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Nvidia takes $1B stake in Nokia

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Re: Nvidia takes $1B stake in Nokia

#181

Post by adgjlsfhk1 »

echelon wrote: post #29
wnevets wrote: post #4

Add to the list of AI cash merry go round [1] [1] https://www.youtube.com/watch?v=h3JfOxx6Hh4

This isn't the gotcha everyone in the media thinks it is. Nvidia is using its revenues to quickly invest in bets that are simultaneously customers. If anything, it's a triple win. - taking advantage of cash it needs to deploy - making new investments in areas NVidia wants to shape - making new customers that continue to buy Nvidia GPUs, especially if they're successful Some of these ventures may fail, but it's better…

The problem comes if any of these companies aren't successful with their AI deployments. NVidia is essentially trying to sell GPUs in exchange for stock, but that means if the stock prices of those companies go down, then Nvidia will have payed $1B for the privilege of giving GPUs away below cost.

Re: Nvidia takes $1B stake in Nokia

#182

Post by nabla9 »

throwaway290 wrote: post #159
nabla9 wrote: post #133

Earlier quoted context omitted.

Nokia expanded into data center networks. Nokia sells optical data center interconnects. They also plan to provide AI services in the Edge, that's why Nvidia invested.

are you saying nvidia invests into its customer so that the customer will buy more from nvidia? sounds totally not a bubble.

Nvidia is Nokia customer in data center.

AI-RAN is partnership where Nvidia and Nokia will sell to telecoms and private 5G/6G networks.

Re: Nvidia takes $1B stake in Nokia

#183

Post by reactordev »

ratelimitsteve wrote: post #173
reactordev wrote: post #162

Earlier quoted context omitted.

Strategic Enablement Yup, give them $1B so they can build out AI DC’s stocked with $1B of Nvidia chips.

buy in, let them use your money to buy your product back from you, then if you think they'll actually succeed you make money and if not you can slowly dump that stock back onto the market and end up ahead. you've basically manufactured a customer at that point.

Exactly, the risk is extremely small. If they fail, there will be others too, which means that WSBro’s can bundle and derivatives their way into at least a neural exit.

Re: Nvidia takes $1B stake in Nokia

#184

Post by mring33621 »

gethly wrote: post #161
ambicapter wrote: post #156

Earlier quoted context omitted.

10% seems pretty high, running out of shares to sell of a company you own over the course of a decade? Definitely seems like you're hedging against a downturn.

Facebook too https://fintel.io/n/zuckerberg-mark They know the market is going to crash soon-ish.

I'm not in the crash-soon camp.

It's just smart investing to take some profits at a historic high mark...

Re: Nvidia takes $1B stake in Nokia

#185

Post by Libidinalecon »

chii wrote: post #115
adastra22 wrote: post #107

Earlier quoted context omitted.

The total aggregate loss of value from top to bottom of the dotcom crash was about $5 trillion. That’s the current market cap of NVIDIA alone, to say nothing of other AI companies. So yeah, it has.

that number back in 2000 is about $9.7 trillion adjusted for inflation. You can't merely just compare the numbers at that time with a number today. It's meaningless. You have to compare forward earnings to share-price ratios.

You also can't just leave out the bond market.The dotcom bubble sat on top of the 10 year bond at 5%. The US had a balanced budget and 10X less debt than now. It was the peak of the unipolar moment. Part of the AI bubble is the lack of safe investments to act as a flight to safety. I just don't think they are really comparable. The AI bubble could certainly be more destructive given the circumstances and concentration when it pops, even if not bigger. The other main difference is we actually had the internet in place. So much of what is fueling the AI bubble doesn't even exist.

Re: Nvidia takes $1B stake in Nokia

#186

Post by erikig »

reactordev wrote: post #162
mprovost wrote: post #148

Earlier quoted context omitted.

Yes but they're using this fund to prop up their core business (and share price) by artificially creating demand for their own products. Most of the money that they invest comes back to them when these companies buy GPUs.

Strategic Enablement Yup, give them $1B so they can build out AI DC’s stocked with $1B of Nvidia chips.

More importantly than gaining a client for Nvidia's AI chips, this investment gives the company a solid foothold in a competitor to Broadcom in the wireless, datacenter and networking solutions space. I wouldn't be surprised if Nvidia eventually scoops up all of Nokia.

Re: Nvidia takes $1B stake in Nokia

#187

Post by [deleted] »

signatoremo wrote: post #179
fun444555 wrote: post #100

Earlier quoted context omitted.

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.

Feeling which way? Demand for chips are much higher than it was at the peak of the dot-com bubble. That was a painful period, but only a blip in the history. Everything considered “hype” back then has become reality, at a scale that was beyond any dot-com era expectation.

[deleted]

Re: Nvidia takes $1B stake in Nokia

#188

Post by ksec »

fadedsignal wrote: post #177
mprovost wrote: post #148

Earlier quoted context omitted.

Yes but they're using this fund to prop up their core business (and share price) by artificially creating demand for their own products. Most of the money that they invest comes back to them when these companies buy GPUs.

I think this will continue. They can't change 3GPP's vision with just Nokia. They need to bribe other companies. Ericsson is the other big vendor. I think there is a possibility of that. However, Huawei is impossible. Who is gonna provide a GPU to them? Therefore, they simply can't just put a GPU on every base station around the world.

>Therefore, they simply can't just put a GPU on every base station around the world.

I dont think that is what's happening here. Base station has been power limited for quite some time and part of the whole 5G / Cloud RAN promise was moving a lot of the processing off base station. Ignoring GPU there are a lot of the current stack fits Nvidia portfolio especially DPU. May be Nvidia have figure out a way to use CUDA and have it perform better than Ericsson and Huawei.

Nokia is also the smallest of the three and has been in decline for quite some time. Part of me also wish Nvidia just buy Nokia and start competing against Ericsson and Huawei.

Re: Nvidia takes $1B stake in Nokia

#189

Post by ksec »

erikig wrote: post #186
reactordev wrote: post #162

Earlier quoted context omitted.

Strategic Enablement Yup, give them $1B so they can build out AI DC’s stocked with $1B of Nvidia chips.

More importantly than gaining a client for Nvidia's AI chips, this investment gives the company a solid foothold in a competitor to Broadcom in the wireless, datacenter and networking solutions space. I wouldn't be surprised if Nvidia eventually scoops up all of Nokia.

> I wouldn't be surprised if Nvidia eventually scoops up all of Nokia.

That is what I wish would happen as well.

Re: Nvidia takes $1B stake in Nokia

#190

Post by positron26 »

FinnKuhn wrote: post #137
positron26 wrote: post #116

Earlier quoted context omitted.

The problem is not demand going away. No margin in a late stage company goes unassailed for long. Intel has nothing to lose. AMD has everything to gain. Untold other players are finding oxygen in various places. Nvidia is smart to use their spotlight as long as it lasts, but in their pitch, they're saying, "this will put you ahead," not "this will last forever."

> The problem is not demand going away. The problem for Nvidia is when demand doesn't continue to increase as much as expected.

Unless they have managed to hide a lot of leverage and debt (not investment), that's a problem for their shareholders if they have priced in future growth.

To avoid looping this conversation for the next 2-3 years, we need to get to higher PEs to match the dot com bubble. It's just hard to have a long bubble that collapses without debt and leverage. You need something that compels the market to correct or else the long bubble just stays long. Suddenly I understand why shorting is essential in breaking the back of long bubbles and stabilizing market dynamics.

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