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Nvidia’s $589B DeepSeek rout

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Re: Nvidia’s $589B DeepSeek rout

#81

Post by rhubarbtree »

This is an example of a recurrent phenomenon in politics. Trump comes in with big plans, this and that, threatening countries, deporting people, a clear agenda to take America to the hard right. Isolationism, crush China, screw every other country over, etc. etc.

And then - something completely unexpected, a total curveball - arrives a week into office and everything changes. Your agenda collapses and you enter reactive mode.

AI bubble could pop. Valuations drop. Crypto might get hit. Where is Project Stargate now? It might become a joke.

A more cynical observer might suggest that _the timing was no coincidence_.

Re: Nvidia’s $589B DeepSeek rout

#82

Post by dist-epoch »

dogma1138 wrote: post #58
Etheryte wrote: post #38

Earlier quoted context omitted.

While everything you say may be true, this shows a fundamental misunderstanding about how the modern stock market functions. How much value a company creates is at best tangential and often completely orthogonal to how much the stock is worth. The stock market has always been a Keynesian beauty contest, but in the past few decades, strongly shaped and morphed by attention economies. A good example of this is DJT, a c…

I understand that part, hence why this is very much buy the dip for me.

You are assuming that the stock rose to this level "on merits" and now it falls due to "stupidness".

Maybe part of the growth was also "stupidness", and in that case buying the dip is a mistake because the "merit" price (value) is still way below.

Re: Nvidia’s $589B DeepSeek rout

#83

Post by ransom1538 »

dogma1138 wrote: post #6

Good time to buy then, I don’t understand how stupid some traders can be. A more efficient model is better for NVIDIA not worse. More compute is still better given the same model. And as more efficient models proliferate it means more edge computing which means more customers with lower negotiating power than Meta and Google… This is like thinking that if people need to dig only 1 day instead of an entire month to ge…

"dig only 1 day instead of an entire month"

You answered your own question. People do not dig in the Sacramento right anymore for gold, because, it is gone. If you can train models for 1/100 the cost, and you sell model training chips, you probably are not going to sell as many chips.

Re: Nvidia’s $589B DeepSeek rout

#84

Post by WJW »

Dalewyn wrote: post #55
Etheryte wrote: post #38

Earlier quoted context omitted.

While everything you say may be true, this shows a fundamental misunderstanding about how the modern stock market functions. How much value a company creates is at best tangential and often completely orthogonal to how much the stock is worth. The stock market has always been a Keynesian beauty contest, but in the past few decades, strongly shaped and morphed by attention economies. A good example of this is DJT, a c…

Put more simply: The stock market is not a reflection of the economy. Wall Street is not Main Street.

It's a reflection of expectations about the future economy. Obviously, such expectations are not always accurate because humans are quite fallible when trying to predict the future. This is even more true when there is a lot of hype about a certain product.

Yesterdays price of (say) NVidia was based on the expectation that companies would need to buy N billion of USD of GPUs per year. Now Deepseek comes out and makes a point that N/10 would be enough. From there it can go two ways:

- NVidia's expected future sales drop by 90%.

- The reduced price for LLMs should allow companies to push AI into markets that were previously not cost effective. Maybe this can 10x the total available market, but since the estimated total available market was already ~everything (due to hype) that seems unlikely.

- NVidia finds another usecase for GPUs to offset the reduced demand from AI companies.

In practice, it will probably be some combination of all three. The real problems are not caused for the "shovel sellers" but for companies like OpenAI and Anthropic, who now suddenly have to compete against a competitor that can produce the same product at (apparently) a fraction of the price.

Re: Nvidia’s $589B DeepSeek rout

#85

Post by GuB-42 »

thelastgallon wrote: post #57
nabla9 wrote: post #2

Nvidia -13% in Frankfurt stock market just now. Valuations of private unicorns like OpenAi and Anthropic must be in free fall. DeepSeek spends $6 million in old H800 hardware to develop open source model that overtakes ChatGPT. AI gets better, but profit margins sink with strong competition. Chinese AI startup DeepSeek overtakes ChatGPT on Apple App Store https://news.ycombinator.com/item?id=42839656 Edit: Nvidia now…

[flagged]

The issue here is not that DeepSeek exists as a competitor to GPT, Claude, Gemini,...

The issue is that DeepSeek have shown that you don't need that much raw computing power to run an AI, which means that companies including OpenAI may focus more on efficiency than on throwing more GPUs at the problem, which is not good news for those in the business of making GPUs. At least according to the market.

Re: Nvidia’s $589B DeepSeek rout

#86

Post by p2detar »

sitkack wrote: post #59
fire_lake wrote: post #7

Fascinating. I think Meta is a big winner from this - they still control the content and now mining it for value has been proven even cheaper by DeepSeek.

Yours is the correct take, it isn't about who did it, it was that it was done at all. This shows how effective open source and open development can be. Best way to get a correct answer is ... https://www.phind.com/search?cache=ws3qq1xl8hj4yx1izd5oeda0

Not sure I understand how exactly open source plays a key role here in terms of project development.

Looking at https://github.com/deepseek-ai, those repos have a bunch of of contributors but unless I'm wrong I don't see any significant contributions. What am I missing?

Re: Nvidia’s $589B DeepSeek rout

#87

Post by sekai »

fancyfredbot wrote: post #31

The people writing market commentary are simply making it up. The news about DeepSeek is not new and doesn't reduce the value of ASML. People are selling now because they are scared because the number went down.

Andrej Karpathy was tweeting about DeepSeek a month (!) ago.

"DeepSeek (Chinese AI co) making it look easy today with an open weights release of a frontier-grade LLM trained on a joke of a budget (2048 GPUs for 2 months, $6M)."

https://x.com/karpathy/status/1872362712958906460

Re: Nvidia’s $589B DeepSeek rout

#88

Post by asddubs »

zo1 wrote: post #43

Wow, literally bought more Nvidia shares last week. Just goes to show the stock market is 80% gambling. Me believing in the value of a company is overshadowed by the hype of growth and "future valuation".

the price hasn't even dropped to as low as it was last week

Re: Nvidia’s $589B DeepSeek rout

#89

Post by MadSudaca »

zo1 wrote: post #43

Wow, literally bought more Nvidia shares last week. Just goes to show the stock market is 80% gambling. Me believing in the value of a company is overshadowed by the hype of growth and "future valuation".

If this is gambling, what isn’t gambling? Sometimes things just don’t go the way you want.

A Chinese company coming up with a cheaper alternative to a cutting-edge technology out of nowhere, is an outcome that is hard to predict.

In hindsight, betting on Nvidia maintaining its monopoly on a resource crucial for such an important technology as AI, might not be the best of ideas, but then again, who knows.

Re: Nvidia’s $589B DeepSeek rout

#90

Post by api »

Etheryte wrote: post #38
dogma1138 wrote: post #6

Good time to buy then, I don’t understand how stupid some traders can be. A more efficient model is better for NVIDIA not worse. More compute is still better given the same model. And as more efficient models proliferate it means more edge computing which means more customers with lower negotiating power than Meta and Google… This is like thinking that if people need to dig only 1 day instead of an entire month to ge…

While everything you say may be true, this shows a fundamental misunderstanding about how the modern stock market functions. How much value a company creates is at best tangential and often completely orthogonal to how much the stock is worth. The stock market has always been a Keynesian beauty contest, but in the past few decades, strongly shaped and morphed by attention economies. A good example of this is DJT, a c…

Everything above the street level and physical economy is becoming gambling.

There has always been a component of gambling to all investing, but that component now seems to utterly eclipse everything else. Merit doesn’t even register. Fundamentals don’t register.

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