I Am the Third-Generation Heir of a Conglomerate - Chapter 492



Only Noblemtl

492. Pranks (2)

The trade dispute between the United States and China is heating up day by day.

The United States imposed a 25% tariff on $16 billion worth of IT products just one month after the first round of tariffs.

China has also imposed tariffs of the same scale, targeting the U.S. energy industry.

It was the United States and China that were exchanging attacks and defenses at short intervals.

Thanks to this, the financial tower that had prepared in advance was able to reap enormous returns.

Meanwhile, NVIDIA’s major shareholder and CEO Jackson Huang visited Korea.

The day before the shareholders’ meeting.

Under the pretext of touring the Taewoo Semiconductor foundry plant, I was able to meet with President Jackson Hwang.

“Thank you for visiting Taewoo Group. We are sorry that we are only now able to welcome the executives of our major customer, NVIDIA.”

“I apologize for coming to you only now. Thanks to Taewoo Semiconductor, we have been able to produce products without any problems.”

As demand for GPUs increased, Taewoo Semiconductor’s foundry volume also increased.

Up until now, Nvidia couldn’t be called a big player because demand for GPUs wasn’t high.

That’s why I didn’t meet him in person, but I also made arrangements to meet him because GPU usage is expected to increase rapidly in the future.

“There is a reason I wanted to meet with CEO Jackson Huang before the shareholders’ meeting.”

“I don’t think the major shareholders will be too happy if it becomes known that we are meeting separately like this.”

“I want to talk about what is beneficial to NVIDIA as a company, not what is beneficial to the major shareholders.”

Jackson Huang was the founder and executive of Nvidia.

Naturally, he was also a shareholder who owned a large amount of Nvidia stock.

But unlike other major shareholders, he was directly managing the company, so there were things that had to be said only to him.

“I’d like to hear what the story is about.”

“We are planning to make a major investment in the GPU industry.”

“Hmm, isn’t the timing too bad? As you may know, GPU demand has dropped significantly.”

“You can tell just by looking at the stock price. We know very well that demand for GPUs has decreased to the point where Nvidia’s stock price has been cut in half.”

Jackson Huang looked at me with a puzzled face.

It was the dark age of the GPU market. But when I said I would make a large investment, he looked at me with disbelief.

“If you say it is a large-scale investment, can you tell me how large it is?”

“We are planning to invest $20 billion to build new factories in Korea and the United States, and we are also planning to invest more than $20 billion in GPU design.”

“I think you misunderstand how NVIDIA manufactures its products. NVIDIA does not manufacture its own products. It outsources manufacturing to Taewoo Semiconductor.”

Do you think I don’t know?

Still, there was a reason for proposing investment in building a new factory.

“I want to build a new factory through a joint venture between Taewoo Semiconductor and Nvidia. And I want Taewoo Group to unconditionally purchase 70% of the products produced in that factory.”

“It sounds like you want to build a factory to meet the needs of the Taewoo Group. But do you think there will be enough demand for GPUs to justify building a $20 billion factory?”

“We plan to develop an industry based on GPUs. Of course, there is a possibility of failure, but for NVIDIA, it is not a bad condition at all because it guarantees high sales.”

GPU exclusive.

For this purpose, a new factory was proposed.

As autonomous vehicles and AI advance, GPUs will become harder to obtain.

So, by signing an exclusive contract in advance, Taewoo Group was able to secure a stable supply of GPUs.

Exclusivity in GPUs was necessary to widen the gap with latecomers, and it was also a necessary measure to protect Taewoo Group’s future growth engine.

“How can you believe that you can unconditionally handle 70% of the production volume at the factory? Of course, even if Taewoo Group bears all the costs of building the factory, Nvidia will inevitably bear a large burden.”

“These days, we live in a world where you can’t trust verbal promises or even contracts. In the end, the only thing you can trust is cash, right? I’ll pay you right now the amount equivalent to 70% of the production volume for five years after the new factory is completed.”

I have experienced a lot of negotiations so far.

And in my experience, the strongest card was the cash grab.

The moment you put cash in front of them, the other person is bound to waver.

“… Are you saying that you will sign a contract for 70% of the 5-year supply right now?”

“Yes, I will deposit the money to NVIDIA as soon as the contract is signed.”

“You’re not the kind of person who would just offer such good conditions. Are there other conditions attached?”

Jackson Huang didn’t rise from developer to CEO for nothing.

He was quite perceptive and had an intuition that there was one more condition I was hiding.

“We want to get a stake in Nvidia if they invest $20 billion in building a factory and $20 billion in designing GPUs.

“How much equity would you like for a $40 billion investment?

This year, Nvidia’s market cap was just $80 billion.

It was like investing $40 billion, half of the market cap.

So, President Jackson Huang also knew very well that he had a lot of shares to give up.

“Wouldn’t it be possible to increase the stake by about 25% through a paid-in capital increase?”

“It is not something I can decide. Paid capital increase must be done through the board of directors.”

“If only the CEO agrees, it is possible. We have already secured a 30% friendly stake. And if Taewoo Group secures just 10% more stake through negotiations with the major shareholder tomorrow, wouldn’t we have a good chance of winning?”

I said indirectly that it was a friendly relationship.

In reality, the stake already held was 30% through Taewoo Securities and Fintech Bank.

So, we had already secured a 30% stake that would unconditionally take our side, and if we added the stakes of the management including Jackson Hwang, it was an overwhelmingly advantageous fight for us.

“Wouldn’t it be better to use the $40 billion to secure a stake rather than invest it? At the current stock price, wouldn’t it be possible to secure at least a 30% stake?”

“I do not simply want to acquire shares, but I also want to form a strong relationship between NVIDIA and Taewoo Group. That is why I am proposing a $40 billion investment.”

Equity was never something that could be secured just because one had money.

Of course, with Nvidia’s stock price plummeting, there was a possibility that many major shareholders would sell their stakes.

Even so, securing an additional 30% stake was nearly impossible.

So, I used the card called paid capital increase through investment.

At the same time, the plan was to continue to secure shares released into the market.

If we had moved in this two-track manner, we could have secured more than half of Nvidia’s shares and effectively made it a subsidiary of the Taewoo Group.

“If the 30% friendly stake is true, it shouldn’t be difficult to convince the board of directors.”

“I am confident that there is no better offer to get out of the current crisis. If news of a $40 billion investment is announced, wouldn’t Nvidia’s stock price rise?”

From Nvidia’s perspective, it wasn’t a bad deal at all.

This means that while receiving investment equivalent to nearly half of the market cap, they only have to give up a 25% stake.

Moreover, the moment a massive investment is announced, the stock price tends to move.

That is why the investment proposal was made only to Jackson Hwang, not to the major shareholder.

“If we attract $40 billion in investment, it will certainly have a big impact on the stock price.”

“Would you like to accept the offer?”

“However, although we have been dealing with Taewoo Group for a long time, we have not built up enough trust to share a 25% stake.”

It was Jackson Huang who was halfway there.

All he wanted was one last shot.

Taewoo Group had one card left that he had never thought of.

“Please call President Lisa.”

President Lisa, who had been waiting in advance.

She was the one who led Taewoo Semiconductor.

He was a developer who was known in the industry for his outstanding GPU design skills.

“I never thought I would see you like this. I’ve greeted you many times at conferences, but it’s nice to see you again like this.”

“It’s nice to meet you, Ms. Lisa, but why all of a sudden?”

Jackson Huang and Lisa had a lot in common.

As we all know, both of them were Taiwanese immigrants to the United States and were excellent developers with a specialty in GPU design.

But that wasn’t the end.

I collected information about Jackson Huang through David.

In the meantime, I was able to discover one thing in common between the two that no one else had noticed.

“Taewoo Semiconductor is headed by CEO Lisa. Wouldn’t this be enough to build trust?”

“I’m sure he’s one of the few developers I respect, but he has nothing to do with this.”

“There are two ways to build trust. One is an innate relationship. It is a trust that is naturally formed through a blood relationship. The other is an acquired trust that is formed after getting to know each other for a long time.”

“I agree with you. I’ve known Lisa for a long time, but that doesn’t mean we’re close enough to have trust.”

President Jackson Huang looked at me with a dumbfounded expression.

President Lisa, who was suddenly called out, also had a similar expression on her face.

“I respect Mr. Jackson Huang, but we’re not that close. We don’t have much of a bond other than the fact that we’re both from Taiwan.”

“You two didn’t know that. You two belong to the former category. You have a relationship of trust that is formed naturally.”

“What do you mean?”

Two of the most influential figures in the GPU design industry.

Of course, President Jackson Huang’s influence was much greater, but the person with the next most influence was President Lisa.

And there was one secret they kept hidden.

It could be said that it was not a secret that was hidden on purpose, but rather a secret that was naturally forgotten.

“The two of you are blood related. You could say that you are a 5th cousin and a nephew. Taewoo Group analyzes a lot of information before recruiting executives. In the process, we found out that the two of you are blood related.”

“Are you saying that I am President Lisa’s fifth cousin?”

“Yes. President Lisa is the granddaughter of President Jackson Huang’s maternal uncle. They’re not that distant of a relationship.”

Is there any country that is as sensitive to genealogy as Korea?

If you were fifth cousins, you would have family members who knew each other just by crossing one bridge.

To President Jackson Huang, he was his mother’s older brother, and to President Lisa, he was her grandfather.

Both families immigrated when they were young, so they didn’t have much contact with each other.

This was a fact that could be known in an instant if one went back to Taiwan and looked up the family tree even now.

“Are you sure Mr. Jackson Huang and I are cousins?”

“I have also prepared a family tree so that you can understand intuitively.”

I took out the family tree I had prepared in advance.

Since they were fifth cousins, one sheet of A4 paper was enough to prove their blood relationship.

“We really were like uncle and niece. Wow, things like this happen in this world.”

“Don’t you feel strange towards each other? Isn’t it because you both have the same blood that you have such great design skills?”

The two of them were still awkward.

But, because I saw the family tree with my own two eyes, a subtle atmosphere was created.

“Can I make a phone call for a moment?”

“I will also be leaving for a moment.”

There were two people who left for the final confirmation.

After 20 minutes, they returned to the conference room. Judging from their expressions, it seemed as if they had confirmed that they were cousins.

“What relationship is as trustworthy as family? At Taewoo Semiconductor, President Lisa is solely responsible for GPU design.”

“I will accept the Chairman’s proposal. Will you help me acquire as many shares as possible at the shareholders’ meeting?”

“If you do that, NVIDIA and Taewoo Group can have a relationship where they can grow together.”

The last card, blood ties, was successful.

In fact, Jackson Huang was swayed by my proposal even before the bloodline card.

It was just the final end to his blood relationship with President Lisa.