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Nvidia's Risky Business

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Re: Nvidia's Risky Business

#21

Post by onlyrealcuzzo »

jcfrei wrote: post #17

In many investment theses - like Nvidia's bet that demand for compute will keep growing - the first order assumption is usually correct. Yes, demand for more compute, chips, infrastructure is huge and each year some additional data centers will be built. Where such investment bets usually fail is in the second-order assumptions: Ie. the expectation of the growth of demand. This is where there's a high chance that the…

What makes this insanely hard to predict is that the compute needed for the same quality output has roughly gone down 90% every 18 months for ~5 years.

1) We don't know how long that trend will continue, but you do know where to look for when it may end (if smaller sized models continue to compress the knowledge effectively of larger models).

2) We don't know when the appetite for higher cost models might go down and by how much if smaller models get "good enough" and price becomes far more important.

It is entirely possible that 5 years from now, there's >100x LLM inference going on - but demand for AI chips (including memory) is only 2x or less.

It is also entirely possible that at some size - LLMs pick up some emergent capability that doesn't scale well to smaller sizes - and that there's an incredible boost to demand to get that capability.

It's just very hard to predict.

Re: Nvidia's Risky Business

#23

Post by doctorwho42 »

moralestapia wrote: post #5
wongarsu wrote: post #3

Earlier quoted context omitted.

Even in the west, Nvidia's dominance is bound to weaken. There is a notable uptick of articles on HN about people running large models on AMD hardware. And while I don't know official sales figures, I know we have trouble getting our AMD system delivered AMD's software story is still a lot worse than Nvidia's. But patching up vllm to run one or two models you care about on AMD hardware is a much easier proposition th…

nVidia will fail right after reaching an 8 trillion valuation and supplying 80% of the world's hardware! Trust me guys, it's over!

I think this is a great example of the disconnect people have in these types of conversations.

You can both become a company that supplies 80% of the world with your type of product, and then still have your stock go down in value.

All it takes is over evaluation by the stock market. Then a course correction from unsustained growth on growth (second order). So even if you continually replace YoY 80% of the world's hardware on a rotating business, but you don't increase market share or increase demand (aka growth)... Your business looks stagnant to the stock market, and there isn't really anything you can do about it. The best you can do is track inflation +/- 2%.

And that's why a lot of older established companies were dividend stocks. You don't expect to growth anymore, but that's not where the value is anymore... The value is in the reliable sales that will happen after infinitum because your company controls a majority share of the business... And that's ok! Unfortunately, silicon valley has created a philosophy of 'you gotta expand into new fields or your on the decline' - aka neo-monopolization

Re: Nvidia's Risky Business

#25

Post by Theodores »

Erikun wrote: post #14

I see we have reached the stock market phase of Universal Paperclips.

Phew. I thought we were just about to leave it, albeit not quite getting to space, just dissolving the financial system so our AI overlords can make some more harvester drones.

Re: Nvidia's Risky Business

#26

Post by acdha »

moralestapia wrote: post #5
wongarsu wrote: post #3

Earlier quoted context omitted.

Even in the west, Nvidia's dominance is bound to weaken. There is a notable uptick of articles on HN about people running large models on AMD hardware. And while I don't know official sales figures, I know we have trouble getting our AMD system delivered AMD's software story is still a lot worse than Nvidia's. But patching up vllm to run one or two models you care about on AMD hardware is a much easier proposition th…

nVidia will fail right after reaching an 8 trillion valuation and supplying 80% of the world's hardware! Trust me guys, it's over!

Nobody is saying they’re outright failing, but that they’re not going to be printing money the way they have been recently. Think about Intel circa 2010: most of their competitors like POWER or MIPS were marginalized, they owned the desktop and server markets with a bit of competition from AMD well contained, and their biggest desktop competitor (Apple) had just switched. A lot of analyst predictions … did not match what happened next. The same was true of Cisco a decade earlier. Both companies are still there but they don’t set the terms in their market segments.

I’m not predicting Nvidia will MBA themselves to death in the near future but I think there’s a tendency to overstate how profitable companies will stay. The more money Nvidia makes, the more motivated their competitors will be to get a piece of that market and the more customers will be looking for alternatives like the push into TPUs which the article discussed.

The current administration is definitely corrupt enough that you could imagine an anti-competitive deal of some sort but I don’t think there’s a way for even that to change matters because key competitors are well-connected American companies willing to play that game, too.

Re: Nvidia's Risky Business

#27

Post by KaiMagnus »

IMO focusing on the hyperscalers is kind of misleading.

Yes, for programmers and tech companies AI is kinda boring now, but AI integration in general is still kind of uncharted territory.

There are so many small companies and individuals just getting started with AI today and I believe a large the customer base (and revenue) is still untapped. Hell, I’m discovering new use cases regularly still and the average mismanaged 30 people whatever SaaS vendor probably didn’t even get started yet.

Re: Nvidia's Risky Business

#29

Post by godshatter »

tolugenius wrote: post #2

More interesting take on Nvidia's position than I've come across before. One thing to be noted is 1) Nvidia is already making moves in robotics so even if their position in AI (moreso llms) diminished, they certainly have another big avenue arguably harder to just get into (although I'm not sure what efforts Google is doing for the tpu in robotics). Another point is Nvidia is still the main player in the west , that…

I'm just hoping that some day they can get back into the relatively small market of gaming gpus, even if for just nostalgia sake.
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