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Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

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Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#51

Post by skrebbel »

mg wrote: post #18

Fiber networks were using less than 0.002% of available capacity, with potential for 60,000x speed increases. It was just too early. I doubt we will see unused GPU capacity. As soon as we can prompt "Think about the codebase over night. Try different ways to refactor it. Tomorrow, show me your best solution." we will want as much GPU time at the current rate as possible. If a minute of GPU usage is currently $0.10, a…

> improved codebase

I've seen lots of claims about AI coding skill, but that one might be able to improve (and not merely passably extend) a codebase is a new one. I'd want to see it before I believe it.

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#52

Post by SiempreViernes »

xadhominemx wrote: post #43
digitcatphd wrote: post #35

The biggest issue with Nvidia is their revenue is not recurring but the market is treating their stock as it were, which is correlated with all semi stocks, with a one-time massive CAPEX investment lasting 1-2 years. Simple as this - as to why its just not possible for this to continue.

NVDA stock does not trade at a huge multiple. Only 25x EPS despite very rapid top line growth and a dominant position at the eve of possibly the most important technology transition in the history of humankind. The market is (and has been) pricing in a slowdown.

Since you aren't talking about the green transition, whatever technology transition you have in mind is obviously second most important at best.

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#53

Post by xadhominemx »

SiempreViernes wrote: post #52
xadhominemx wrote: post #43

Earlier quoted context omitted.

NVDA stock does not trade at a huge multiple. Only 25x EPS despite very rapid top line growth and a dominant position at the eve of possibly the most important technology transition in the history of humankind. The market is (and has been) pricing in a slowdown.

Since you aren't talking about the green transition, whatever technology transition you have in mind is obviously second most important at best.

If we get ASI it will figure out how to do the green transition for us!

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#54

Post by awongh »

hackthemack wrote: post #10

I worked at a mom and pop ISP in the 90s. Lucent did seem at the forefront of internet equipment at the time. We used Portmaster 3s to handle dial up connections. We also looked into very early wireless technology from Lucent. Something I wanted to mention, only somewhat tanget. The Telecommunications Act of 1996 forced telecommunication companies to lease out their infrastructure. It massively reduced the prices an…

You're implying only 4 years of regulation was enough to shift the balance of power between telecoms and smaller ISPs."

If it's true that this regulation was what helped jumpstart the internet it's an interesting counterpoint to the apocalyptic predictions of people when these regulations are undone. (net neutrality comes to mind as well)

I've never heard anyone claim before that just having these laws on the books for a small period of time is "enough".

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#55

Post by marginalia_nu »

Cheer2171 wrote: post #49
cl42 wrote: post #25

Earlier quoted context omitted.

Not sure why you're getting downvoted. If you speak with AI researchers, they all seem reasonable in their expectations. ... but I work with non-technical business people across industries and their expectations are NOT reasonable. They expect ChatGPT to do their entire job for $20/month and hire, plan, budget accordingly. 12 months later, when things don't work out, their response to AI goes to the other end of the…

> their expectations are NOT reasonable. They expect ChatGPT to do their entire job for $20/month and hire, plan, budget accordingly. This is entirely on the AI companies and their boosters. Sam Altman literally says gpt 5 is "like having a team of PhD-level experts in your pocket." All the commercials sell this fantasy.

This is really the biggest red flag, non-technical people's (by extension investors and policymakers) general lack of understanding of the technology and its limitations.

Of course the valuation is going to be insanely inflated if investors think they are investing in literal magic.

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#56

Post by marcusb »

hackthemack wrote: post #10

I worked at a mom and pop ISP in the 90s. Lucent did seem at the forefront of internet equipment at the time. We used Portmaster 3s to handle dial up connections. We also looked into very early wireless technology from Lucent. Something I wanted to mention, only somewhat tanget. The Telecommunications Act of 1996 forced telecommunication companies to lease out their infrastructure. It massively reduced the prices an…

> I think a T1 went from 1800 a month in 1996, to around 600 a month in 1999. It was a long time ago, so my memory is hazy.

It varied a lot by region. At the mom and pop ISP I worked at, we went from paying around $1,500/month for a T1 to $500 to, eventually around $100/month for the T1 loop to the customer plus a few grand a month for an OC12 SONET ring that we used to backhaul the T1 (and other circuits) back to our datacenter.

But, all of it was driven by the Telecommunications Act requirement for ILECs to sell unbundled network facilities - all of the CLECs we purchased from were using the local ILEC for the physical part of the last mile for most (> 75%) of the circuits they sold us.

One interesting thing that happened was that for a while in the late 90’s, when dialup was still a thing, we could buy a voice T1 PRI for substantially less than a data T1 ($250 for the PRI vs $500 for the T1.) The CLEC’s theory was our dialup customers almost all had service from the local ILEC, and the CLEC would be paid “reciprocal compensation” fees by the ILEC for the CLEC accepting calls from them.

In my market, when the telecommunications act reform act was gutted, the ILEC just kept on selling wholesale/unbundled services to us. I think they had figured out at that point that it was a very profitable line of business if they approached it the right way.

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#57

Post by beerandt »

Zigurd wrote: post #24
pragmatic wrote: post #17

At a "telecom of telecom" we (they) were still lighting up dark fiber 15 years later (2015) when mobile data for cell carriers finally created enough demand. Hard to fathom the amount of overbuild. The only difference is fiber optic lines remained useful the whole time. Will these cards have the same longevity? (I have no idea just sharing anecdata)

New fiber isn't significantly more power efficient. The other side of the coin is that backhoes haven't become more efficient since the fiber was buried.

Directional drilling is a game changer and has become accessible in the last decade.

You're looking for advancement in carriages unaware of the 'automobile' that made 5g and ftth deployment at scale possible.

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#58

Post by Printerisreal »

stephc_int13 wrote: post #27

Knowing history of past bubbles is only mildly informative. The dotcom bubble was different than the railroads bubble etc. The only thing to keep in mind is that all of this is about business and ROI. Given the colossal investments, even if the companies finances are healthy and not fraudulent, the economic returns have to be unprecedented or there will be a crash. They are all chasing a golden goose.

This time they have fiat money and government on their side. so that is also different.

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#59

Post by digitcatphd »

xadhominemx wrote: post #43
digitcatphd wrote: post #35

The biggest issue with Nvidia is their revenue is not recurring but the market is treating their stock as it were, which is correlated with all semi stocks, with a one-time massive CAPEX investment lasting 1-2 years. Simple as this - as to why its just not possible for this to continue.

NVDA stock does not trade at a huge multiple. Only 25x EPS despite very rapid top line growth and a dominant position at the eve of possibly the most important technology transition in the history of humankind. The market is (and has been) pricing in a slowdown.

What do you think is going to happen to their earnings when CAPEX slows?

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#60

Post by jauntywundrkind »

hackthemack wrote: post #10

I worked at a mom and pop ISP in the 90s. Lucent did seem at the forefront of internet equipment at the time. We used Portmaster 3s to handle dial up connections. We also looked into very early wireless technology from Lucent. Something I wanted to mention, only somewhat tanget. The Telecommunications Act of 1996 forced telecommunication companies to lease out their infrastructure. It massively reduced the prices an…

Th gutting of telecom competition, the allowance of total monopoly power, was a travesty of the court system. The law was quite plain & clear & the courts decided all on their own that, well, since fiber to the home is expensive to deploy, we are going to overrule the legislative body. The courts aren't supposed to be able to overturn laws they don't like as they please but that's what happened here.

Regarding the price of connection, it's also worth mentioning that while T1 and other T-channel and OCx connection remains in high use, 1996-1999 is also the period where DSL became readily available & was a very fine choice for many needs. This certainly created significant cost pressure on other connectivity options.

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