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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

#261

Post by fc417fc802 »

gbear605 wrote: post #255
fc417fc802 wrote: post #231

Earlier quoted context omitted.

> the market can't support the cost of generating video. I'd suggest that's only the case given the current quality of output. Media is incredibly expensive to produce. A model capable of sufficiently high quality could charge prices that are absurd by today's standards.

It’s a very small set of buyers that are in that price range. Total annual domestic box office revenue is like $10 billion, maybe $50 billion for global TV and film. And that’s revenue, not profit, and a lot of costs are going to marketing, not to filming and casting. That’s a lot of money, but it’s not the scale that OpenAI and Anthropic are at. Video generation would only make sense at that scale if it was targetin…

Aren't these two largely separate questions? Viability versus if a given incumbent has interest in a market of a given size. With the combination of (at minimum) streaming platforms, the box office, and advertisements video and audio generation would be viable at a remarkably high price point (as compared to the current token prices for other sorts of things). And as the price comes down presumably the market would grow larger - by how much I have no idea but there are certainly a great deal of currently underserved niche markets.

Re: Nvidia is the central bank of AI

#262

Post by [deleted] »

andsoitis wrote: post #237
InsideOutSanta wrote: post #235

Earlier quoted context omitted.

Believing only makes things true for so long until things fall apart. You can't keep burning billions every quarter. At some point, you run out of investors who believe, and the ones you have run out of money (see: Softbank).

Yes of course. Is the point you're actually trying to make that investors are making a pure call, so their belief in the story is misplaced? That they should believe a different story?

[deleted]

Re: Nvidia is the central bank of AI

#263

Post by 0xbadcafebee »

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…

> if OpenAI can’t use the compute, someone else can

How? The hardware is in OpenAI's datacenters. Does Nvidia have a couple hundred semi trucks, contractors, and IT technicians, to repo the hardware and resell it to someone else before it's lost most of its value? These chips will be replaced approx every 3-4 years. So if OpenAI tanks, after Nvidia pays for and waits for the process to collect the hardware, they then have to sell it for pennies on the dollar. They lose almost all the investment.

Also consider that SpaceXAI already had datacenters full of gear that they basically weren't using because nobody wanted their product, so they now rent it to Anthropic. The demand for hardware isn't really there at the scale of OpenAI.

Re: Nvidia is the central bank of AI

#264

Post by indigodaddy »

InsideOutSanta wrote: post #212
indigodaddy wrote: post #178

Earlier quoted context omitted.

oAI isn't anywhere near close to fucked as long as their models are head and shoulders above even the very best open models in terms of tool calling and rock solid stability/reliability for agents/coding harnesses. Which, they are right now and we'll see if open models actually catch up in that regard. Even the "best" open models pale in comparison with tool calling and general "prompt and go do something else for an…

>oAI isn't anywhere near close to fucked as long as their models are head and shoulders above even the very best open models in terms of tool calling and rock solid stability/reliability for agents/coding harnesses That's already not the case today. If you sat me in front of an LLM and told me to figure out if I'm working with K3 or Astra, I could probably do it, but it would take some work to be certain.

Well I could for sure. I guess a lot of this is indeed very anecdotal.

Re: Nvidia is the central bank of AI

#265

Post by e_y_ »

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,…

LLMs needing less compute would actually be a good thing for Nvidia due to Jevons paradox. Right now token costs are an impediment to using AI more broadly, and more efficient models would help adoption in cases where AI has proven to be useful, like coding.

https://en.wikipedia.org/wiki/Jevons_paradox

Re: Nvidia is the central bank of AI

#266

Post by YokoZar »

ElProlactin wrote: post #243
neilwilson wrote: post #124

Earlier quoted context omitted.

All debt is money. Anybody can create money, the trick is getting other people to accept it. Nvidia is vendor financing its output. An ai company order $100m of GPUs. Nvidia delivers and holds onto that debt as an asset - like a bank loan. The production company uses AI to create better plant and purchases $100m of AI tokens to do so. The ai company hold that debt like a bank loan Nvidia requests $100m of production…

You should educate yourself about accounting. First, under US GAAP rules (ASC 606), you cannot recognize revenue from a vendor-financed sale unless it meets certain criteria, the biggest one of which is: it has to be probable that the buyer will actually pay you. If a default is likely, revenue recognition is deferred until cash changes hands. Nvidia's massive revenue is therefore not from a bunch of dubious vendor-f…

"Create money" here doesn't mean literally fluffing the balance sheet like when the fed prints money (which would have accounting differences), it means spending the same money more rapidly than otherwise. This is NVidia's personal contribution to increasing the economy's Money Multiplier [https://en.wikipedia.org/wiki/Money_multiplier], which effectively increases the money supply from the broader economy's perspective.

Re: Nvidia is the central bank of AI

#267

Post by kelvinjps10 »

Waterluvian wrote: post #31
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.

Maybe this is silly of me, but maybe gaming would enjoy an era of hardware upgrades being rather unviable so the focus turns to optimization and aesthetic.

The thing is really that even entry level gaming is getting expensive. I was considering building a pc and everything is expensive, I was going to replace the disk of my ps4 thag I bought used for 100$ and the 1tb ssd costs 150$

Re: Nvidia is the central bank of AI

#268

Post by kelvinjps10 »

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.

Most of the publishers make money on their pc and console games, mobile users barely pay for games although they do pay for microtransactions stuff

Re: Nvidia is the central bank of AI

#269

Post by butterNaN »

phoghed wrote: post #238
lelanthran wrote: post #204

Earlier quoted context omitted.

Problem is conflict of interest: the studies are mostly from the providers of the biggest models, or someone who received free tokens to do the research.

It would be nice to hear exactly how the conflict of interest has impacted the specific studies and how they are wrong rather than conspiracy theory level speculation and hand waving at the entire category

I think is more than reasonable to be suspicious of studies funded by party with conflict of interest. Think of how many studies about climate change were funded by big polluters, for example.

In 2026, the default outlook should be suspicion for any big private organisations with profit motive.

Re: Nvidia is the central bank of AI

#270

Post by fragmede »

wredcoll wrote: post #240
fragmede wrote: post #197

Earlier quoted context omitted.

Cryptocurrency mining had it broken before that. PC gaming's golden years are behind us, as AI, even if not LLMs, seems like it's not going away, so the gaming market is now the niche hobby while AI takes center stage. RIP. My first gaming ~GPU~ (we called them 3d accelerators back then) was a Diamond Monster II with a 3dfx Voodoo 2 chip.

I'm not sure (pc) gaming could ever really actually pay for the continued advancement and mass production of state of the art silicon. The prices of gpus are nuts right now due to demand, but theoretically speaking demand causes more supply to appear and thus decrease prices* and then gamers can reap the benefits of massive amounts of investment. * or at least thats what people on this site keep telling me.

ish. The problem is data center cards won't easily fit a gamer computer chassis, so an H200 for $1,000 in however many years isn't going to be usable unless you also have a chassis which will support it.
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