Why You Probably Missed Nvidia’s Epic Run

According to Forbes, Nvidia’s data center revenue exploded from just $600 million in 2017 to a staggering $41.1 billion last quarter alone, marking 56% year-over-year growth. This massive surge occurred while Nvidia’s AI clusters remained supply-constrained and served only a handful of customers. The article argues investors consistently underestimate transformative technologies because they’re trapped in linear thinking patterns, unable to grasp exponential math fundamentals. This cognitive bias, called exponential growth bias, causes people to dismiss rapid scaling as bubbles rather than recognizing genuine technological disruption. The piece uses the A4 paper folding analogy—where folding paper 50 times would reach the moon—to illustrate how exponential processes defy intuition through sudden, massive scale changes.

The Straight Line Trap

Here’s the thing about our brains—we’re wired for linear thinking. It’s comfortable. Predictable. You see a company growing steadily, you project that growth forward in a nice straight line. But exponential growth doesn’t work that way. It starts deceptively slow, then explodes. Think about that A4 paper example—the first few folds barely add any thickness. That’s where most investors bail. They see what looks like modest progress and assume it’ll continue that way forever.

And that’s exactly what happened with Nvidia. People saw a chip company growing incrementally. They completely missed that they were looking at foundational AI infrastructure that was about to go exponential. So when revenue started doubling and tripling, conventional investors called it a bubble. Sound familiar?

Why This Matters Now

We’re seeing the same pattern play out across AI infrastructure today. The early growth seems impressive but manageable. Then suddenly—boom—you’re looking at numbers that defy conventional valuation models. The scary part? This is still happening while supply is constrained and prices are high.

What happens when this technology becomes cheaper and more accessible? Basically, we haven’t seen anything yet. The real acceleration might be just beginning. Remember the wireless revolution? Nobody in the 1990s could have projected the ubiquity of mobile devices using linear thinking. Those who tried missed the torrent of growth that followed.

Breaking The Pattern

So how do you avoid making the same mistake? First, recognize that transformative technologies follow different rules. They don’t grow in straight lines. They compound. Second, understand that early growth numbers—while they might look impressive—are often just the warm-up act.

The hardest part? You have to fight your own intuition. Your brain will scream “bubble!” when you see numbers that don’t fit linear models. But sometimes, the numbers are right and your model is wrong. The question isn’t whether exponential growth can continue forever—it can’t. The question is whether you can recognize it early enough to capture the most dramatic phase.

Look, linear thinking got us this far. But in a world of accelerating technological change, it’s becoming a liability. Your success as an investor might depend on breaking free from the straight line and learning to think in curves.