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Nvidia’s $589B DeepSeek rout

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Re: Nvidia’s $589B DeepSeek rout

#881

Post by matwood »

miohtama wrote: post #874
AnthonyMouse wrote: post #801

Earlier quoted context omitted.

It has been clear for a while that one of two things is true. 1) AI stuff isn't really worth trillions, in which case Nvidia is overvalued. 2) AI stuff is really worth trillions, in which case there will be no moat, because you can cross any moat for that amount of money, e.g. you could recreate CUDA from scratch for far less than a trillion dollars and in fact Nvidia didn't spend anywhere near that much to create it…

AMD is failing to recreate CUDA. Intel is dying. Who will step in as credible competition, and when? A trillion dollar question.

You don't need external competition to have NVDA correct. All it takes is for one or more of the big customers to say they don't need as many GPUs for any reason. It could be their in house efforts are 'good enough', or that the new models are more efficient and take less compute, or their shareholders are done letting them spend like drunken sailors. NVDAs stock was/is priced for perfection and any sort of market or margin contraction will cause the party to stop.

The danger for NVDA is their margins are so large right now, there is a ton of money chasing them not just from their typical competition like AMD, but from their own customers.

Re: Nvidia’s $589B DeepSeek rout

#882

Post by kristiandupont »

AnthonyMouse wrote: post #813
bo1024 wrote: post #807

Earlier quoted context omitted.

I think the analysis of (2) is too simplistic because it ignores network effects. A community of developers and users around a specific toolset (e.g. CUDA) is hard to just "buy". Imagine trying to build a better programming language than python -- you could do it for a trillion dollars, but good luck getting the world to use it. For a real example, see Meta and Threads, or any other Twitter competitor.

You have a trillion dollars in incentive. You can use it for more than just creating the software, you can offer incentives to use it or directly contribute patches to the tools people are already using so they support your system. Moreover, third parties already have a large motivation to use any viable replacement because they'd avoid the premium Nvidia charges for hardware.

You could apply this analysis to any of the other big tech innovations like operating systems, search, social media, ...

MS threw a lot of money after Windows Phone. I worked for a company that not only got access to great resources, but also plain money, just to port our app. We took the money and made the port. Needless to say, it still didn't work out for MS.

Re: Nvidia’s $589B DeepSeek rout

#883

Post by kristiandupont »

aurareturn wrote: post #867
camillomiller wrote: post #820

Earlier quoted context omitted.

This is partially why Apple is the one that stands to gain more, and it showed. Their "small models, on device" approach can only be perfected with something like DeepSeek, and they're not exposed to NVIDIA pricing, nor have to prove investors that their approach is still valid.

Until AGI removes the need for iOS. Apple is not immune to AI disruption. The Rabbit R1 was a scam but the concept was the right approach. It was just 5 years too early. You don’t need an iPhone with AGI. You just need a 5G device with a screen, connected to an AGI.

I don't disagree, but

>You don’t need an iPhone with AGI. You just need a 5G device with a screen, connected to an AGI.

..it seems that that is exactly what the iPhone 20 or whatever will be?

Re: Nvidia’s $589B DeepSeek rout

#884

Post by miohtama »

pjc50 wrote: post #875
miohtama wrote: post #874

Earlier quoted context omitted.

AMD is failing to recreate CUDA. Intel is dying. Who will step in as credible competition, and when? A trillion dollar question.

While we can bet on "AMD are too sclerotic to fix their drivers even if it's an existential threat to the company", I don't think we can bet on "if we deny technology to China they won't try to copy it anyway".

I agree.

Need to find this company and buy its stock when it is still early.

Re: Nvidia’s $589B DeepSeek rout

#885

Post by awongh »

AnthonyMouse wrote: post #801
sek wrote: post #781

Earlier quoted context omitted.

The crash is absolutely rational; the cascading effect highlights the missing moat for companies like OpenAI. Without a moat, no investor will provide these companies with the billions that fueled most of the demand. This demand was essential for NVIDIA to squeeze such companies with incredible profit margins. NVIDIA was overvalued before, and this correction is entirely justified. The larger impact of DeepSeek is mo…

It has been clear for a while that one of two things is true. 1) AI stuff isn't really worth trillions, in which case Nvidia is overvalued. 2) AI stuff is really worth trillions, in which case there will be no moat, because you can cross any moat for that amount of money, e.g. you could recreate CUDA from scratch for far less than a trillion dollars and in fact Nvidia didn't spend anywhere near that much to create it…

2) Seems the most plausible, but how to value the moat, or, how long / how many dollars will it cost to overcome the moat? The lead that CUDA currently has suggests that it's probably a lot of money, and it's not clear what the landscape will look like afterwards.

It seems likely that the technology / moat won't just melt away into nothing, it'll at least continue to be a major player 10 years from now. The question is if the market share will be 70%, 10% or 30% but still holding a lead over a market that becomes completely fractured....

Re: Nvidia’s $589B DeepSeek rout

#886

Post by DebtDeflation »

plaidfuji wrote: post #640

Here’s a take I haven’t seen yet: If training and inference just got 40x more efficient, but OpenAI and co. still have the same compute resources, once they’ve baked in all the DeepSeek improvements, we’re about to find out very quickly whether 40x the compute delivers 40x the performance / output quality, or if output quality has ceased to be compute-bound.

In the long run (which in the AI world is probably ~1 year) this is very good for Nvidia, very good for the hyperscalers, and very good for anyone building AI applications.

The only thing it's not good for is the idea that OpenAI and/or Anthropic will eventually become profitable companies with market caps that exceed Apple's by orders of magnitude. Oh no, anyway.

Re: Nvidia’s $589B DeepSeek rout

#887

Post by scarface_74 »

goatlover wrote: post #688
scarface_74 wrote: post #615

Earlier quoted context omitted.

ChatGPT has over $10 million paying subscriber. No I am not counting the people using the API programmatically

That doesn't make them profitable though. They spend billions.

I meant 10 million paying subscribers not 10 million dollars. I put the dollar sign there by mistake. That’s $2.4 billion in revenue and growing not counting API customers.

The question is whether ChatGPT (the product) and running thr API is profitable or at at least whether the trend is that cost are coming down.

Re: Nvidia’s $589B DeepSeek rout

#889

Post by suraci »

Rury wrote: post #612
flashman wrote: post #597

Earlier quoted context omitted.

I think it's entirely possible that one categorically can't think correctly about markets and equity valuations since they are vibes-based. Post hoc, sure, but not ahead of time.

Most people don't care about the fundamentals of equity valuations is the crux of it. If they can make money via derivatives, who cares about the underlying valuations? I mean just look at GME for one example, it's been mostly a squeeze driven play between speculators. And then you have the massive dispersion trade that's been happening on the SP500 over the last year+. And when most people invest in index funds, and…

the only correcr answer...

current market is a 100x GME

it's a game, deepseek is just an random event, which may or may not change the storyline

not a single big AI company gain any profit from AI, but it doesn't prevent lines going up

in fact, the price is only about how much companys spent but not about how much companys gained

current buyers are not buying the AI vision talked here, they're buying the price, and will sell the price

so if the lines keep going up, no bother, everyone are happy to let their money sit in hands of hedge funds or etfs

Re: Nvidia’s $589B DeepSeek rout

#890

Post by Urahandystar »

kristiandupont wrote: post #883
aurareturn wrote: post #867

Earlier quoted context omitted.

Until AGI removes the need for iOS. Apple is not immune to AI disruption. The Rabbit R1 was a scam but the concept was the right approach. It was just 5 years too early. You don’t need an iPhone with AGI. You just need a 5G device with a screen, connected to an AGI.

I don't disagree, but >You don’t need an iPhone with AGI. You just need a 5G device with a screen, connected to an AGI. ..it seems that that is exactly what the iPhone 20 or whatever will be?

Surely its just a watch.
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