+ 25,000 options, 1-year vest
- CFO letter: 4-year math
- 9,375 options lapsed, 1996
- NVIDIA: time-barred
- Google AI consoles a searcherYou'd think the hard part of getting rich off NVIDIA is getting in early. One man got in early, in writing, from Jensen Huang. He says he's still owed about a billion dollars. The man is Eric Gullichsen, and this is his account, posted with scans of his paperwork. NVIDIA hasn't said anything public that I could find. And the very first scan, the letter that started it all, says something that doesn't help him at all. I'll get to it at the end. Start with the houseboat. In nineteen ninety-three Gullichsen ran Sense8, an early virtual reality company, from a houseboat in Sausalito. NVIDIA co-founder Curtis Priem brought Jensen Huang and Chris Malachowsky over for a demo. Jensen was, in Gullichsen's words, sans leather jacket.
They came for his fast trick for curved texture mapping. Jensen invited him onto NVIDIA's technical advisory board, and in September he got twenty-five thousand stock options at five cents each. The grant says a quarter vests after three months, then quarterly, so that all shares vest after one year. One year. Remember that. Then the tech history. NVIDIA's first chip, the NV1, shipped in nineteen ninety-five and drew curved quads instead of triangles. Microsoft's new DirectX, he writes, supported triangles only. NVIDIA laid off a large share of its staff, then came back with the Riva one twenty-eight, which drew triangles. Lesson learned. Meanwhile, Gullichsen had moved to the Kingdom of Tonga to work on, quote, various internet startup schemes. That's the nineteen-nineties version of turning off Slack notifications.
In April ninety-six, NVIDIA's CFO wrote to him. The advisory relationship was over, fifteen thousand six hundred twenty-five options had vested, and he had ninety days to buy them. The full price was seven hundred eighty-one dollars. He mailed the check and forgot about it for almost thirty years. In twenty twenty-four he re-read the grant. The options that vested are sixty-two and a half percent of the grant. That's exactly ten quarters of a four-year schedule. On the one-year schedule in the grant, every option had vested long before that letter. So about nine thousand options were missing, and the ninety days ran out. Since then NVIDIA has split its stock six times, four hundred eighty to one combined. So those missing options are four and a half million shares today. At about two hundred thirty dollars a share, that's roughly a billion dollars.
His post is near the top of Hacker News today, with almost nine hundred points. One commenter worked out what the missing options would have cost back then, four hundred sixty-eight dollars and seventy-five cents. Another noticed his other fifteen thousand shares would be worth even more, if he'd kept them. He hasn't said. So he hired lawyers on contingency, and a year of letters followed. By his account, NVIDIA never disputed that the agreement was authentic. It argued the claim was time-barred. When both sides finally met, he says NVIDIA's outside law firm, Cooley, answered in essence so sue us. Thirty years of what the law calls sitting on your rights. His lawyers expected the case to die on a motion to dismiss, so he dropped it. Which means owed is his word, not a court's.
The top pushback in the thread is blunt. One commenter says the letter wasn't an award, just a notice, and the extra options had to be claimed before they expired. So, this issue died in nineteen ninety-six. So what's in it for you? If you hold options or stock units, read the grant itself, not the offer letter or the email from HR. Check quarters against years, and check how long you can buy after you leave. Not legal advice, I'm a voice on YouTube. One more from the weekend. The most upvoted post on Hacker News is a blogger asking when Google got so weird. He searched an old basketball meme about Dario Saric never coming over from Turkey. Google's AI overview decided a man named Dario had spurned him, and offered emotional support. The links he wanted were further down.
Now, that first letter. The invitation, signed by Jensen Huang in nineteen ninety-three, offers twenty-five thousand options which vest over four years. It even spells his name wrong. The grant says one year, and its cover sheet says the attached legal terms win any discrepancy. He never published those.
Verdict: NEEDS REVIEW — two NVIDIA papers disagree; it picked the cheap one
Sources
https://colo.to/nvidia-stock-narrative.html
https://colo.to/invitation.pdf
https://colo.to/grant.pdf
https://colo.to/exercise.pdf
https://news.ycombinator.com/item?id=49872723
https://patents.google.com/patent/US5796426A
https://news.ycombinator.com/item?id=49875959
https://news.ycombinator.com/item?id=49872734
https://news.ycombinator.com/item?id=49873069
https://news.ycombinator.com/item?id=49873282
https://news.ycombinator.com/item?id=49873251
https://sancho.bearblog.dev/google-weird/
https://news.ycombinator.com/item?id=49870367
And that's the diff for today. I'm Niko from Axrisi. Merge responsibly.
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