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Nvidia is the central bank of AI

economist.com

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Re: Nvidia is the central bank of AI

#181

Post by pilooch »

kennywinker wrote: post #137
spott wrote: post #113

Earlier quoted context omitted.

Yea, but they would have to become insolvent in a way that makes compute lose value. The reason Nvidia is comfortable making these deals is because if OpenAI can’t use the compute, someone else can. Granted OpenAI going insolvent likely means a drop in the value of compute…

Compute has already lost value for me. Six months ago I thought you needed a 1T+ model to be useful coding. Now I am able to get by just fine with a 27b model. I see two factors converging to cause a collapse of this house of cards: 1. People are realizing that what they need isn't more general intelligence, it's more specialization. A small but well tuned coding model, a small but well tuned customer service model,…

That's unless the code produced in the future is much more complex than today's.

Re: Nvidia is the central bank of AI

#183

Post by ak_111 »

spott wrote: post #113
master_crab wrote: post #95

Earlier quoted context omitted.

“as long as it’s cash flow continues” is doing a lot of optimistic heavy lifting. The whole premise of the circular financing worry is that Nvidia sits in the middle of all the guarantees made to companies like OpenAI. If any of those companies become insolvent, Nvidia is on the hook for it. Also Nvidia isn’t really creating money. The 500B number is third party capital that already exists (BX, Apollo, etc).

Yea, but they would have to become insolvent in a way that makes compute lose value. The reason Nvidia is comfortable making these deals is because if OpenAI can’t use the compute, someone else can. Granted OpenAI going insolvent likely means a drop in the value of compute…

Devil's advocate: OpenAI not being able to use compute is highly correlated to many other AI companies not being able to find a meaningful use of this compute.

Failure to take into consideration those kind of correlations ("If my biggest client isn't able to buy it, I would be able to find someone else who will") is one of the principle causes why many risk models turned out to be garbage during the Great Financial Crisis.

Re: Nvidia is the central bank of AI

#184

Post by spott »

ak_111 wrote: post #183
spott wrote: post #113

Earlier quoted context omitted.

Yea, but they would have to become insolvent in a way that makes compute lose value. The reason Nvidia is comfortable making these deals is because if OpenAI can’t use the compute, someone else can. Granted OpenAI going insolvent likely means a drop in the value of compute…

Devil's advocate: OpenAI not being able to use compute is highly correlated to many other AI companies not being able to find a meaningful use of this compute. Failure to take into consideration those kind of correlations ("If my biggest client isn't able to buy it, I would be able to find someone else who will") is one of the principle causes why many risk models turned out to be garbage during the Great Financial C…

That is why I added the last line.

But I also doubt Nvidia is on the hook if OpenAI just no longer wants the compute. I bet they are only on the hook if OpenAI cannot pay for it (is insolvent in some way).

I also have to bring up that OpenAI has already spat out an inference chip that beats Nvidia on flops per watt. So they could potentially not need the compute while other ai companies do.

Re: Nvidia is the central bank of AI

#185

Post by sailfast »

einpoklum wrote: post #99
sailfast wrote: post #57

Earlier quoted context omitted.

It would also follow that by increasing the money supply significantly they’re also contributing to inflation a great deal correct? (Given the rest of the economy is not growing at near the same rate as the AI industry)

Regardless of NVIDIA and LLM/AI, the claim that inflation is caused directly, or without-fail, by an increase in money supply - is not well founded. A significant money supply increase may very well have a tiny or possibly even negative price-increasing impact - depending on how money is supplied, to which elements and under what conditions.

It’s a fair point. Definitely depends on the how. I was figuring that adding $500B to a hot part of the economy while the rest of the economy shrinks might nudge a bit toward inflationary tendency, but at this point it’s hard to say what tenets of economics actually hold since the entire concept of “rational actors” went into the dustbin :)

Re: Nvidia is the central bank of AI

#186

Post by adventured »

aurareturn wrote: post #138
Mistletoe wrote: post #24

How many top signals like this article do you need to see before you exit the market? Let’s look to the past: https://www.history.com/articles/1929-stock-market-crash-war...

What indication do you see that we will see a slow down in model capabilities or AI use?

As the breakneck growth slows, the multiples will compress, and the companies will pull back on spending accordingly as they watch their stocks decline and investors demand more conservative spending behavior.

The Internet didn't stop expanding in 2000-2001. Everything got drastically larger over the following two decades. The multiples on earnings did implode for ~15 years however. MSFT stock for one example went nowhere during that time and compressed down to a near single digit PE.

AI will be a minimum of 10x larger in most every regard 20 years out. That has nothing to do with shorter-term multiples given to these companies in relation to the hyper fast growth they have been riding early in the boom.

Re: Nvidia is the central bank of AI

#187

Post by bluefirebrand »

pdpi wrote: post #50
thrownawaysz wrote: post #13

I wonder when they will give up on the gaming market because that could take down several publishers and developers. I really don't think it's an if question but a when because it almost feels like an afterthought at this point (they removed the standalone gaming revenue report from the financial reports this summer). Also I don't think AMD and Intel is capable "to step in" to replace them.

> Also I don't think AMD and Intel is capable "to step in" to replace them. It's kind of weird. nVidia kind of has the PC market cornered, but AMD has had the last couple of generations of Xbox and Playstation. Also, they power the Steam Deck/Machine, and Valve has been contributing a lot of AMD graphics features into the Linux drivers. There is a world where AMD (and maybe even Linux on AMD specifically) becomes the…

> It's kind of weird. nVidia kind of has the PC market cornered, but AMD has had the last couple of generations of Xbox and Playstation

I have been getting the vibes that Sony is positioning themselves to back out of videogames. I don't think we're going to see a PS6.

Re: Nvidia is the central bank of AI

#188

Post by bluefirebrand »

Espressosaurus wrote: post #71
Waterluvian wrote: post #43

Earlier quoted context omitted.

Gaming is a larger market than Hollywood. Maybe it becomes a distraction for Nvidia, but someone will step in. That might actually be a good thing and why Nvidia wont do that: it creates an under served market in which newcomers can cut their teeth.

Much of the gaming market is phone games however, not traditional consoles or PCs. Edit: about half in fact! The rest is shared between the other traditional gaming types.

This feels so insane to me, because I don't think I know anyone who plays phone games

Re: Nvidia is the central bank of AI

#189

Post by zahlman »

pilooch wrote: post #181
kennywinker wrote: post #137

Earlier quoted context omitted.

Compute has already lost value for me. Six months ago I thought you needed a 1T+ model to be useful coding. Now I am able to get by just fine with a 27b model. I see two factors converging to cause a collapse of this house of cards: 1. People are realizing that what they need isn't more general intelligence, it's more specialization. A small but well tuned coding model, a small but well tuned customer service model,…

That's unless the code produced in the future is much more complex than today's.

Sure, but it would be actively bad to make the code more complex simply because we have machinery that helps us deal with the complexity. A big part of how people assess the models' coding capability is whether they create needless, incidental complexity.

Re: Nvidia is the central bank of AI

#190

Post by kennywinker »

jurgenburgen wrote: post #174
kennywinker wrote: post #147

Earlier quoted context omitted.

that.. doesn't make it better

It was replaced by other mechanisms. It’s not literally zero any kind of reserves.

I’m not worried about the lack of reserve, i’m worried about the money shell game where private companies can drive inflation or deflation whichever serves their profit margins best.

The 2008 global financial crisis was a result of this, so not a made up worry.

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