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The AI Revolution of Blockchain Games (Part III): Electronic Games, the Hidden Engine of Technological Development.

W Labs

23-05-18 21:00

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Original Title: "The AI Revolution of Blockchain Games" (Part 3) Electronic Games, the Hidden Engine of Technological Development"

Original Source: WLabs Guatian Laboratory

Electronic games, the hidden engine of technological development

Many melon friends probably smiled when they saw this title and thought, "Melon Brother, you can't elevate electronic games to such a high level just because you like playing games." I'm not joking, I'm serious. At first, I didn't want to add the word "hidden" because it's like an engine, but then I thought that the attitude of the Eastern countries towards the gaming industry is ambiguous, so it's better to be low-key. So, in the third installment of this series, let's talk about why games have driven technological development for the past fifty years.

01 Steve Jobs and Pac-Man

Guayou in the electronics industry should know that the takeoff of the integrated circuit industry was in the 1970s. At that time, Motorola introduced the 6502 processor, which had a high cost performance. Although it was only an 8-bit processor, it could already perform complex calculations, and the price was very affordable. That is to say, if you make an electronic product and install this 6502 processor, you can sell it to the working class.

How to transform a new technology into a product that is accessible and desirable to the general public is a crucial criterion for determining whether a new industry can sweep the world. This involves three elements:

技术要是新的；
translates to

The technology should be new;
in English.

Technology can now be turned into products;

The product is cheap enough;

Everyone, let's review the revolutionary technological products developed over the past few decades. They all seem to have three common elements: personal computers, the internet, and mobile phones, including mobile internet. Why are we writing this series of articles? It's because we feel that AI and blockchain have the potential to become revolutionary products just like the ones mentioned above...

When the cost-effective 8-bit processor from Motorola was introduced, a company and an individual both keenly recognized the potential business opportunity it held. They each chose a direction and went their separate ways: the individual found a good friend and assembled the following ugly electronic device:

By the way, this is the prototype of the Apple I computer, and the chosen one is one of the co-founders of Apple, Steve Jobs, whose good friend is Steve Wozniak. The world's first home personal computer was born like this, and it was such an ugly duckling that could be sold for $500 each (according to conservative data from the US Bureau of Labor Statistics, the purchasing power of the US dollar in 1975 was about six times that of now, so it is equivalent to a current price of $3000, which is considered sky-high). What's even more incredible is that 48 years after the birth of the first Apple computer, the market value of this Apple company has reached 2.7 trillion US dollars. If Apple is considered an independent national economic entity, its GDP ranks fifth in the world, higher than the UK and only lower than Germany, Japan, China, and the United States. Steve Jobs established a new technology kingdom.

Stop, stop, stop. What does this have to do with games? Don't worry, we just mentioned the first direction was the emergence of personal computers for home use. Now let's talk about the second direction, which is a company called Atari that added a 6502 processor to a gaming device. After two years of research and development, they finally released the Atari 2600 game console in 1977, which was the first home gaming console.

This game console had an annual revenue of 2 billion US dollars (equivalent to 12 billion US dollars now) in 1980. Today's players have no feeling for Atari's glory, but the "one platform, multiple games" model it pioneered is still being applied: the console company develops, and the games on the cartridge can be handed over to game studios. The last level to pass in the movie "Ready Player One" is the "Pac-Man" game played on the ice, which was popularized on the Atari 2600 game console.

The sudden wealth of Atari made many technology companies realize the new direction of rapidly converting technological capabilities into wealth. This led to the entry of famous companies such as Sega and Nintendo. In 1983, Nintendo's Famicom (FC game console) swept the global gaming market like a tornado, bringing us the most unforgettable childhood memories of "Super Mario Bros." The Famicom was only discontinued in 2003, selling more than 60 million units in total. The familiar "Xiao Ba Wang" learning machine in the East is an imitation of the Famicom.

Here's some gossip. The first direction mentioned earlier was also learned by Jobs from Atari. Jobs, who had been a boss all his life, had only worked for Atari's game console team. During his time there, he learned about the powerful capabilities of the 6502 chip, which led him to start his own business and create Apple.

In the late 1980s, Sega and Nintendo were fiercely competing, and the processing power of 8-bit processors was not enough, so they switched to 16-bit processors! In this way, under the pressure of terminal products and market demand, chip technology research and development made rapid progress. Whoever came up with it first would make money, after all, this conversion path had already been established.

So now it's not an exaggeration to say that in the 1980s, it was the electronic game industry that drove the development of the chip and computer industries, right? And the subsequent handheld Game Boy from Nintendo (selling over 100 million units) developed hardware adaptation technology, while Sony's Play Station promoted CD and DVD technology. These are all important contributions of the gaming industry to new technology. The gaming industry provides the largest civilian consumption scene, and market demand is the lifeblood of new technology.

02 Amazing Nvidia

With the rise of the AI trend, NVIDIA's name has frequently appeared in media reports. For those who have experience building computers and the wealthy miners, NVIDIA should not be unfamiliar. It is the world's largest graphics card manufacturer. High-end AAA games require graphics cards, and mining also requires graphics cards (actually, what is needed is the GPU on the graphics card, which has computing power that surpasses the CPU in certain aspects). But what does this have to do with AI? Let's briefly explain.

The development of electronic games has been fast for nearly fifty years, and players' demands for game graphics and videos are increasingly high. As a result, the computing power of GPUs on graphics cards has been continuously iterated and evolved. Later, some peripheral industries, such as video capture and encryption, discovered the high computing power of GPUs and gave graphics cards new capabilities. Around 2000, AI entered the stage of deep learning (specifically, refer to the first article of this series, where Hinton created a way to describe neural networks called deep learning). Scientists found that the computing method of graphics cards was particularly suitable for the learning of neural networks. The more information and data fed, the better the effect. It is said that OpenAI's breakthrough came from an internal test that used tens of thousands of NVIDIA GPU A100s. Then, like a divine cheat code, a new world began to reveal its mysterious corner.

So, graphics cards have become a necessary resource for AI companies to grow. Just look at Nvidia's stock price over the past 20 years, it really took off around 2016. As we learned in the previous article, OpenAI was founded in 2015, and Nvidia took advantage of the AI wave to complete its comeback. Its current market value is about $680 billion, far surpassing other chip companies like Intel and AMD, making it a magical tech giant stock second only to Apple, Microsoft, and Google.

The mainstream GPUs produced by NVIDIA are currently providing computing power for AI large models, including two models: A100 and H100. Some analysts even consider the number of A100 and H100 owned by AI companies as an important indicator of enterprise strength, known as "English content". High English content is like taking Viagra, which can quickly lead to prosperity... This is my interpretation of the definition of "NVIDIA", haha, just kidding.

Recently, even Musk announced that Twitter has purchased about 10,000 NVIDIA GPUs. While everyone is envious of NVIDIA's good fortune, we cannot ignore the fact that as early as 2016, NVIDIA founder Huang Renxun donated an AI supercomputer DGX-1 to OpenAI to demonstrate the unique advantages of NVIDIA's GPUs in AI computing power. The computing power of this special machine can compress one year of OpenAI's training time into one month. Therefore, it can be seen that NVIDIA has also been laying out the AI track for a long time. A company with a market value of 680 billion US dollars cannot be obtained by luck. The behind-the-scenes strategic decision-making and business negotiations should be very exciting and cannot be explained by a simple divine touch.

So how did NVIDIA come about? Why is it able to span across several industries such as electronic gaming, industrial video, cryptocurrency mining, and AI computing? Let's continue to gossip:

Just like the internet, the integrated circuit was also born out of military demand. In the 1950s, the US Department of Defense wanted to add a control unit to missiles and other weapons to improve their accuracy. They then commissioned several university laboratories to conduct research, and among them, the renowned scientist and "father of the transistor" William Shockley (who had won the Nobel Prize in Physics) led a group of young talents to come up with the concept of the chip.

Xiaokeli has long been famous for his achievements. After achieving some results, his biggest hobby is to go out for AMA every day, enjoying flowers and applause, and saying to the outside world that "the project party is doing things", but in fact, he has been spending money from the US Department of Defense investors. However, the young talents under him really want to do things and realize their dreams of getting rich. They have always demanded to increase research and development, reduce costs, and scale up production, so as to break through to the large civilian field and dig, dig, dig, and make big money. But Xiaokeli just keeps suppressing them and doesn't let them do it.

Later, eight young people from Shockley Laboratory resigned and founded a new company called Fairchild, known as the "Fairchild Eight Traitors". The most famous among them was Moore, who defined Moore's Law.

The covenant of eight people is also particularly dreamy. They took a US dollar bill and signed everyone's name, meaning it couldn't be more obvious: Lao Xiao, don't give us false promises anymore! What we want is the green cash!

In fact, in the history of technological development, this kind of team combat often brings about revolutionary changes. From the early rebellion of the Eight Immortals in the chip revolution, to the Paypal Mafia in the early 2000s (whose members founded companies such as Tesla, LinkedIn, and YouTube) in the internet revolution, to the founding team of OpenAI in 2015 that we mentioned in the previous article.

Speaking of Xiantong, this company has a revolutionary significance:

Firstly, in terms of technology, it defines the semiconductor industry and the entire research and development approach has shifted towards using silicon as a material, which allows for mass production of integrated circuits.

Secondly, it defined the business model of "venture capital + incubator company". Xiantong Bapan first found Arthur Rock, the father of Wall Street's venture capital industry, to be the FA, and introduced the gold master Sherman Fairchild. The name of Xiantong Company comes from the name of the gold master. This kind of flattery is effective. Sherman Fairchild is a big shot. He is the largest individual shareholder of IBM. The first order of Xiantong after its establishment came from IBM. Since then, this type of venture capital business model has become popular and has been popular until today. That is, investors not only provide money, but also intervene in the management and operation of the company, and use their resources to help entrepreneurs succeed. In short, deeper binding is needed (this is also what W Labs is doing, hahaha).

Thirdly, it promoted the emergence of Silicon Valley. Fairchild gradually became the Huangpu Military Academy of the semiconductor industry. After working with the eight rebels and the financier, Mr. Fehrchild, for several years, they all went solo because they couldn't agree on the terms. They also led another group of colleagues to start their own companies. Everyone set up their companies and worked around Fairchild's office, and this area became Silicon Valley today. Among these new companies were Intel and AMD. The young people who left Fairchild together established more than 100 semiconductor companies, and Fairchild really became a god-like incubator.

Speaking of Nvidia, the person who came out of it founded AMD, and Nvidia's CEO, Huang Renxun, was an engineer at AMD before starting his own company. These companies and people have intricate connections. It is said that Huang Renxun and Su Zifeng, the current decision-maker at AMD, have some indirect family ties.

The idea behind NVIDIA's founding was: "You Intel and AMD can compete in the CPU market, I'll focus on making GPUs." As computer games became more advanced, traditional CPUs struggled to keep up with the demands of graphics processing. NVIDIA separated graphics processing into a new chip, defined as a GPU, and installed it on a graphics card. This was a blue ocean strategy at the time.

In the early days of the gaming industry, it contributed 100% of Nvidia's revenue. After earning money, Huang Renxun increased research and development efforts, expanding GPUs into industrial and other fields. In recent years, Nvidia has also ventured into AI, maintaining the company's product competitiveness. This approach is similar to Huawei's: prioritizing research and development with market following closely. The graphics processing industry is becoming increasingly popular, with GPUs being used for graphic recognition processing even in battlefield drones, in addition to AI.

Therefore, taking NVIDIA as an example, games, as the most resource-intensive software, have driven the advancement of hardware performance in reverse. At the same time, the gaming industry is the best link between the B-end and C-end, and users are willing to pay for the pleasure of playing games.

At this point, once again successfully hitting the nail on the head, games have been the driving force behind technological progress for half a century.

To be continued. This series is collectively created by the W Labs "AI Chain Game Research Group". Thanks to the group members Guage, Jiaren, Baobao, Brian, Xiaofei, and Huage for their hard work and dedication! This article is written by Guage.