Selling shovels during a gold rush is the best way to get rich. :)
this post was submitted on 05 Jun 2024
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While suing everyone else that makes shovel handles that work with your shovel heads.
Fuck this stupid world we've built.
You missed out on buying while it was cheaper too, eh?
AI is this decades .com boom. Brace yourself for the crash.
God I hope so, but the next thing will likely be even more stupid than this, NFTs and crypto.
I didn't know there were that many PC gamers out there. /s
Seriously, though, the pivot from making video cards to investing in AI and crypto is kinda genius. The crypto thing mostly fell into their laps, but they leaned in. The AI thing, though, I'm not sure how they decided to focus on that or who first pitched the idea to the board; but that was business genius.
To your point, when you look at both crypto and AI I see a common theme. They both need a lot of computation, call it super computing. Nvidia makes products that provide a lot of compute. Until Nvidia’s competitors catch up I think they’ll do fine as more applications that require a lot of computation are found.
Basically, I think of Nvidia as a super computer company. When I think of them this way their position makes more sense.
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They were doing that for years before it became popular. The same tech for video graphics just so happened to be useful for AI and big data, and they doubled down on supporting enterprise and research efforts in that when it was a tiny field before their competitors did, and continued to specialize as it grew.
Supporting niche uses of your product can sometimes pay off if that niche hits the lottery.
Hardware made for heavy computing being good at stuff like this isn’t all that schokking though. The biggest gamble is if new technology will take off at all. Nvidia, just like google has the capital to diversify, bet on all the horses at once to drop the losers later.
same as with crypto. the software community started using GPUs for deep learning, and they were just meeting that demand
They were first to market with a decent GPGPU toolkit (CUDA) which built them a pretty sizeable userbase.
Then when competitors caught up, they made it as hard as possible to transition away from their ecosystem.
Like Apple, but worse.
I guess they learned from their Gaming heyday that not controlling the abstraction layer (eg OpenGL, DirectX, etc) means they can’t do lock in.
To their credit they've been pushing GPGPUs for a while. They did position themselves well for accelerators. Doesn't mean they don't suck.
DLSS was a necessity to make gains at speeds their hardware could not keep up with.
All that value and they still can’t get their video cards to work worth a shit in Linux.
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Last year's Nvidia keynote at Computex had Jensen trying to get the audience to have an awkward, AI-generated sing along. The market thought this was great and sent the market cap over $1T.
For this year's keynote, Jensen wandered the stage like he was looking for his cat while rambling about language models. The market thinks this is great and sent the market cap over $3T.
For the second biggest company on Earth, he is a shockingly bad speaker, and completely ill prepared. For some reason, the market loves this guy.
Is it that the market loves him or is it that a CEO's keynote isn't really that big a deal and is mostly an ego-stroking event?
Because I'm guessing what the market actually loves is the new products that are announced.
That's the thing: no new products were announced.
For consumers. They're pushing put giant power hungry gpus for data centers to power LLM.
Most of the valuation is likely consumers hyping the bull run, and speculation about just how much b2b revenue they will get.
They didn't though. Blackwell was announced before this, and there isn't any real specifics besides showing some prototypes. There's some software stuff about improving Pandas and pregenerated LLMs. That's about it.
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I take back what I said in that case.
The big AI bubble
Nvidia and other chipmakers produce actual, useful products. They'll be sitting pretty after the bubble pops.
Their main growth drivers are data centers, when demand will dry within 2 years, a bubble will pop. Especially when theoretical architecture of Neural Network change, the need for high performance will decrease.
See also: Sun Microsystems, who made tons of servers that drove the dotcom boom. They didn't fare so well afterword.
This is a "grab the pile of cash and be happy" situation.
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Time to sell Nvidia stock. Congrats to Huang for pulling it off. Get out when you're on top.
imagine how many leather jackets he can buy now
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It is all AI hype isn't it?
Always has been
Not quite, it used to be crypto hype.
Now we just have to wait for the crash.
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The real game now is how long will it last before the hype and with the the floor falls out of "AI" and a good chunk of their stock gains with it.
I don’t think generative AI is going anywhere anytime soon. The hype will eventually die down, but it’s already proved its usefulness in many tasks.
Is AI useful? Maybe. But is it profitable? AI will go the same way .com did: there will be a massive crash and at the end of that you'll see who actually had their pants on
Nvidia IS making a profit on it though. It's the whole "in a good rush, sell shovels" thing.
My Point is more that their revenue stream will temporarily take a giant hit during that, when everyone is busy going bankrupt the few AI companies that make a profit with it have better things to do than buy new Accelerators right that instant.
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Most rational stock market analysis.
“Valuable”
I feel like the executives are all in this "AI" echo chamber. Like, most people grossly misunderstand what AI is, what it does and what it cannot do, with current tech... And all the execs are sitting around in a circle jerk making up solutions using AI, for which there is no problem to solve.
Don't get me wrong, some companies are doing cool shit with it. Not necessarily practical shit, but cool nonetheless, other companies just seem to be drinking the AI Kool aid and throwing it at fucking everything for no goddamned reason just to get in on the hype. Investors are close behind, trying to ride the coattails of their "success" to riches, and it's all just a self-reaffirming system with no basis in reality.
Nvidia is the one profiting here, all this AI smoke and mirrors needs something for it to run on top of, they're selling the physical tools to make it go. Whether it goes somewhere useful or drives off a goddamned cliff, doesn't matter to Nvidia in the slightest. They made their money. Get wrecked.
I wonder why AMD stock hasn't really gone significantly up (500% vs over Nvidia's 3000% in last 5Y). They make GPUs too
In one word: cuda
Because of a lot of things. From graphics side RTX and DLSS left AMD catching up (even if RTX isn't really that big of a deal now), then there was Nvidia cards being better at crypto mining and now it's Nvidia cards being better at AI computation + Nvidia pivoting into AI hardware space..
If you want to boil it down to the undeniable, it's that Nvidia is just better at marketing. Everyone knows what Nvidia is doing. What is AMD doing? Besides playing catch-up to Nvidia.
This is all AI hyoe, which Nvidia is sadly much ahead of their competitors.
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So they rip customers off? Got it.
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