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Nvidia’s $589B DeepSeek rout

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Re: Nvidia’s $589B DeepSeek rout

#461

Post by flowerlad »

segasaturn wrote: post #430
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

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.

> That still means that that AI firms don't have to buy as many of Nvidia's chips

Couldn’t you say that about Blackwell as well? Blackwell is 25x more energy-efficient for generative AI tasks and offer up to 2.5x faster AI training performance overall.

Re: Nvidia’s $589B DeepSeek rout

#462

Post by culi »

linkregister wrote: post #408
h1h1hh1h1h1 wrote: post #334

So the Chinese graciously gift a paper and model which describes methods that radically increase the efficiency of hardware which will allow US AI firms to create much better models due to having significantly more AI hardware and people are bearish on US AI now?

> the Chinese Daya Guo, Dejian Yang, Haowei Zhang, et.al., quant researchers at High Flyer, a hedge fund based in China, open-sourced their work on a chain-of-thought reasoning model, based on Qwen and LLama (open source LLMs). It would be somewhat bizarre to describe Meta's open sourcing of LLama as "the Americans gifting a model", despite Meta having a corporate headquarters in the United States.

Thank you. The amount of casual sinophobia allowed on hackernews has been a real turn off. I find myself avoiding threads like these in anticipation of these comments

Re: Nvidia’s $589B DeepSeek rout

#463

Post by alfalfasprout »

segasaturn wrote: post #430
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

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.

Wrong conclusion, IMO. This makes inference more cost effective which means self-hosting suddenly becomes more attractive to a wider share of the market.

GPUs will continue to be bought up as fast as fabs can spit them out.

Re: Nvidia’s $589B DeepSeek rout

#464

Post by m3kw9 »

What people are betting on by selling is there would be a short term pause or deceleration in the investment while they try to squeeze more from their current batch, could be some efficiency catchup

Re: Nvidia’s $589B DeepSeek rout

#465

Post by segmondy »

paxys wrote: post #341

IMO this is less about DeepSeek and more that Nvidia is essentially a bubble/meme stock that is divorced from the reality of finance and business. People/institutions who bought on nothing but hype are now panic selling. DeepSeek provided the spark, but that's all that was needed, just like how a vague rumor is enough to cause bank runs.

Nah, this is not about Nvidia being a bubble. This is about people forgetting that software will keep eating the world and Nvidia is a hardware company no matter how many times people say it's a software company and talk about Cuda. Yes, CUDA is their moat, but they are not a software company. See my post on reddit from 10 months ago about this happening.

https://www.reddit.com/r/LocalLLaMA/comments/1c0je6h/comment...

"The biggest threat to NVIDIA is not AMD, Intel or Google's TPU. It's software. Sofware eats the world!"

"That's what software is going to do. A new architecture/algorithm that allows us current performance with 50% of the hardware, would change everything. What would that mean? If Nvidia had it in the books to sell N hardware, all of a sudden the demand won't exist since N compute can be realized with the new software and existing hardware. Hardware that might not have been attractive like AMD, Intel or even older hardware would become attractive. They would have to cut their price so much, the violent exodus from their stocks will be shocking. Lots of people are going to get rich via Nvidia, lots are going to get poor after the fact. It's not going to be because of hardware, but software."

A lot of people are saying that I'm wrong on other hardware like AMD or Intel, but this article by Stratechery agrees, all other hardware vendors are possibly relevant again. I didn't talk about Apple because I was focused on the server side, Apple has already won the consumer side and is so far ahead and waiting for the tech to catch up to it.

The biggest threat to Nvidia is still more software optimization.

Re: Nvidia’s $589B DeepSeek rout

#466

Post by marcosdumay »

cortesoft wrote: post #395
pokstad wrote: post #377

Earlier quoted context omitted.

Or you could argue you can now do 45x greater things with the same hardware. You can take an optimistic stance on this.

For the overall economy, sure... for Nvidia, no A huge increase in fuel efficiency is great for the economy, horrible for fuel companies

Most of the time, a large increase in fuel efficiency is great for fuel companies, and a huge increase means a temporary bump before an even greater future.

Re: Nvidia’s $589B DeepSeek rout

#467

Post by slashdev »

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.

Stock market valuations are not about current revenue. That’s just a fundamental disconnect from how the financial markets work.

In theory it’s more about forward profits per share, taking into account growth over many years. And Nvidia is growing faster than any company with that much revenue.

Obviously the future is hard to predict, which leaves a lot of wiggle room.

But I say in theory, because in practice it’s more about global liquidity. It has a lot to do with passive investing being so dominant and money flows.

Money printer goes brrr and stonks go up.

That is not the only thing that matters, but it seems to be the main thing.

If it were really about future profits most of these companies would long since be uninvestable. The valuations are too high to expect a positive ROI.

Re: Nvidia’s $589B DeepSeek rout

#468

Post by tempeler »

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.

People do not understand. If you want to make money in the stock market, find growing companies. Pricing of the growing companies is different from others. Since it is not clear when the growth will end, there is a high probability that there will be extreme things in pricing. Since they are market leadership and can lead the price. Don't compare growing companies with others. That's a big fallacy. Their price always overshooted. I don't have any investments in Nvidia, but reality is that. This is why economists always talk about growth.

Re: Nvidia’s $589B DeepSeek rout

#469

Post by mullingitover »

cortesoft wrote: post #395
pokstad wrote: post #377

Earlier quoted context omitted.

Or you could argue you can now do 45x greater things with the same hardware. You can take an optimistic stance on this.

For the overall economy, sure... for Nvidia, no A huge increase in fuel efficiency is great for the economy, horrible for fuel companies

Nvidia isn't the fuel company. They're the auto manufacturer.

Re: Nvidia’s $589B DeepSeek rout

#470

Post by uxhacker »

segasaturn wrote: post #430
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

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.

It means personal ai on every computer. No privacy concerns, but saying that it is quite weird coming from a Chinese start up :)
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