In 1993 Jensen Huang invited Eric Gullichsen onto NVIDIA's technical advisory board and granted him 25,000 stock options. The grant's vesting schedule says all of them vest within one year. In 1996 NVIDIA's CFO counted them as if they vested over four years, and gave him 90 days to buy the smaller number. Gullichsen published the story and the scans this weekend, and after six stock splits the gap is worth, by his math, about a billion dollars. If you have an option or RSU grant in a drawer, this is the cheapest lesson you will get this year.
TL;DR
- The September 1993 grant: 25,000 options, 25 % after three months, then quarterly, "so that all shares shall vest upon the expiration of one year from Grant Date."
- The April 1996 CFO letter: 15,625 options vested, 90 days to exercise, $781.25 for all of them. 15,625 is exactly ten quarters of a four-year schedule.
- The missing 9,375 options, multiplied by NVIDIA's six splits (480 to one combined), would be 4.5 million shares, roughly $1 billion at about $231 a share.
- Per Gullichsen, NVIDIA did not dispute the agreement, only argued the claim is time-barred. He dropped it. "Owed" is his word; no court has ruled.
- NVIDIA's own 1993 invitation letter says the options vest "over 4 years". Two NVIDIA documents disagree.
Who is Eric Gullichsen, and how did he get NVIDIA stock options?
In 1993 Gullichsen ran Sense8, an early virtual reality company, from a houseboat in Sausalito, the SS Vallejo. By his account, NVIDIA co-founder Curtis Priem brought Jensen Huang and Chris Malachowsky over for a demo. Jensen was, in Gullichsen's words, "at that time, sans leather jacket."
What Priem wanted was Gullichsen's fast biquadratic texture mapping, a way to put a texture on a curved surface quickly. He points to it as patent US5796426A. NVIDIA was building a chip around curved surfaces, so the fit was obvious.
The invitation followed, signed "Jen-Hsun Huang, President & CEO" and addressed to "Eric Gullickson", misspelled.
Remember that sentence. The grant came in September.
The vesting schedule on the grant: one year, not four
The grant cover sheet is Grant Number 7, dated 9/9/93, for 25,000 shares. The vesting clause is typed in full:
Four quarters, 25 % each, done by September 1994. There is no cliff and nothing about four years.
Two details on the same sheet matter. The exercise price field reads "$0.5", while the CFO's letter later says $0.05; the letter's arithmetic only works at five cents, so the cover is probably a typo. And the cover sheet says "Any discrepancy between this cover sheet and the attached legal provisions of the option shall be governed by the attached legal provisions." Those attached provisions are not among the scans Gullichsen published. Keep that in mind before calling anyone a thief.
Why did Microsoft nearly kill NVIDIA? NV1, quads and DirectX triangles
This is the part the video had forty seconds for.
NVIDIA's first chip, the NV1, shipped in 1995. It rendered curved quadratic surfaces built from four-sided patches, the same family of ideas that brought Gullichsen to the table. Then, as he writes, Microsoft decided "not to support quadratic texture mapping, or even quads, in their just-released DirectX toolkit - triangles only."
Why would that sink a chip? If PC games are written against Microsoft's API, the API decides which shapes exist. A triangle is the simplest thing a rasteriser can draw: three points always lie on one flat plane, any mesh can be cut into triangles, and the maths for filling one is cheap and predictable. A curved quad is more expressive, but if the API your customers write against doesn't speak it, your clever hardware is a dialect nobody uses.
Per the essay, "the company laid off a large percentage of its staff." NVIDIA came back with the RIVA 128, which drew triangles, as Gullichsen recalls on HN. The rest of NVIDIA's history is triangles, and there are a lot of them.
Meanwhile Gullichsen had moved to the Kingdom of Tonga, "working on various internet startup schemes."
The 1996 CFO letter and the 90-day exercise window
On April 16, 1996, NVIDIA CFO Marcel Gani wrote to end the advisory relationship.
He mailed a check for $781.25 and, in his words, "forgot all about it." In 2024 he re-read the grant. Here is the arithmetic he found, laid next to both schedules:
| Schedule | Per quarter | Quarters from 9/9/93 to 4/16/96 | Vested on the letter's date |
|---|---|---|---|
| Grant, one year (4 quarters) | 6,250 | 10, capped at 4 | 25,000 |
| Four years (16 quarters) | 1,562.5 | 10 | 15,625 |
15,625 is 62.5 % of the grant, exactly ten sixteenths. The letter's number only makes sense on a four-year schedule, the one from the invitation. On the grant's own schedule, every option had vested more than a year and a half before the letter was written. The difference is 9,375 options, and the 90 days ran out in July 1996.
A simplified sketch of the check anyone can run on their own paperwork (illustrative, not from the documents):
# vested = total * min(quarters_elapsed, quarters_in_schedule) / quarters_in_schedule
total, elapsed = 25_000, 10 # 9/9/93 -> 4/16/96 = ten full quarters
print(total * min(elapsed, 4) // 4) # grant's schedule, 1 year: 25000
print(total * min(elapsed, 16) // 16) # 4-year schedule: 15625
One Hacker News commenter worked out what the missing options would have cost to exercise at five cents: $468.75.
How NVDA stock splits turn 9,375 options into a billion dollars
NVIDIA has split its stock six times: 2:1 in June 2000, 2:1 in September 2001, 2:1 in April 2006, 3:2 in September 2007, 4:1 in July 2021 and 10:1 in June 2024 (Yahoo Finance split history). Multiply them and you get 480, the same "cumulative 480x" the essay uses.
9,375 options times 480 is 4.5 million shares. At about $231, NVDA's price on Monday morning in New York, that is roughly $1.04 billion. A commenter in the HN thread noted the 15,625 he did exercise would be about $1.7 billion by the same maths. Whether he kept them, he hasn't said.
Why NVIDIA won't pay: the statute of limitations
Gullichsen hired Allan Steyer and Chris Burke on contingency, and about a year of letters followed. His account of NVIDIA's position: "NVIDIA did not dispute the authenticity of the option agreement, only that my claims were long since time-barred." When the two sides met, he says, "Cooley's answer was, in essence, 'so sue us.'" That is his own paraphrase of what NVIDIA's outside counsel said.
A statute of limitations is a deadline for bringing a claim. Wait too long and the court doesn't reach whether you were right. Thirty years is a long time; he writes that he "sat on my rights", and his lawyers thought it "unlikely we'd make it past a motion to dismiss." No lawsuit was filed. NVIDIA hasn't said anything public about it that I could find.
The top pushback on HN, from reticulates: the letter wasn't an award, it was a notice, and the extra vested options had to be claimed before they expired. "So, this issue died in 1996." That is the strongest argument against him, and it is his own paperwork that makes it.
What developers should check in their own option or RSU grant
I'm not a lawyer and this is not legal advice. What follows is general advice from a man who read three scans.
- Read the grant itself. The offer letter, the HR email and the recruiter's slide are summaries. The grant, and the plan document it points to, is what binds. In this story the offer and the grant disagreed, and the cheaper one got used.
- Quarters versus years. Write the schedule out: start date, cliff (if any), how often it vests, when it ends. Then count what you should have today and compare it with your equity portal.
- Know your exercise window. Options usually have to be bought within a fixed period after you leave, 90 days in this letter. RSUs work differently: they are shares delivered on vesting, with no exercise price. Know which one you hold.
- Check the number on your exit letter. When you leave, you get a number. Recompute it from the grant before the window closes, while the error is worth $468.75 and not a court case.
- Deadlines for disputes are real. If something looks wrong, raise it in writing soon. Limitation periods differ by place and by claim, which is exactly the question to ask a lawyer.
- Keep the paperwork. The only reason this story exists is that Gullichsen kept his scans for thirty years.
Also in this episode: when did Google get so weird?
The weekend's most-upvoted post on Hacker News was a blogger asking "When did Google get so f-ing weird?". He searched "hes never coming over dario", an old 76ers joke about Dario Saric staying in Turkey. Google's AI overview, as he puts it, "assumed that I had been spurned by a man in my life named Dario and decided what I wanted was an empathetic digital friend." The links he wanted sat "a few hundred pixels below the AI slop."
Verdict: NEEDS REVIEW
I stamped it NEEDS REVIEW, and not for the law: the limitation period is real, and Gullichsen dropped the claim himself. What needs review is the paperwork. Two NVIDIA documents describe the same 25,000 options differently, the grant says one year, the invitation says four, and the letter that ended the relationship used the four-year count. The grant's legal provisions, which would settle it, aren't public. I'd review every grant I've signed tonight.
FAQ
Does NVIDIA owe Eric Gullichsen a billion dollars?
That is his claim. By his account NVIDIA argued it is time-barred, his lawyers expected a motion to dismiss, and no lawsuit was filed. No court has decided anything.
What vesting schedule was on the NVIDIA grant?
25 % after three months, then quarterly, all vested one year from the 9/9/93 grant date, per the scanned cover sheet. The 1993 invitation letter said four years.
How many times has NVDA stock split?
Six times since 2000, 480 to one combined. One share bought in 1996 would be 480 today.
What happens to stock options when you leave a company?
Vested options usually have to be exercised within a set window after you leave, 90 days in this case, or they expire. Check your own grant and plan document.
Sources
- Eric Gullichsen, "Owed a billion dollars in NVDA stock": https://colo.to/nvidia-stock-narrative.html
- Technical Advisory Board invitation (1993): https://colo.to/invitation.pdf
- Stock option grant cover sheet (Sept 1993): https://colo.to/grant.pdf
- NVIDIA CFO letter (April 16, 1996): https://colo.to/exercise.pdf
- Hacker News discussion: https://news.ycombinator.com/item?id=49872723
- Gullichsen on the RIVA 128 pivot (HN): https://news.ycombinator.com/item?id=49872734
- HN, exercise cost of the missing options: https://news.ycombinator.com/item?id=49873069
- HN, "this issue died in 1996": https://news.ycombinator.com/item?id=49873251
- Patent US5796426A: https://patents.google.com/patent/US5796426A
- NVDA split history (Yahoo Finance): https://query1.finance.yahoo.com/v8/finance/chart/NVDA?range=30y&interval=3mo&events=split
- "When did Google get so f-ing weird?": https://sancho.bearblog.dev/google-weird/
- Hacker News discussion: https://news.ycombinator.com/item?id=49870367
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