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SoftBank sells its entire stake in Nvidia

cnbc.com

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Re: SoftBank sells its entire stake in Nvidia

#81

Post by stingraycharles »

tarsinge wrote: post #65
hobofan wrote: post #49

Earlier quoted context omitted.

In many ways OpenAI is transitioning towards an end-user facing product business. They have by far the strongest brand among consumers and are positioning themselves to take on Google/Meta in the ad business. By proxy, having the strongest frontier model becomes less and less necessary for them and instead building a strong product by properly layering medium-strong models in a cost-efficient way is the priority.

This argument regarding brand loyalty gets repeated but it’s really weak to me. The immense majority of people don’t tie their identity to the software services they are using. Without network effects or an ecosystem locking customers will switch as soon as there is a less expensive and/or better alternative, as the history of software has shown countless of times.

no but there’s the network effect that Google has / once had with search that OpenAI has with ChatGPT: user interactions. all that data and classification will help tremendously getting better datasets, which is equally important (or more important) than better algorithms.

Re: SoftBank sells its entire stake in Nvidia

#82

Post by iso1631 »

NitpickLawyer wrote: post #68
nly wrote: post #57

Earlier quoted context omitted.

It's hard to see how they become profitable enough to justify current valuations. The numbers are just mind boggling even in the optimistic scenario.

I can see a world where if everything they do pans out, on average 1B "entities" end up paying 20$/mo to openAI, via the myriad of integrations they end up supporting. Where entity can be a user, and one human can have many entities (i.e. a work account where the company pays, a personal account, etc). That'd be a quarter of a T$ revenue / year. Dunno, while the number is so large it's hard to compute, it somewhat se…

And then they'll ruin it all by injecting adverts to get an extra $20b a year in revenue

Re: SoftBank sells its entire stake in Nvidia

#83

Post by lvl155 »

randomNumber7 wrote: post #40
lifthrasiir wrote: post #13

Note the first line: > SoftBank said Tuesday it has sold its entire stake in U.S. chipmaker Nvidia for $5.83 billion as the Japanese giant looks to capitalize its “all in” bet on ChatGPT maker OpenAI. They are switching gears, not exiting, folks.

I would have thought that the OpenAI bet is way more risky, because if someone comes along with a better model it could really hurt OpenAI. NVIDIA seems harder to dethrone imo.

They probably know more than us. Such as alternative chips or that the Chinese will go in-house sooner than we think. Nvidia’s moat is not as permanent as people think.

Re: SoftBank sells its entire stake in Nvidia

#84

Post by jorvi »

hobofan wrote: post #49
randomNumber7 wrote: post #40

Earlier quoted context omitted.

I would have thought that the OpenAI bet is way more risky, because if someone comes along with a better model it could really hurt OpenAI. NVIDIA seems harder to dethrone imo.

In many ways OpenAI is transitioning towards an end-user facing product business. They have by far the strongest brand among consumers and are positioning themselves to take on Google/Meta in the ad business. By proxy, having the strongest frontier model becomes less and less necessary for them and instead building a strong product by properly layering medium-strong models in a cost-efficient way is the priority.

> They have by far the strongest brand

They don't really, because of Gemini and Grok.

If it was OpenAI vs Claude then yeah, ChatGPT is known whereas Claude you have to be an enthusiast to know.

But everyone using Google runs into Gemini and everyone using X runs into Grok, and people talk. Now even the laypeople know there is more than one AI, and they're from big brands that they trust. Which means that people will window shop for the AI with the best performance per cost. Bye bye brand power.

Re: SoftBank sells its entire stake in Nvidia

#85

Post by adastra22 »

chemmail wrote: post #74
l5870uoo9y wrote: post #28

Earlier quoted context omitted.

Isn't it merely a matter of time before China has an alternative?

All you have to look at is ASIC miners. Once they had them, they were 10x faster than GPUs easily and made GPUs useless for those algos. Something very similar can happen soon.

The fundamentals are different. Bitcoin mining is not intrinsically suited to acceleration on a GPU. It is a not-very-wide serial integer operation.

AI inference on the other hand is basically just very large floating point tensor matrix multiplication. What does an ASIC for matmul look like? A GPU.

Re: SoftBank sells its entire stake in Nvidia

#86

Post by Topfi »

tarsinge wrote: post #65
hobofan wrote: post #49

Earlier quoted context omitted.

In many ways OpenAI is transitioning towards an end-user facing product business. They have by far the strongest brand among consumers and are positioning themselves to take on Google/Meta in the ad business. By proxy, having the strongest frontier model becomes less and less necessary for them and instead building a strong product by properly layering medium-strong models in a cost-efficient way is the priority.

This argument regarding brand loyalty gets repeated but it’s really weak to me. The immense majority of people don’t tie their identity to the software services they are using. Without network effects or an ecosystem locking customers will switch as soon as there is a less expensive and/or better alternative, as the history of software has shown countless of times.

Keep in mind how severely the quality of Google search results or e.g. any consumer facing piece of Microsoft software (Windows, Office, OneDrive, etc.) have deteriorated to the point it has far transcended the more nerdy corners of the web, yet both continue to retain a strict grip, thanks to buy in/brand strength.

Re: SoftBank sells its entire stake in Nvidia

#87

Post by dawnerd »

lvl155 wrote: post #83
randomNumber7 wrote: post #40

Earlier quoted context omitted.

I would have thought that the OpenAI bet is way more risky, because if someone comes along with a better model it could really hurt OpenAI. NVIDIA seems harder to dethrone imo.

They probably know more than us. Such as alternative chips or that the Chinese will go in-house sooner than we think. Nvidia’s moat is not as permanent as people think.

Not to mention the US companies probably want to develop their own chips to get away from Nvidia too. I don’t really see why any company would want to base their entire business on the whims of nvidia.

Re: SoftBank sells its entire stake in Nvidia

#89

Post by fancyfredbot »

Fun thought experiment: If a company had a product with infinite value it would be irrational to allocate capital to shares since you could own the product instead. So the share price might even go down (it's hard to know what role money will play in a post-agi society).

A smaller scale version of this might be happening here. Or it could be a bubble. Either way it's interesting!

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