CUDA Proves Nvidia Is a Software Company

A striking development has emerged in artificial intelligence. Sheon HanBusinessMay 11, 2026 6:00 AMCUDA Proves Nvidia Is a Software CompanyThere’s a deep, forbidding moat that surrounds Nvidia—and it has nothing to do with hardware. Illustration: Aaron Fernandez Save this story Save this storyForgive me for starting with a cliché, a piece of finance jargon that has recently slipped into the tech lexicon, but I’m afraid I must talk about “moats. ” Popularized decades ago by Warren Buffett to refer to a company’s competitive advantage, the word found its way into Silicon Valley pitch decks when a memo purportedly leaked from Google, titled “We Have No Moat, and Neither Does OpenAI,” fretted that open-source AI would pillage Big Tech’s castle.

A few years on, the castle walls remain safe. Apart from a brief bout of panic when DeepSeek first appeared, open-source AI models have not vastly outperformed proprietary models. Still, none of the frontier labs—OpenAI, Anthropic, Google—has a moat to speak of.

Technical Details

Machine ReadableA regular column about programming. Because if/when the machines take over, we should at least speak their language. The company that does have a moat is Nvidia.

CEO Jensen Huang has called it his most precious “treasure. ” It is not, as you might assume for a chip company, a piece of hardware. It’s something called CUDA.

What sounds like a chemical compound banned by the FDA may be the one true moat in AI. CUDA technically stands for Compute Unified Device Architecture, but much like laser or scuba, no one bothers to expand the acronym; we just say “KOO-duh. ” So what is this all-important treasure good for?

Industry Implications

If forced to give a one-word answer: parallelization. Here’s a simple example. Let’s say we task a machine with filling out a 9×9 multiplication table.

Using a computer with a single core, all 81 operations are executed dutifully one by one. But a GPU with nine cores can assign tasks so that each core takes a different column—one from 1×1 to 1×9, another from 2×1 to 2×9, and so on—for a ninefold speed gain. Modern GPUs can be even cleverer.

For example, if programmed to recognize commutativity—7×9 = 9×7—they can avoid duplicate work, reducing 81 operations to 45, nearly halving the workload. When a single training run costs a hundred million dollars, every optimization counts. Nvidia’s GPUs were originally built to render graphics for video games.

This advance offers important signals about the future of the sector, and the tech world is watching closely.