Per The NVIDIA Way [1], the GeForce 256 was branded as "the first GPU" for marketing reasons alone; the actual first GPU was the subsequent GeForce 3 (which introduced programmable shaders):
[Sanford] Russell grabbed Michael Hara for a thirty-minute brainstorm session to figure out how to market the GeForce 256 more effectively, and both executives remember coming out of the room with the notion to call the new chip the first entry in an entirely new product category altogether: a graphics processing unit, or GPU, which would be to graphics rendering what the computer's main central processing unit (CPU) was for all other computational tasks.
Even so, the GPU moniker, when applied first to the GeForce 256, was controversial among Nvidia engineers, who pointed out that a chip could not truly be called a GPU unless it had several features that the GeForce 256 did not. The chip lacked a "state machine," a technical term meaning a dedicated processor that transitions from various states to execute and fetch instructions, in the same manner that a CPU does for programming commands. It was not programmable, meaning that graphics styles and features could not easily be customized by third-party developers. Instead, developers would have to rely on a fixed set of Nvidia-defined hardware functions. Moreover, the GeForce 256 did not have its own programming language.
But the marketing team argued that such features were already planned for the next generation of graphics chips. And even without them, the GeForce 256 delivered a step change in performance that would be obvious to every gamer and computer enthusiast in the world. While not literally a GPU, the GeForce 256 could still be a category-defining product. The chips that would follow-the "true" GPUs that would be fully programmable by outside developers-were coming soon enough.
So Nvidia's marketing team pushed forward with the GPU name over the dissent of Nvidia's engineers. "We don't need anyone's approval," Vivoli told them. He didn't think anyone outside of the industry would really care about the technical definition. Besides, "we knew the next one was going to be programmable. We decided to take a leap, make a stretch that this is a GPU."
In February 2001, Nvidia released the GeForce 3, whose programmable shader technology and support for third-party development of its core graphics functions made it the first true GPU.
[1]
https://www.taekim.com
