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The impact of competition and DeepSeek on Nvidia

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Re: The impact of competition and DeepSeek on Nvidia

#341

Post by WalterBright »

pjdesno wrote: post #230
AlanYx wrote: post #209

Earlier quoted context omitted.

Another aspect that reinforces your point is that the ATM push (and subsequent downfall) was not just bandwidth-motivated but also motivated by a belief that ATM's QoS guarantees were necessary. But it turned out that software improvements, notably MPLS to handle QoS, were all that was needed.

Nah, it's mostly just buffering :-) Plus the cell phone industry paved the way for VOIP by getting everyone used to really, really crappy voice quality. Generations of Bell Labs and Bellcore engineers would rather have resigned than be subjected to what's considered acceptable voice quality nowadays...

I've noticed this when talking on the phone with someone with a significant accent.

1. it takes considerable work on my part to understand it on a cell phone

2. it's much easier on POTS

3. it's not a problem on VOIP

4. no issues in person

With all the amazing advances in cell phones, the voice quality of cellular is stuck in the 90's.

Re: The impact of competition and DeepSeek on Nvidia

#342

Post by eikenberry »

xxpor wrote: post #255
dplgk wrote: post #250

Earlier quoted context omitted.

What is OpenAI's first-mover moat? I switched to Claude with absolutely no friction or moat-jumping.

What is Google's first mover moat? I switched to Bing/DuckDuckGo with absolutely no friction or moat jumping. Brands are incredibly powerful when talking about consumer goods.

Google wasn't the first mover in search. They were at least second if not third.

Re: The impact of competition and DeepSeek on Nvidia

#343

Post by fspeech »

aurareturn wrote: post #261
pjdesno wrote: post #176

The description of DeepSeek reminds me of my experience in networking in the late 80s - early 90s. Back then a really big motivator for Asynchronous Transfer Mode (ATM) and fiber-to-the-home was the promise of video on demand, which was a huge market in comparison to the Internet of the day. Just about all the work in this area ignored the potential of advanced video coding algorithms, and assumed that broadcast TV-q…

Doesn’t your point about video compression tech support Nvidia’s bull case? Better video compression led to an explosion in video consumption on the Internet, leading to much more revenue for companies like Comcast, Google, T-Mobile, Verizon, etc. More efficient LLMs lead to much more AI usage. Nvidia, TSMC, etc will benefit.

If you normalize Nvidia's gross margin and take into account of competitors sure. But its current high margin is driven by Big Tech FOMO. Do keep in mind that 90% margin or 10x cost to 50% margin or 2x cost is a 5x price reduction.

Re: The impact of competition and DeepSeek on Nvidia

#344

Post by pillefitz »

mikeyouse wrote: post #183
mikestew wrote: post #173

Earlier quoted context omitted.

It is incredible how this word turned up a short while ago… I’m sure if I looked, I could find quotes from Warren Buffet (the recognized originator of the term) going back a few decades. But your point stands.

Yeah, he's been talking about "economic moats" since at least the 1990s. At least since 1995; https://www.berkshirehathaway.com/letters/1995.html

Nobody claimed it's a new word. Still, the frequency increased 100x over the last days, subjectively speaking.

Re: The impact of competition and DeepSeek on Nvidia

#345

Post by paulddraper »

wtallis wrote: post #328
paulddraper wrote: post #283

Earlier quoted context omitted.

I love algorithms as much the next guy, but not really. DCT was developed in 1972 and has a compression ratio of 100:1. H.264 compresses 2000:1. And standard resolution (480p) is ~1/30th the resolution of 4k. --- I.e. Standard resolution with DCT is smaller than 4k with H.264. Even high-definition (720p) with DCT is only twice the bandwidth of 4k H.264. Modern compression has allowed us to add a bunch more pixels, bu…

The web didn't go from streaming 480p straight to 4k. There were a couple of intermediate jumps in pixel count that were enabled in large part by better compression. Notably, there was a time period where it was important to ensure your computer had hardware support for H.264 decode, because it was taxing on low-power CPUs to do at 1080p and you weren't going to get streamed 1080p content in any simpler, less efficie…

Right.

Modern compression algorithms were developed but not even computationally available for some of the time.

Re: The impact of competition and DeepSeek on Nvidia

#346

Post by JoshTko »

simpaticoder wrote: post #287
tomrod wrote: post #158

Earlier quoted context omitted.

Conversely, how much larger can you scale if frontier models only currently need 3 consumer computers? Imagine having 300. Could you build even better models? Is DeepSeek the right team to deliver that, or can OpenAI, Meta, HF, etc. adapt? Going to be an interesting few months on the market. I think OpenAI lost a LOT in the board fiasco. I am bullish on HF. I anticipate Meta will lose folks to brain drain in response…

>Imagine having 300. Would it not be useful to have multiple independent AIs observing and interacting to build a model of the world? I'm thinking something roughly like the "councelors" in the Civilization games, giving defense/economic/cultural advice, but generalized over any goal-oriented scenario (and including one to take the "user" role). A group of AIs with specific roles interacting with each other seems lik…

This is exactly where Deepseeks enhancements come into play. Essentially deepseek lets the model think out loud via chain of thought (o1 and Claude also do this) but DS also does not supervise the chain of thought, and simply rewards CoT that get the answer correctly. This is just one of the half dozen training optimization that Deepseek has come up with.

Re: The impact of competition and DeepSeek on Nvidia

#347

Post by munksbeer »

onlyrealcuzzo wrote: post #331
aurareturn wrote: post #261

Earlier quoted context omitted.

Doesn’t your point about video compression tech support Nvidia’s bull case? Better video compression led to an explosion in video consumption on the Internet, leading to much more revenue for companies like Comcast, Google, T-Mobile, Verizon, etc. More efficient LLMs lead to much more AI usage. Nvidia, TSMC, etc will benefit.

No - because this eliminates entirely or shifts the majority of work from GPU to CPU - and Nvidia does not sell CPUs. If the AI market gets 10x bigger, and GPU work gets 50% smaller (which is still 5x larger than today) - but Nvidia is priced on 40% growth for the next ten years (28x larger) - there is a price mismatch. It is theoretically possible for a massive reduction in GPU usage or shift from GPU to CPU to bene…

I can see close to zero possibility that the majority of the work will be shifted to the CPU. Anything a CPU can do can just be done better with specialised GPU hardware.

Re: The impact of competition and DeepSeek on Nvidia

#348

Post by yifanl »

aurareturn wrote: post #326
yifanl wrote: post #322

Earlier quoted context omitted.

It does, but proving that it can be done with cheaper (and more importantly for NVidia), lower margin chips breaks the spell that NVidia will just be eating everybody's lunch until the end of time.

If demand for AI chips will increase due to Jevon’s paradox, why would Nvidia’s chips become cheaper? In the long run, yes, they will be cheaper due to more competition and better tech. But next month? It will be more expensive.

The usage of existing but cheaper nvidia chips to make models of similar quality is the main takeaway.

It'll be much harder to convince people to buy the latest and greatest with this out there.

Re: The impact of competition and DeepSeek on Nvidia

#349

Post by fspeech »

UncleOxidant wrote: post #309

Even if DeepSeek has figured out how to do more (or at least as much) with less, doesn't the Jevons Paradox come into play? GPU sales would actually increase because even smaller companies would get the idea that they can compete in a space that only 6 months ago we assumed would be the realm of the large mega tech companies (the Metas, Googles, OpenAIs) since the small players couldn't afford to compete. Now that st…

But why would the customers accept the high prices and high gross margin of Nvidia if they no longer fear missing out with insufficient hardware?

Re: The impact of competition and DeepSeek on Nvidia

#350

Post by bayindirh »

WalterBright wrote: post #341
pjdesno wrote: post #230

Earlier quoted context omitted.

Nah, it's mostly just buffering :-) Plus the cell phone industry paved the way for VOIP by getting everyone used to really, really crappy voice quality. Generations of Bell Labs and Bellcore engineers would rather have resigned than be subjected to what's considered acceptable voice quality nowadays...

I've noticed this when talking on the phone with someone with a significant accent. 1. it takes considerable work on my part to understand it on a cell phone 2. it's much easier on POTS 3. it's not a problem on VOIP 4. no issues in person With all the amazing advances in cell phones, the voice quality of cellular is stuck in the 90's.

I generally travel to Europe, and it baffles why I can't use VoLTE there (maybe my roaming doesn't allow that), and fallback to 3G for voice calls.

At home, I use VoLTE and the sound is almost impeccable, very high quality, but in the places I roam to, what I get is FM quality 3G sound.

It's not that cellular network is incapable of that sound quality, but I don't get to experience it except my home country. Interesting, indeed.

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