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Nvidia’s $589B DeepSeek rout

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Re: Nvidia’s $589B DeepSeek rout

#421

Post by jdietrich »

amazingamazing wrote: post #410
xiphias2 wrote: post #407

Earlier quoted context omitted.

I believe you that it had to do with the selloff, but I believe that efficiency improvements are good news for NVIDIA: each card just got 20x more useful

each card is not 20x more useful lol. there's no evidence yet that the deepseek architecture would even yield a substantially (20x) more performant model with more compute. if there's evidence to the contrary I'd love to see. in any case I don't think a h800 is even 20x better than a h100 anyway, so the 20x increase has to be wrong.

We need GPUs for inference, not just training. The Jevons Paradox suggests that reducing the cost per token will increase the overall demand for inference.

Also, everything we know about LLMs points to an entirely predictable correlation between training compute and performance.

Re: Nvidia’s $589B DeepSeek rout

#422

Post by paxys »

nl wrote: post #417
paxys wrote: post #404

Earlier quoted context omitted.

Nvidia's annual revenue in 2024 was $60B. In comparison, Apple made $391B. Microsoft made $245B. Amazon made $575B. Google made $278B. And Nvidia is worth more than all of them. You'd have to go very far down the list to find a company with a comparable ratio of revenue or income to market cap as Nvidia.

Nvidia's revenue growth rate was 94% and income growth rate was 109% for the Oct 2024 quarter. This compares to Apple's 6% and -35%. Nvidia is growing profits faster than income. Nvidia's net profit margin is 55% (vs Apple 15%) and they have an operating income of $21B vs Apple's $29.5 These are some pretty impressive financial results - those growth rates are the reason people are bullish on it.

Yes revenue has grown xx% in the last quarter and year, but the stock is valued as if it will keep growing at that rate for years to come and no one will challenge them. That is the definition of a bubble.

How sound is the investment thesis when a bunch of online discussions about a technical paper on a new model can cause a 20% overnight selloff? Does Apple drop 20% when Samsung announces a new phone?

Re: Nvidia’s $589B DeepSeek rout

#423

Post by bgnn »

bee_rider wrote: post #297
maxglute wrote: post #274

Earlier quoted context omitted.

Not making the news in western media yet is PRC claims to have started mass producing their indigenous 28nm litho (70% of global wafer use) this month... the estimated cost is 1/30th of ASML machines. Extrapolate and they're on trend of produce 14nm machines at comparable fraction cost in next few years.

It seems hard to extrapolate there—the 30nm-10nm range is where Intel really started to start having trouble, right? Anyway, this seems like a bigger problem for companies whose business model is actually selling those chips. It couldn’t be the case that much of ASML’s valuation is based on people continuing to use their old 28nm machines, right?

Not that hard for China since they have hired a lot of TSMC top emgineers, like the head of TSMC finfet program. TSMC seems to treat them like dirt while they are treated like superstars in China.

Main deficiency they have is in the litho machines.

Re: Nvidia’s $589B DeepSeek rout

#424

Post by acchow »

jmward01 wrote: post #414

So, what are investors thinking to warrant this? If it is 'DeepSeek means you don't need the compute' that is definitely wrong. Making a more efficient x almost always leads to more of x being sold/used, not less. In the long term does anyone believe we won't keep needing more compute and not less? I think the market believes that high end compute is not needed anymore so the stuff in datacenters suddenly just became…

But the SOTA models basically all suck today. If people don’t think they suck, definitely in 1 year they’ll look back and consider those older models unusably bad

Re: Nvidia’s $589B DeepSeek rout

#425

Post by kristianp »

I found the Stratechery and Nadella's takes to be interesting. Also the fact that news orgs say things like:

"The situation is particularly remarkable since, as a Chinese company, DeepSeek lacks access to Nvidia’s state-of-the-art chips used to train AI models powering chatbots like ChatGPT."

Whereas they don't mention the fact that Deepseek still used Nvidia chips. news orgs are implying they didn't.

Stratechery points out that the reduced memory/communications bandwidth of the gimped H800 chips they have access to drove the MOE/MLA architecture developments to make their model possible on the less powerful chips.

Nadella (on X) points out that by Jevons paradox [1], AI usage (and NVidia chip usage) will increase because deepseeks has reduced costs.

One other point Statechery made is that DeepSeek likely distilled the output of leading models for V3 and R1. They have shown that they can replicate the leaders cheaply and quickly, but they can't produce a leading model without copying (yet).

[1] https://x.com/satyanadella/status/1883753899255046301

Re: Nvidia’s $589B DeepSeek rout

#426

Post by amazingamazing »

nl wrote: post #417
paxys wrote: post #404

Earlier quoted context omitted.

Nvidia's annual revenue in 2024 was $60B. In comparison, Apple made $391B. Microsoft made $245B. Amazon made $575B. Google made $278B. And Nvidia is worth more than all of them. You'd have to go very far down the list to find a company with a comparable ratio of revenue or income to market cap as Nvidia.

Nvidia's revenue growth rate was 94% and income growth rate was 109% for the Oct 2024 quarter. This compares to Apple's 6% and -35%. Nvidia is growing profits faster than income. Nvidia's net profit margin is 55% (vs Apple 15%) and they have an operating income of $21B vs Apple's $29.5 These are some pretty impressive financial results - those growth rates are the reason people are bullish on it.

to be fair, there's no way these rates will be sustained for a decade.

Re: Nvidia’s $589B DeepSeek rout

#427

Post by jdietrich »

paxys wrote: post #383
energy123 wrote: post #372

Earlier quoted context omitted.

This is a cookie cutter comment that appears to have been copy pasted from a thread about Gamestop or something. DeepSeek R1 allegedly being almost 50x more compute efficient isn't just a "vague rumor". You do this community a disservice by commenting before understanding what investors are thinking at the current moment.

Has anyone verified DeepSeek's claims about R1? They have literally published one single paper and it has been out for a week. Nothing about what they did changed Nvidia's fundamentals. In fact there was no additional news over the weekend or today morning. The entire market movement is because of a single statement by DeepSeek's CEO from over a week ago. People sold because other people sold. This is exactly how a p…

The weights are public. We can't verify their claims about the amount of compute used for training, but we can trivially verify the claims about inference cost and benchmark performance. On both those counts, DeepSeek have been entirely honest.

Re: Nvidia’s $589B DeepSeek rout

#429

Post by numba888 »

paxys wrote: post #404
belevme wrote: post #368

Earlier quoted context omitted.

I don't think it's fair to say NVDA is meme stock, having reported 35B revenue last quarter.

Nvidia's annual revenue in 2024 was $60B. In comparison, Apple made $391B. Microsoft made $245B. Amazon made $575B. Google made $278B. And Nvidia is worth more than all of them. You'd have to go very far down the list to find a company with a comparable ratio of revenue or income to market cap as Nvidia.

P/E ratio is better indicator. Price/Earnings. NVidia: 46, Microsoft: 35, Apple: 34, Amazon: 50.

As you see NVidia doesn't stand out much, it's even lower than Amazon.

Re: Nvidia’s $589B DeepSeek rout

#430

Post by segasaturn »

xiphias2 wrote: post #407
KiwiJohnno wrote: post #399

Earlier quoted context omitted.

Not quite, I believe this sell off was caused by DeepSeek showing with their new model that the hardware demands of AI are not necessarily as high as everyone has assumed (as required by competing models). I've tried their 7b model, running locally on a 6gb laptop GPU. Its not fast, but the results I've had have rivaled GPT4. Its impressive.

I believe you that it had to do with the selloff, but I believe that efficiency improvements are good news for NVIDIA: each card just got 20x more useful

That still means that that AI firms don't have to buy as many of Nvidia's chips, which is the whole thing that Nvidia's price was predicated on. FB, Google and Microsoft just had their their billions of dollars in Nvidia GPU capex blown out by $5M side-project. Tech firms are probably not going to be as generous shelling out whatever overinflated price Nvidia was asking for as they were a week ago.
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