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SoftBank sells its entire stake in Nvidia

cnbc.com

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Re: SoftBank sells its entire stake in Nvidia

#91

Post by Ekaros »

mrdevlar wrote: post #41
lifthrasiir wrote: post #13

Note the first line: > SoftBank said Tuesday it has sold its entire stake in U.S. chipmaker Nvidia for $5.83 billion as the Japanese giant looks to capitalize its “all in” bet on ChatGPT maker OpenAI. They are switching gears, not exiting, folks.

They recognise that the larger bubble is in the datacenters. Most of the hardware we are using was designed for computer graphics not AI. Now that China isn't buying Nvidia any longer and actively trying to get their own companies to produce hardware, what happens to all these datacenters when a company produces a device that has 80% of the performance of the current Nvidia hardware but 20% of its power consumption?

Even double the energy consumption is not that bad for half the price. at 20 cents per kWh over 5 years 1 kW load would be 8760. So from 30000 to 15000 you would still come ahead in cost.

Re: SoftBank sells its entire stake in Nvidia

#92

Post by ForHackernews »

lvl155 wrote: post #83
randomNumber7 wrote: post #40

Earlier quoted context omitted.

I would have thought that the OpenAI bet is way more risky, because if someone comes along with a better model it could really hurt OpenAI. NVIDIA seems harder to dethrone imo.

They probably know more than us. Such as alternative chips or that the Chinese will go in-house sooner than we think. Nvidia’s moat is not as permanent as people think.

Given how poorly Intel and AMD have fared, it suggests the hardware moat is much deeper than the software one.

Re: SoftBank sells its entire stake in Nvidia

#93

Post by ForHackernews »

jorvi wrote: post #84
hobofan wrote: post #49

Earlier quoted context omitted.

In many ways OpenAI is transitioning towards an end-user facing product business. They have by far the strongest brand among consumers and are positioning themselves to take on Google/Meta in the ad business. By proxy, having the strongest frontier model becomes less and less necessary for them and instead building a strong product by properly layering medium-strong models in a cost-efficient way is the priority.

> They have by far the strongest brand They don't really, because of Gemini and Grok. If it was OpenAI vs Claude then yeah, ChatGPT is known whereas Claude you have to be an enthusiast to know. But everyone using Google runs into Gemini and everyone using X runs into Grok, and people talk. Now even the laypeople know there is more than one AI, and they're from big brands that they trust. Which means that people will…

Does anyone trust Xitter? If so, they shouldn't.

Re: SoftBank sells its entire stake in Nvidia

#94

Post by disgruntledphd2 »

lvl155 wrote: post #83
randomNumber7 wrote: post #40

Earlier quoted context omitted.

I would have thought that the OpenAI bet is way more risky, because if someone comes along with a better model it could really hurt OpenAI. NVIDIA seems harder to dethrone imo.

They probably know more than us. Such as alternative chips or that the Chinese will go in-house sooner than we think. Nvidia’s moat is not as permanent as people think.

> They probably know more than us. Such as alternative chips or that the Chinese will go in-house sooner than we think. Nvidia’s moat is not as permanent as people think.

This is Softbank though, they're not really noted for great investment decisions (apart from Alibaba really early on).

Like, my prior is that when Softbank invest in something, the growth is done (but then I am, very much, a cynic).

Re: SoftBank sells its entire stake in Nvidia

#95

Post by sixeyes »

reconnecting wrote: post #7
solumunus wrote: post #2

Good point to cash out in my opinion. Extremely likely you can buy NVDA back cheaper in the future.

$5.83B is too large to be a round trip. This is clearly an exit.

Why would they exit nvidia while still keeping upwards of $10B or whatever it is in OpenAI? Genuine question.

Re: SoftBank sells its entire stake in Nvidia

#96

Post by ForHackernews »

Topfi wrote: post #86
tarsinge wrote: post #65

Earlier quoted context omitted.

This argument regarding brand loyalty gets repeated but it’s really weak to me. The immense majority of people don’t tie their identity to the software services they are using. Without network effects or an ecosystem locking customers will switch as soon as there is a less expensive and/or better alternative, as the history of software has shown countless of times.

Keep in mind how severely the quality of Google search results or e.g. any consumer facing piece of Microsoft software (Windows, Office, OneDrive, etc.) have deteriorated to the point it has far transcended the more nerdy corners of the web, yet both continue to retain a strict grip, thanks to buy in/brand strength.

There's no viable alternative for either of those yet. Massive network effects around Microsoft office, and Google's only real competition is the equally-bad Bing.

Re: SoftBank sells its entire stake in Nvidia

#97

Post by mark_l_watson »

randomNumber7 wrote: post #40
lifthrasiir wrote: post #13

Note the first line: > SoftBank said Tuesday it has sold its entire stake in U.S. chipmaker Nvidia for $5.83 billion as the Japanese giant looks to capitalize its “all in” bet on ChatGPT maker OpenAI. They are switching gears, not exiting, folks.

I would have thought that the OpenAI bet is way more risky, because if someone comes along with a better model it could really hurt OpenAI. NVIDIA seems harder to dethrone imo.

Without a doubt, in my opinion, OpenAI is a risky bet, but perhaps Softbank can make some money on OpenAI and then get out.

Re: SoftBank sells its entire stake in Nvidia

#99

Post by disgruntledphd2 »

hobofan wrote: post #71
nly wrote: post #57

Earlier quoted context omitted.

It's hard to see how they become profitable enough to justify current valuations. The numbers are just mind boggling even in the optimistic scenario.

If they are able to actually successfully pivot into ads as a business model, it's very easy to justify the valuation: Just look at Google/Meta. I'm personally skeptical that they are able to pull off ads, at least on the short timescale they likely need to. They more or less have to nurture/disrupt a whole SEO industry, and the way big corps allocate advertising budgets are very slow to shift (many are still struggl…

> If they are able to actually successfully pivot into ads as a business model, it's very easy to justify the valuation: Just look at Google/Meta.

Ads are not just a switch one can turn on. Firstly, you need to build a decent ad serving/targeting/pacing engine. Secondly (and more importantly) you need to hire a shed ton of sales people (in many, many geos) and then ramp them all up (difficult if you're building the product at the same time).

And then you need to keep at it for 3-5 years minimum before you'll finally get the bigger/more conservative brands/agencies/etc to buy in properly.

At that point, you'll make decent money, after accounting for all of the costs. I'm not sure that you'll make enough money, but it would definitely stanch their bleeding a little.

tl;dr if they haven't already built this ad product, it's unlikely to make a material difference before 2030.

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