largely to the surging interest in generative AI. This demand has been a key factor behind Nvidia’s stock skyrocketing more than 230% so far in 2023.

However, it has also opened the door even wider for potential alternatives to Nvidia’s GPUs. Advanced Micro Devices now has a hot new AI chip on the market. Amazon, Alphabet‘s Google, and Microsoft have all either already developed their own AI chips or are in the process of doing so.

Huang sounded especially concerned at the Harvard Business Review event about falling by the wayside in the huge Chinese market. The U.S. government has placed restrictions on the types of chips that U.S. companies can sell to China.

Nvidia is reportedly working on shipping three new chips to China that adhere to U.S. restrictions. However, selling chips with limited capabilities could still present a problem for the company. Huang noted last week: “It’s not easy, and competitors are moving quickly. It’s like anything else that you gotta stay alert and do the best you can.”

“Between aspiration and desperation”

Huang believes that his concerns about Nvidia are healthy. He stated at the Future of Business event, “I think the company living somewhere between aspiration and desperation is a lot better than either [being] always optimistic or pessimistic.”

Shareholders should actually be glad that Huang thinks Nvidia is always in peril. A worried CEO isn’t likely to allow the company to rest on its laurels.

The direction set at the top trickles down to the rest of the team. It’s not surprising that Bryan Catanzaro, Nvidia’s vice president of applied deep learning research, told Yahoo! Finance’s Alexandra Garfinkle last month: “Working at Nvidia feels existential every day. It doesn’t matter what the market cap is. We feel like the company is going to go bankrupt tomorrow. We all feel that way.”

Andy Grove was perhaps right that only the paranoid survive. If so, Nvidia should survive and thrive for a long time to come.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keith Speights has positions in Alphabet, Amazon, and Microsoft. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel and long January 2025 $45 calls on Intel. The Motley Fool has a disclosure policy.

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