Alfred Nobel established the Nobel Prizes in response to his distress over the use of his invention, dynamite, in warfare. The turning point came when he read an obituary mistakenly attributing his death to the invention that caused destruction rather than its potential for benefit. This realization prompted Nobel to allocate his fortune towards honoring those who contribute positively to humanity through the establishment of the prizes. He outlined categories for which these prizes would be awarded, prioritizing peace, literature, and science, creating a lasting legacy that continues to influence various fields today.