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Nvidia’s $589B DeepSeek rout

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Re: Nvidia’s $589B DeepSeek rout

#491

Nvidia valuation = $3000B Nvidia profits during AI madness last year = $65B (last 4 quarters) Nvidia profits during normal year = $5B This stock could drop 90% from here, and still be expensive. The numbers are absolutely crazy and make no sense at all. Stargate project is aiming to invest $500B over 4 years. Those $500B are a pipe dream, but let's suppose for a second that all of that $500B will be Nvidia profits an…

but you forgot the 80B from MSFT and 60B from META in 2025 alone? I assume quite a chunk of that investment will be going to NVDA.

Stargate wise, it's a joke, they have no money for their lip service.

Re: Nvidia’s $589B DeepSeek rout

#492

Earlier quoted context omitted.

What a stretch. One Chinese model makes a breakthrough in efficiency and suddenly China has all the best people in the world? What about all the people who invented LLMs and all the necessary hardware here in the US? What about all the models that leapfrog each other in the US every few months? One breakthrough implies that they had a great idea and implemented it well. It doesn’t imply anything more than that.

I can't say about how good they are, but over 400,000 CS graduates in China [1] per year sounds like a lot. https://www.ctol.digital/news/chinas-it-boom-slows-computer-...

The ones I work with are very good :)

Re: Nvidia’s $589B DeepSeek rout

#493
post #341

IMO this is less about DeepSeek and more that Nvidia is essentially a bubble/meme stock that is divorced from the reality of finance and business. People/institutions who bought on nothing but hype are now panic selling. DeepSeek provided the spark, but that's all that was needed, just like how a vague rumor is enough to cause bank runs.

Not quite, I believe this sell off was caused by DeepSeek showing with their new model that the hardware demands of AI are not necessarily as high as everyone has assumed (as required by competing models). I've tried their 7b model, running locally on a 6gb laptop GPU. Its not fast, but the results I've had have rivaled GPT4. Its impressive.

that's a Milchmädchenrechnung. if it turns out that you can achieve status quo with 1% of the expected effort then that just mean you can achieve approximately 10 times the status quo (assuming O(exp)) with the established budget! and this race is a race to the sky (as opposed to the bottom) ... he who reaches AGI first takes the cake, buddy.

Re: Nvidia’s $589B DeepSeek rout

#494

Nvidia valuation = $3000B Nvidia profits during AI madness last year = $65B (last 4 quarters) Nvidia profits during normal year = $5B This stock could drop 90% from here, and still be expensive. The numbers are absolutely crazy and make no sense at all. Stargate project is aiming to invest $500B over 4 years. Those $500B are a pipe dream, but let's suppose for a second that all of that $500B will be Nvidia profits an…

but you forgot the 80B from MSFT and 60B from META in 2025 alone? I assume quite a chunk of that investment will be going to NVDA. Stargate wise, it's a joke, they have no money for their lip service.

Most of it will go towards energy. These companies are building literal power plants to power their data centers.

Re: Nvidia’s $589B DeepSeek rout

#495

Nvidia valuation = $3000B Nvidia profits during AI madness last year = $65B (last 4 quarters) Nvidia profits during normal year = $5B This stock could drop 90% from here, and still be expensive. The numbers are absolutely crazy and make no sense at all. Stargate project is aiming to invest $500B over 4 years. Those $500B are a pipe dream, but let's suppose for a second that all of that $500B will be Nvidia profits an…

Agreed, it's very strange to me that this is being framed in the media as "CHINESE DEEPSEEK DESTROYS US STOCK MARKET". It's a good model, but not so wildly good that it suddenly destroys Nvidia somehow. The stock was (and remains) incredibly overvalued.

This smells a lot to me like someone with deep pockets is looking to get a bailout by framing this as some kind of Chinese threat.

Any time the entire media suddenly agrees on a very strange framing of a story you should immediately be suspicious.

Re: Nvidia’s $589B DeepSeek rout

#496
post #404

Earlier quoted context omitted.

Nvidia's annual revenue in 2024 was $60B. In comparison, Apple made $391B. Microsoft made $245B. Amazon made $575B. Google made $278B. And Nvidia is worth more than all of them. You'd have to go very far down the list to find a company with a comparable ratio of revenue or income to market cap as Nvidia.

P/E ratio is better indicator. Price/Earnings. NVidia: 46, Microsoft: 35, Apple: 34, Amazon: 50. As you see NVidia doesn't stand out much, it's even lower than Amazon.

All of them are overvalued compared to historical average ratios.

And NVDA’s P/E benefits from very recent huge spending that may not continue.

Re: Nvidia’s $589B DeepSeek rout

#497

Nvidia valuation = $3000B Nvidia profits during AI madness last year = $65B (last 4 quarters) Nvidia profits during normal year = $5B This stock could drop 90% from here, and still be expensive. The numbers are absolutely crazy and make no sense at all. Stargate project is aiming to invest $500B over 4 years. Those $500B are a pipe dream, but let's suppose for a second that all of that $500B will be Nvidia profits an…

Agreed, it's very strange to me that this is being framed in the media as "CHINESE DEEPSEEK DESTROYS US STOCK MARKET". It's a good model, but not so wildly good that it suddenly destroys Nvidia somehow. The stock was (and remains) incredibly overvalued. This smells a lot to me like someone with deep pockets is looking to get a bailout by framing this as some kind of Chinese threat. Any time the entire media suddenly…

The vibes market

Re: Nvidia’s $589B DeepSeek rout

#498

Nvidia valuation = $3000B Nvidia profits during AI madness last year = $65B (last 4 quarters) Nvidia profits during normal year = $5B This stock could drop 90% from here, and still be expensive. The numbers are absolutely crazy and make no sense at all. Stargate project is aiming to invest $500B over 4 years. Those $500B are a pipe dream, but let's suppose for a second that all of that $500B will be Nvidia profits an…

The Stargate project does not actual exist. It is just something they completely made up by lumping together data center investments from across the industry and rounded up to the nearest $500B

Indeed, perhaps the plan was to pump certain stocks after they saw the unprecedented post election rally of Tesla and Bitcoin.

And these people complain about the Pelosi index, which is peanuts in comparison.

Re: Nvidia’s $589B DeepSeek rout

#499
post #494

Earlier quoted context omitted.

but you forgot the 80B from MSFT and 60B from META in 2025 alone? I assume quite a chunk of that investment will be going to NVDA. Stargate wise, it's a joke, they have no money for their lip service.

Most of it will go towards energy. These companies are building literal power plants to power their data centers.

>These companies are building literal power plants to power their data centers.

Have any companies publicly announced doing that, let alone actually started the process of building?

Re: Nvidia’s $589B DeepSeek rout

#500
post #424

So, what are investors thinking to warrant this? If it is 'DeepSeek means you don't need the compute' that is definitely wrong. Making a more efficient x almost always leads to more of x being sold/used, not less. In the long term does anyone believe we won't keep needing more compute and not less? I think the market believes that high end compute is not needed anymore so the stuff in datacenters suddenly just became…

But the SOTA models basically all suck today. If people don’t think they suck, definitely in 1 year they’ll look back and consider those older models unusably bad

I recently went to the LLM chat arena and tried my "test input" against the latest frontier models that GPT 3 failed on. This test snippet simply repeats the same four-letter word in a paragraph many times using all of its various possible meanings simultaneously. The request to the AI is to put the meaning of each usage of the word next to it in brackets.

None of the frontier models can do this perfectly. They all screw up to various degrees in various interesting ways. A schoolkid could do this flawlessly.

This is not some contrived test with bizarre picture puzzles as seen in ARC-AGI or testing obscure knowledge about bleeding-edge scientific research. It's simple English comprehension using a word my toddler knows already!

It does reveal the fundamental flaw in all transformer-based models: They're just shifting vectors around with matrices, and are unable to deal with many categories of inputs that cause overlaps or bring too many of the tokens too close to each other in some internal representation. They get muddled up and confused, resulting in errors in the output.

I see similar effects when using LLMs for programming: They get confused when there are many usages of the same identifier or keyword, but with some subtle difference such as being inside a comment, string, or in a local context where the meaning is different.

I suspect this will be eventually fixed, but I haven't seen any fundamental improvement in three years.

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