Earlier quoted context omitted.
Which is not not smart. edit: highlight: "not not". I think it's very smart.
Why is it not smart?
There were two nots
Nvidia takes $1B stake in Nokia
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Re: Nvidia takes $1B stake in Nokia
#92The stock of NVIDIA can buy the 230 smallest S&P 500 companies. Which are still quite big companies. I recently learned this fact and I think it is pretty wild.
Do you mean their market cap? Sure but that doesn’t equal their profits or cash reserves which are considerably less so NVIDIA couldn’t buy the 230 companies even if I wanted to
That’s a good point, which immediately makes me curious — how many of the smallest sp500 companies could nvidia outright purchase (or obtain a majority stake in)? It’s just a curiosity, not trying to demand an answer. I might look at it tomorrow if I have time
Re: Nvidia takes $1B stake in Nokia
#93Earlier quoted context omitted.
Which is not not smart. edit: highlight: "not not". I think it's very smart.
Why is it not smart?
The classical answer would be RCA, who famously bought Carpetland, Banquet Foods, and Hertz car rental, and was bequeathed the moniker "Rugs, Chickens, and Automobiles" by the investment community.
Buying a stake in Nokia is admittedly different than taking it over and managing it, but the danger there is very clear. Distracted management that strays away from core competence can easily kill the golden goose driving revenue.
The contrarian view is that Berkshire Hathaway is able to hold an array of successful manufacturing and service businesses (Kirby vacuum cleaners, Dairy Queen, Clayton Homes, and the prominent Sees Candy) without losing management control of GEICO and their other insurance holdings.
Hopefully, Nvidia sees the example of RCA and Gulf Western, and will not lose focus on their core competence.
RCA famously birthed the semiconductor industry in Taiwan. I think that focused trade regulation would prevent a repeat of that event in modern times.
Edit: It appears that RCA bought Coronet Carpets, not Carpetland.
Re: Nvidia takes $1B stake in Nokia
#94Nvidia seems to be operating more like a sovereign wealth fund than a traditional business. They have a very-in-demand product, that is not likely to last forever, and is getting their fingers in as many pies as possible with the money and influence while they have it.
Perhaps not forever but GPUs for AI is likely to be a very solid and profitable business for a long time. CPUs made plenty of money for their makers in that era.
AI is a bubble and will pop soon, theres no way even 80% of the spending has yielded the returns they were looking for. Nvidia cards will lower in demand though probably the bubble will be a net gain for nvidia over the preceding 4 or 5 years, though it will take them a while to regain their peak market cap
Re: Nvidia takes $1B stake in Nokia
#95Earlier quoted context omitted.
> They definitely did, Intel existing is probably an issue of national security at this point, if Intel fell then there'd be the risk of some other nation's company being part of the duopoly. Mind elaborating? Who are the players in the duopoly?
We currently have an all American oligopoly on the CPU market - Intel, AMD, Apple(ARM) and Qualcomm(ARM). There's hardly any non-American CPU designers out there
I'm not sure why Arm is in parenthesis twice, when it's a full-blown, non-American CPU designer on whose coat-tails Apple and Qualcomm have been riding.
Risc-V moved HQs to be a non-American CPU designer, but perhaps you don't find them credible (yet).
Re: Nvidia takes $1B stake in Nokia
#96Nvidia seems to be operating more like a sovereign wealth fund than a traditional business. They have a very-in-demand product, that is not likely to last forever, and is getting their fingers in as many pies as possible with the money and influence while they have it.
Perhaps not forever but GPUs for AI is likely to be a very solid and profitable business for a long time. CPUs made plenty of money for their makers in that era.
AI, while undeniably powerful and transformative, is in the midst of the biggest, most insane tech bubble we have ever seen. And nearly all of that money is ending up, directly or indirectly, in GPU data centers. And NVIDIA is the largest cost (profit maker) there.
When that investment firehouse gets turned off, the AI providers will stop building new data centers. Likely for some years. That revenue stream for NVIDIA will go to zero so fast…
The unknown, as with any bubble, is timing.
Re: Nvidia takes $1B stake in Nokia
#97Earlier quoted context omitted.
Perhaps not forever but GPUs for AI is likely to be a very solid and profitable business for a long time. CPUs made plenty of money for their makers in that era.
AI, while undeniably powerful and transformative, is in the midst of the biggest, most insane tech bubble we have ever seen. And nearly all of that money is ending up, directly or indirectly, in GPU data centers. And NVIDIA is the largest cost (profit maker) there. When that investment firehouse gets turned off, the AI providers will stop building new data centers. Likely for some years. That revenue stream for NVIDI…
> most insane tech bubble we have ever seen.
the current "bubble" hasn't surpassed the dot-com boom yet.
Re: Nvidia takes $1B stake in Nokia
#98Nokia today is the combination of the network businesses of Nokia, Siemens, Alcatel and Lucent. They have substantial operations in North America. T-Mobile uses primarily their hardware. Nokia still operates Bell Labs which came originally from AT&T via Lucent. As the other global options for network hardware are Ericsson, Samsung and Huawei, Nokia is the closest to a “Made in USA” solution. Its HQ is in Finland but…
What do you imply with "atleast its a nato country"? Its not like finland have ever been anti-west, if this was your point. Nato alone does not imply pro-west (the US/trump leadership being the prime example)
Re: Nvidia takes $1B stake in Nokia
#99Earlier quoted context omitted.
Perhaps not forever but GPUs for AI is likely to be a very solid and profitable business for a long time. CPUs made plenty of money for their makers in that era.
AI, while undeniably powerful and transformative, is in the midst of the biggest, most insane tech bubble we have ever seen. And nearly all of that money is ending up, directly or indirectly, in GPU data centers. And NVIDIA is the largest cost (profit maker) there. When that investment firehouse gets turned off, the AI providers will stop building new data centers. Likely for some years. That revenue stream for NVIDI…
Demand for chips has only increased since their invention and never gone down, much less "to zero." Chips are a critical part of the tech business for the foreseeable future, regardless of what happens with AI or any other use case for them. They're raw material for computing, and computing use only goes up.
Re: Nvidia takes $1B stake in Nokia
#100Earlier quoted context omitted.
AI, while undeniably powerful and transformative, is in the midst of the biggest, most insane tech bubble we have ever seen. And nearly all of that money is ending up, directly or indirectly, in GPU data centers. And NVIDIA is the largest cost (profit maker) there. When that investment firehouse gets turned off, the AI providers will stop building new data centers. Likely for some years. That revenue stream for NVIDI…
Demand for chips has only increased since their invention and never gone down, much less "to zero." Chips are a critical part of the tech business for the foreseeable future, regardless of what happens with AI or any other use case for them. They're raw material for computing, and computing use only goes up.
Man, I feel old. I remember feeling this way during dot-com bubble. The few months of unemployment grounded me. Anyway, better positioned this time. History is a good teacher.