Nvidia’s $589B DeepSeek rout

Post by wisty » Tue, Jan 28, 2025, 4:31 AM UTC

JumpCrisscross wrote: post #573

addicted wrote: post #561

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What you are missing is that it turns out the gold isn’t actually gold. It’s bronze. So earliest, the shovelers were willing to spend thousands of dollars for a single shovel because they were expecting to get much more valuable gold out the other end. But now that it’s only bronze, they can’t spend that much money on their tools anymore to make their venture profitable. A lot of shovelers are gonna drop out of the r…

> it turns out the gold isn’t actually gold. It’s bronze. The gold is still gold. We just thought it was 10,000 feet down, which requires lots of shovels, when it was actually just under the surface.

Post by wisty » Tue, Jan 28, 2025, 4:37 AM UTC

puppymaster wrote: post #549

elihu wrote: post #450

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Jevon's paradox would imply that there's good reason to think that demand for shovels will increase. AI doesn't seem to be one of those things where society as a whole will say, "we have enough of that; we don't need any more". (Many individual people are already saying that, but they aren't the people buying the GPUs for this in the first place. Steam engines weren't universally popular either when they were introdu…

I also dont get how this is bearish for NVDA. Before this, small to mid companies would give up on finetuning their own model because openai is just so much better and cheaper. Now deepseek SOTA model gives them much better quality baseline model to train on. Wouldn't more people want to RAG on top of deepseek? or some startups accountant would run the numbers and figures we can just inference the shit out of deepsee…

Post by esafak » Tue, Jan 28, 2025, 4:39 AM UTC

yo-cuddles wrote: post #448

Sol- wrote: post #54

I find it interesting because the DeepSeek stuff, while very cool, doesn't seem invalidate that more compute wouldn't translate to even _higher_ capabilities? It's amazing what they did with a limited budget, but instead of the takeaway being "we don't need that much compute to achieve X", it could also be, "These new results show that we can achieve even 1000*X with our currently planned compute buildout" But perhap…

Probably not. If the price of Nvidia is dropping, it's because investors see a world where Nvidia hardware is less valuable, probably because it will be used less. You can't do the distill/magnify cycle like you do with alphago. LLM models have basically stalled in their base capabilities, pre training is basically over at this point, so the news arms race will be over marginal capability gains and (mostly) making th…

Post by deadbabe » Tue, Jan 28, 2025, 4:40 AM UTC

Aloisius wrote: post #621

aurareturn wrote: post #608

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I think you’re wrong and Wallstreet got Deepseek’s impact wrong. You say DeepSeek should decrease Nvidia demand. Wallstreet agreed today. I say DeepSeek should increase Nvidia’s demand due to Jevon’s Paradox.

> Jevon’s Paradox I've now seen this referenced two dozen times today which is well up from the 0 times I've seen it over the past year. Is there some recent article referencing it that everyone is regurgitating?

Post by flashman » Tue, Jan 28, 2025, 4:44 AM UTC

Rury wrote: post #612

flashman wrote: post #597

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I think it's entirely possible that one categorically can't think correctly about markets and equity valuations since they are vibes-based. Post hoc, sure, but not ahead of time.

Most people don't care about the fundamentals of equity valuations is the crux of it. If they can make money via derivatives, who cares about the underlying valuations? I mean just look at GME for one example, it's been mostly a squeeze driven play between speculators. And then you have the massive dispersion trade that's been happening on the SP500 over the last year+. And when most people invest in index funds, and…