He started his graduate work at Carnegie Mellon University in the field of computer chess in the year 1985. In 1988 he was part of the "Deep Thought" team that won the Fredkin Intermediate Prize for Deep Thought's Grandmaster-level performance. In 1989 he joined IBM to design a chess-playing computer and received a Ph.D. with honors from Carnegie Mellon University.

In 1991, the Association for Computing Machinery awarded him a Grace Murray Hopper Award for his work on Deep Blue. In 1996, the supercomputer lost to world chess champion Garry Kasparov. After the loss, Hsu's team prepared for a re-match. During the re-match with Kasparov, the supercomputer had double the processing power it had during the previous match. On May 11 1997, Kasparov lost the sixth and final game, and, with it, the match (2½-3½).

Prior to building the supercomputer Deep Blue that defeated Kasparov, Hsu worked on many other chess computers. He started with ChipTest, a simple chess-playing chip, based on a design from Unix-inventor's Ken Thompson's Belle, and very different from the other chess-playing computer being developed at Carnegie Mellon, HiTech, which was developed by Hans Berliner and included 64 different chess chips for the move generator instead of the one in Hsu's series. Hsu went on to build the successively better chess-playing computers Deep Thought, Deep Thought II, and Deep Blue Prototype.

Hsu now manages the platforms and devices center of Microsoft Research Asia, in Beijing.