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The impact of competition and DeepSeek on Nvidia

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Re: The impact of competition and DeepSeek on Nvidia

#261

Post by aurareturn »

pjdesno wrote: post #176

The description of DeepSeek reminds me of my experience in networking in the late 80s - early 90s. Back then a really big motivator for Asynchronous Transfer Mode (ATM) and fiber-to-the-home was the promise of video on demand, which was a huge market in comparison to the Internet of the day. Just about all the work in this area ignored the potential of advanced video coding algorithms, and assumed that broadcast TV-q…

Doesn’t your point about video compression tech support Nvidia’s bull case?

Better video compression led to an explosion in video consumption on the Internet, leading to much more revenue for companies like Comcast, Google, T-Mobile, Verizon, etc.

More efficient LLMs lead to much more AI usage. Nvidia, TSMC, etc will benefit.

Re: The impact of competition and DeepSeek on Nvidia

#262

Post by queuebert »

breadwinner wrote: post #26

Great article but it seems to have a fatal flaw. As pointed out in the article, Nvidia has several advantages including: - Better Linux drivers than AMD - CUDA - pytorch is optimized for Nvidia - High-speed interconnect Each of the advantages is under attack: - George Hotz is making better drivers for AMD - MLX, Triton, JAX: Higher level abstractions that compile down to CUDA - Cerbras and Groq solve the interconnect…

Don't forget they bought Mellanox and have their own HBA and switch business.

Re: The impact of competition and DeepSeek on Nvidia

#263

Post by bpt3 »

xxpor wrote: post #255
dplgk wrote: post #250

Earlier quoted context omitted.

What is OpenAI's first-mover moat? I switched to Claude with absolutely no friction or moat-jumping.

What is Google's first mover moat? I switched to Bing/DuckDuckGo with absolutely no friction or moat jumping. Brands are incredibly powerful when talking about consumer goods.

Google's moat was significantly better results than the competition for about 2 decades.

Your analogy is valid at this time, but proves the GP's point, not yours.

Re: The impact of competition and DeepSeek on Nvidia

#264

Post by vFunct »

pjdesno wrote: post #176

The description of DeepSeek reminds me of my experience in networking in the late 80s - early 90s. Back then a really big motivator for Asynchronous Transfer Mode (ATM) and fiber-to-the-home was the promise of video on demand, which was a huge market in comparison to the Internet of the day. Just about all the work in this area ignored the potential of advanced video coding algorithms, and assumed that broadcast TV-q…

I worked on a network that used a protocol very similar to ATM (actually it was the first Iridium satellite network). An internet based on ATM would have been amazing. You’re basically guaranteeing a virtual switched circuit, instead of the packets we have today. The horror of packet switching is all the buffering it needs, since it doesn’t guarantee circuits.

Bandwidth is one thing, but the real benefit is that ATM also guaranteed minimal latencies. You could now shave off another 20-100ms of latency for your FaceTime calls, which is subtle but game changing. Just instant-on high def video communications, as if it were on closed circuits to the next room.

For the same reasons, the AI analogy could benefit from both huge processing as well as stronger algorithms.

Re: The impact of competition and DeepSeek on Nvidia

#265

Post by talldayo »

xxpor wrote: post #255
dplgk wrote: post #250

Earlier quoted context omitted.

What is OpenAI's first-mover moat? I switched to Claude with absolutely no friction or moat-jumping.

What is Google's first mover moat? I switched to Bing/DuckDuckGo with absolutely no friction or moat jumping. Brands are incredibly powerful when talking about consumer goods.

> What is Google's first mover moat?

AdSense

Re: The impact of competition and DeepSeek on Nvidia

#266

Post by aurareturn »

meiraleal wrote: post #257
fairity wrote: post #194

DeepSeek just further reinforces the idea that there is a first-move disadvantage in developing AI models. When someone can replicate your model for 5% of the cost in 2 years, I can only see 2 rational decisions: 1) Start focusing on cost efficiency today to reduce the advantage of the second mover (i.e. trade growth for profitability) 2) Figure out how to build a real competitive moat through one or more of the foll…

DeepSeek is profitable, openai is not. That big expensive moat won't help much when the competition knows how to fly.

DeepSeek is not profitable. As far as I know, they don’t have any significant revenue from their models. Meanwhile, OpenAI has $3.7b in revenue last reported and has high gross margins.

Re: The impact of competition and DeepSeek on Nvidia

#267

Post by aurareturn »

brandonpelfrey wrote: post #157

Great article. I still feel like very few people are viewing the Deepseek effects in the right light. If we are 10x more efficient it's not that we use 1/10th the resources we did before, we expand to have 10x the usage we did before. All technology products have moved this direction. Where there is capacity, we will use it. This argument would not work if we were close to AGI or something and didn't need more, but I…

Yep. I’ve been harping on this. DeepSeek is bullish for Nvidia.

Re: The impact of competition and DeepSeek on Nvidia

#268

Post by vFunct »

aurareturn wrote: post #261
pjdesno wrote: post #176

The description of DeepSeek reminds me of my experience in networking in the late 80s - early 90s. Back then a really big motivator for Asynchronous Transfer Mode (ATM) and fiber-to-the-home was the promise of video on demand, which was a huge market in comparison to the Internet of the day. Just about all the work in this area ignored the potential of advanced video coding algorithms, and assumed that broadcast TV-q…

Doesn’t your point about video compression tech support Nvidia’s bull case? Better video compression led to an explosion in video consumption on the Internet, leading to much more revenue for companies like Comcast, Google, T-Mobile, Verizon, etc. More efficient LLMs lead to much more AI usage. Nvidia, TSMC, etc will benefit.

I agree that advancements like DeepSeek, like transformer models before it, is just going to end up increasing demand.

It’s very shortsighted to think we’re going to need fewer chips because the algorithms got better. The system became more efficient, which causes induced demand.

Re: The impact of competition and DeepSeek on Nvidia

#269

Post by _DeadFred_ »

indymike wrote: post #239

This story could be applied to every tech breakthrough. We start where the breakthrough is moated by hardware, access to knowledge, and IP. Over time: - Competition gets crucial features into cheaper hardware - Work-arounds for most IP are discovered - Knowledge finds a way out of the castle This leads to a "Cambrian explosion" of new devices and software that usually gives rise to some game-changing new ways to use…

It's still wild to me that toasters have always been $20 but extremely expensive lasers, digital chips, amps, motors, LCD screens worked their way down to $20 CD players.

Re: The impact of competition and DeepSeek on Nvidia

#270

Post by fairity »

bpt3 wrote: post #263
xxpor wrote: post #255

Earlier quoted context omitted.

What is Google's first mover moat? I switched to Bing/DuckDuckGo with absolutely no friction or moat jumping. Brands are incredibly powerful when talking about consumer goods.

Google's moat was significantly better results than the competition for about 2 decades. Your analogy is valid at this time, but proves the GP's point, not yours.

I think it's worth double clicking here. Why did Google have significantly better search results for a long time?

1) There was a data flywheel effect, wherein Google was able to improve search results by analyzing the vast amount of user activity on its site.

2) There were real economies of scale in managing the cost of data centers and servers

3) Their advertising business model benefited from network effects, wherein advertisers don't want to bother giving money to a search engine with a much smaller user base. This profitability funded R&D that competitors couldn't match.

There are probably more that I'm missing, but I think the primary takeaway is that Google's scale, in and of itself, led to a better product.

Can the same be said for OpenAI? I can't think of any strong economies of scale or network effects for them, but maybe I'm missing something. Put another way, how does OpenAI's product or business model get significantly better as more people use their service?

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