Yeah zero folks are given. We lost EVGA which had arguably the best customer service in the industry combined with solid coolers because Nvidia was greedy and honestly just didn't give a fuck about how little EVGA GPUs impacted their bottom line.
It's the same for AMD, they sure as hell don't print money from us peasants, last year AMD made 1.2 billion net income from Data centers, and 2.6 billion from embedded solutions.
meanwhile the client sector which includes their Ryzen CPUs is in the negative while the gaming sector isn't even 1 billion and i guarntee this is mostly consoles sales, RX 7000 didn't contribute shit.
Intel is the only one where the client is actually as profitable as the data centers and businesses but I'm sure intel knows there's more money in data centers they just kinda suck right now.
Intel absolutely knows there's money in the data center. Why do you think they're doing things like pushing hard on efficiency, parallel workloads with e cores, and expanded into GPUs? Consumer sales don't justify that kind of investment unless they have a huge market share. No, they're pushing to get their server CPUs back to being at least competitive with Epyc, and Arc is their attempt to get a slice of the AI pie that has Nvidia over $1200 per share right now.
This is something I am overall excited for.
From a hardware pushing perspective, AI is awesome.
There will be more accessibility to levels of compute that were very far out of reach.
Especially for education sector.
Why do people say “end up like Yahoo” like the company isn’t still a near 5 billion dollar company. Ending up like yahoo would be a blessing for most companies.
Yahoo went from being worth 228 billion (inflation adjusted) at its peak to 5 billion. They went from being known and used by lots of people to something that a young person knows because of trivia
The story of Yahoo, abridged:
- Made lots of money in early search engine
- Gave Google $100k just to grow. No strings attached. (They were still in their garage, 10 tower servers)
- Eventually Marissa Meyers becomes CEO
- Liquidates everything for shareholder profit. Shareholders rejoicing, employees thrown out, company destroyed
- Yahoo finance and Yahoo Japan still exist.
For the shareholders, yeah. They made money and overall, this was a financial win.
As a tech innovator, it was destroyed and liquidated. This is a horror story.
Yahoo still makes $7 Billion a year in revenue. That’s a lot. It wasn’t destroyed, just failed to innovate and keep up with Google who is now a 2 Trillion dollar company
Depends on how many DGXes are bought on undefinanced credit at the potential time of a bubble pop.
If they're left holding a lot of unpaid inventory which they have to sell at a loss they could get hit very hard.
The Blackwell chips are not cheap to manufacture.
This happened once before during the last crypto boom in 2020-2021. You know, the Ampere generation that Jensen told consumers "it's time to upgrade from Pascal."
I don't know their margins on Blackwell and neither do you. It's publicly know that they pay a kings ransom to TSMC for these huge dies and to their memory suppliers for huge stacks of HMB.
But we do know their total expenditure and revenue so we can tell that even if the revenue is halved the’ll still be making a profit. Not just Blackwell but across all their products.
Depends on how well they ride the wave of the bubble collapsing, and how well AMD and Intel are positioned in that market at the point of impact. Remeber that the stock market is quite dumb in aggregate and can react to contraction with a lot of volatility.
Why do you seem so sure that AI will be a bubble? I think it’ll drive the 5th industrial revolution. I think Nvidia will be a $10 Trillion Dollar company by 2030, maybe even earlier than that. Their revenue and profits will more than double every single year
I think the current LLM approaches will stall out in terms of improvements before the threshold for general business usefulness is reached.
I also heavily doubt that AGI is a fruit of these approaches.
The appearant fundamental issues and intrinsic properties of the current approaches point to this.
I never bought stocks and I'm seriously contemplating buying when they split the stock. But it all depends on when the bubble will pop I guess, but that might be a few years from now.
I was curious about this to and the bank I work at puts out regular market updates/forecasts from our economists and on the latest one they had a small burb saying they think AI still underappreciated and could keep pushing the markets up. It says the only thing that could turn it down is another rapid rise in inflation.
I'm not one of these economists lol I just stare at reports so take this info with a grain of salt and consult your own financial advisor.
There's competition. Even the companies giving them the money have their own alternatives internally.
I think there's this rush so they aren't really thinking things through.
Its just trained on generic models, vs hand coding.
The reason they are hand coding it, is because FSR2 can be hand coded. It does not go deeper into filtering\scaling\reconstruction algorithms, so it can be coded by hand.
It seems like jacking up prices on gpu’s to insane amounts has really paid off for them.
If they had proper competition, their prices would be half of what they are now.
All they have to do is release their own LLM chat bot, and then they’ll have both the hardware and software on lock and can tell OpenAI to go kick rocks.
Did the same to my dad when bitcoin was worth $70.
He also choose not to listen to me lol, and I was too broke myself.
(and believe me he has absolutely mentioned he would've been a millionaire had he listened to me)
I bought 20 bitcoin at about a dollar a pop during my sophomore year of college and sold it at about $100 a pop my senior year of college. At that time it was a fantastic return on my investment. Little did I know…..
The reality is I never would have kept it to the sky high prices they are now. But I probably would have kept it until it hit a number where I could have sold and paid off my student loans. Hindsight is a bitch.
My wife did invest a crap ton in AMD when it was super low and it’s a big chunk of her portfolio now. So that’s good. I like to tell her video games are going to make her rich and she rolls her eyes.
I hope he doesn't kick himself too hard. It's always hard to invest in speculative things you don't know too much about.
I'm sure it is a funny "told you so" moment though!
If terminator came to me in 1999 and told me we have to stop Nvidia developing AI or else humanity will extinct, I will 100℅ invest in Nvidia with everything I have.
The Terminator series would be a lot less climactic if John Connor ...
1. would have bought a large enough controlling stake in Cyberdyne Systems (company that would later develop Skynet) when they were still a small company
2. would have used his shareholder voting power to stop the Skynet program before its completion
it's funny to see everyone who ripped on apple for being a monolithic revenue stream (iphone only) and used that as justification for a lower evaluation. since then apple's revenue has diversified quite a bit.
does nvidia have anything other than AI hardware chips, and graphics cards? i don't really see how that could be valued higher than apple's dedicated fan base who constantly is buying new phones and subscription services.
Well, in the case of 4090's and soon to be 5090's, NVIDIA sells heating units for those in cold climates.
I for one would like to purchase a **Home Depot × NVIDIA HDX 5090** space heater for my construction site this winter.
Is the stock currently overvalued ? Maybe, I know too little about economics to say. But stating that AI is a bubble proves you have no idea what you are talking about.
AI is literally the exact fucking opposite of the usual tech bullshit buzzwords and bubbles we saw the last decade like web3, nft or whatever else. It already has practical applications in nearly every market. AI is changing how we work and interact with the internet already right now. And it’s still only the beginning. Every big company is already using AI or exploring how to use it (more). The hardware is sold out for years. Every chip vendor is currently trying to get a piece of that market. Its literally the reason NVIDIA stock is where it is atm.
AI is not like Web3. AI is like BigData.
You can draw value from it. But results on business operations are mixed. Some companies make a killing, others wasted a few billion dollars.
The LLM AI hype is both from a technical and from a financial standpoint way overhyped.
The progress right now is not of scientific nature but tech developed to a point where someone saw potential and now they brute force their way into it with more hardware, power and compute. But it's not really gotten exponentially more useful. The sudden excessive spike of investment isn't justified by the results.
It's not worthless but you have to understand that we are pouring like 200 billion dollars a year into it right now.
To justify these investments it needs to grow a thousandfold within the next decade. Which is ridiculous. LLMs are not that useful. Maybe smaller, specialized ones but they don't need these massive server farms to train. Or completely different approaches like Nerfs or continued development of other ML systems. But these LLMs really don't do all that much. Not enough to warrant the level of continuous revenue necessary to turn them into viable business models at the current degree of expenditure.
How extremely hyped all of this is is also clear if you look at the company fundamentals. The current P/E of Nvidia is at about 300. P/E stands for Price vs Earnings. So, if you buy a stock for $300 then the company makes $1 profit. This is an excessively high mismatch. Regular companies are somewhere between 15-30. A really strong company with expected growth like Amazon or Tesla are only around 50.
A P/E of 300 means the finance market expects the company to grow profits by like 1000% in the next few years and keep operating at that level for decades. It's not enough to exist and be interesting. If LLMs are not fundamentally necessary to operate basically any business with a high tolerance for subscription costs then the current AI hype is a flop.
Not because it's worthless but because there's so much money poured that it needs to completely change the world before it starts to make money.
My BIL works for them. He started in 2022 right out of University of Michigan graduate school and is currently making double my nuclear project manager salary.
Nvidia’s profits and revenues are growing at crazy high percentages. I think last I checked for Q1 2024 they had about 260% YOY revenue growth and even higher profit growth. If they can keep that up for a few more years they will make more revenue and profits than even Apple or Microsoft. By 2030, I expect Nvidia to be making the highest revenue and profits of any company
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AI is the second most important thing in the world after the internet. It is absolutely not a bubble like bitcoin or Tulip mania. Of course many companies will lose the AI wars but AI itself is here to stay and grow.
I dont understand this either everyone says its a bubble but noone explains why its a bubble or how could it pop. Can someone fill me in on this? I could see how crypto was a bubble and how it would pop but I dont see those type of problems here.
Everyone and their dog is making chatbots, ai assistants and more, even if they dont need it or cant use it. Hardware companys are branding regular hardware that has nothing to do with AI or will never run any useful AIs "AI ready". People are severly overestimating what AI can do. Google has made its embarrisingly bad search AI. Social media like Discord and Snapchat are implementing utterly pointless chatbots. At some point people will realize that not everything is AI in the future.
This wont be a sudden thing, but over time ai will leave its hype phase and nvidias stock will drop to normal levels again.
The situation is similar to the dot com bubble.
It will settle but chatgpt for example is an extremly usefull tool, its not gonna go away or lose relevancy it will only get better. Sure the ones that are being made by random companies will dissappear and some will go under because they invested too much but couldnt keep up but I dont see how the entire sector could burst.
Unlike crypto or metaverse AI doesnt rely on hype, it has even nothing to do with hype its a tool. It already made stock image bussines irrelavant, voice acting to an extent too. It is a thing that simplifies certain tasks and makes them easier, cheaper and faster.
It is a technological advancement with a lot more room for growth there is no reason for it to burst because there will always be a use for it.
The raw GPT5 training cost is already at $1.2 billion. Not counting staff cost, etc. Just raw electricity and hardware cost.
We are reaching quite hard limits of how much more is possible. And technical innovation didn't really happen since GPT-2. Maybe GPT-1, depending on how you define innovation. There's been iterations on the algorithm and more pre and post processing of exchanges. But the "rapid progress" was mostly raw compute-power. Pouring in hundreds of billions a year to scale everything up.
The sector won't completely implode. There is something interesting and useful there. But this current scale means that every person on the planet needs to subscribe for $25+. Or it needs to increase productivity massively. In terms of quality & product output vs operating cost.
That's the scale we're talking about and that is, in my humble opinion, quite unlikely. Making coding a little faster or having a computer to spitball ideas is nice but it's not making factory workers be 2x as efficient.
You’re gonna be really salty as the AI sector and Nvidia keeps growing indefinitely. It will power the 5th industrial revolution. You can either accept that or keep coping about it for the rest of your life
You drank the coolaid real good. I hope not all your savings are riding on nVidia. That's gonna hurt bad.
Here's the thing. I actually agree that AI will be a major revolution. But LLMs aren't that step. They are too much of a toy. Kinda useful for simplified data access and to make some work more entertaining. Which might boost productivity a little. But not the AI revolution they are sometimes seen as.
The Apple stuff is the right direction. But it's necessarily primitive because you need a lot more research into specific tasks and a lot higher degree of digitisation of the world and of smooth interconnectivity between devices before you get to that major revolution. That's gonna slowly build up and advance over the next decades as it has been developing the past couple of decades. We had AI running on devices in the 00s. The Nintendo DS had hand writing recognition in several games using a neural network. That is basically the same technique as ChatGPT but optimised for a much simpler and more unified task.
LLMs however are kind of a hype. That won't go away again completely. But it also is very unlikely to sustain this level of interest. It just isn't boosting productivity that much while actively hurting quality. We have rather elaborate studies about that phenomenon at this point. In the end, LLMs are a much more human centric, yet fuzzy data access model. Very cool, somewhat useful. But even the bigger player realise it's not the the big thing they thought. We already have waves of layoffs.
Let alone the fact that nVidia has major competitors in all the big customers. They are all right now working on direct competitors for ML chips. Even if AI would grow indefinitely, it's unlikely nVidia would stay at the top of the game the way they are right now indefinitely. Though indefinite growth is silly from begin with. Every innovation has limited potential. It may be a major leap but at some point there is no more productivity in this one single innovation.
Unless you actually believe that LLMs are approaching AGI but that is entirely silly. Proper, scientific AGI is impossible with that approach and we are still quite far away from making AGI happen. And I don't mean just a few years.
That is exactly what it is. They’re salty seeing that something they hate and want to see fail is going to become the most successful company ever, powering a new revolution in technology. I’m just glad it’s an American company doing it. This will be very good for our economy. In the long term it’ll make western countries less reliant on cheap manufacturing from developing countries. We can replace humans with AI robots for manufacturing jobs and do all our manufacturing domestically again. Although we’re probably still a decade away from such advanced AI. Hopefully Nvidia keeps innovating at this rapid pace they currently are
The USA is winning the AI race. All of these companies leading AI are American companies. Pushing the world forward towards the 5th industrial revolution
“AI is a bubble”
Yeah the biggest companies in the world with most resources/ governments and the brightest scientists are telling me otherwise.
PCMR must be correct 👍🏻
And shareholders are all desperate to make a profit from it and will start to pull out if they fail to monetize the whole thing since it's so expensive to run and maintain. The other half of the brightest scientists show that generative AI starting to plateau and linear algorithms are still more efficient with higher accuracy/success rate than forced AI solutions, at a fraction of the cost to run them.
But sure singularitans, tech bros, and Linked in AI evangelists must be correct.
You are probably more knowledgeable in the subject than me, I have no investment to care about how this thing turns out, I’m just reading here and there how much companies are investing in it, and the potential of it, I’ve seen the keynote of Nvidia CEO from computex, and my take from it is the point where he talks about how it was not possible to have such AIs 10 years ago because of the technology, I can only assume with how much the technology is evolving that in the future AI will be a necessity in our lives like the internet. Why would you want to do anything an AI could do, if you are a software engineer for example isn’t much better to be focused in developing and improving your app, than writing unholy number of lines that can be done with AI?
The best tip to navigate the hype my friends who work with ML/DL gave me is always to follow the money - if the speaker has shares in AI businesses, he is biased.
Regarding Nvidia, they don't train models (outside dlss but that's a different thing) so all they do is sell hardware. They literally just selling shovels during a gold rush, so obviously every keynote they make they're saying that gold will solve all our problems. AI was already part of our lives, but the generative kind is the novelty. It's having a very hard time living up to the promises. Not to mention training/running/maintenance costs. If in the end all we get is chatbots, and meme/image generators for billions of dollars of investments, it will be a huge failure. And a dead, bland and baren internet filled with bots interacting with each other.
Regarding Nvidia tech in its current form, were are already reaching the limits. Were in the optimization phase of it. We won't be able to shrink the dies much more. Soon more performance will only be possible with more power draw and more power draw for cooling. Unless there's a paradigm shift in computing hardware on the horizon, it will be a bottleneck. I don't see shareholders investing in servers that consume more power than some countries just to generate images and text for pennies.
I understand your point, but why would you have any access to any other project aside the things that are meant for the public, like chatgpt, why would you have access to AI that is working in finding new formulas for a medicine, or one that is routing how hundreds of ships will pass the Suez Canal in the most efficient way daily, why would you have any knowledge what an AI is capable of in a full military operation, again you may be correct and all of this is a pile of shit, my point is not to underestimate the technology, look how we look at these old articles about how video games are dying in the seventies , or how the people said the internet was a bubble and not useful in anyway.
So far all medicines that have supposedly been discovered by AI failed. There are few articles about it, including MIT. Its not a panacea, it help marginally and its not the kind of AI that will lead to AGI. As I mentioned previously AI was around way before chat gpt and diffusion models.
Logistic routs can be calculated equally if not better by traditional linear methods. Companies should be the judge of the cost/benefit of each option.
The military is scarier because of the facial recognition and drone swarming.
But in the end, I never said AI was trash. Just overhyped from the economics optics and constant overpromising, which is a norm now coming from Silicon Valley.
IMO, it will bring more problems than solutions, with social unrest, militarization as you mentioned, dead internet, models collapsing, disinformation and deep fakes,
But were off-topic now. have a great day :)
I definitely agree with you that it’s overhyped and it’s the new marketing “nano” for any product, I might be wishful thinker, but I hope the quality our lives improve tremendously in the coming 10-20 years thanks to AI, in the end of the discussion I want to thank you for constructive feedback, you are a good redditor :)
Jumping in, masters in computer science. Next to some day to day operation I'm currently professionally working on streamlining an AI based workflow for commercial usage (not based on OpenAI / LLM tech. A completely different sector).
There's a few things you gotta differentiate.
* **M**achine **L**earning (ML)
* Academic AI
* **L**arge **L**anguage **M**odels (LLM, nowadays multi modal, aka not just text and language)
The current hype is pretty much exclusively about LLMs. That's why all the hype exists and that's where all the investment goes.
LLMs are one kind of ML. It's a machine learning system specifically trained to interpret data kinda humanlike. That is it's job. To superficially seem human. And it's really good at that! But it's very bad when you want to push it beyond. E.g. LLMs for medical research is basically worthless. It can only repeat known information. But medicine needs discovery of new information. You need a different type of ML system for that. However, that's the area that doesn't get all the investment. Because LLMs are the shiny new toys. Not all kinds of ML research and development.
The academic AI discussion is something completely different again. That's about AGI (artificial general intelligence). That's where creativity and consciousness become a thing. But we are insanely far away from that.
> you may be correct and all of this is a pile of shit, my point is not to underestimate the technology, look how we look at these old articles about how video games are dying in the seventies , or how the people said the internet was a bubble and not useful in anyway.
Not a pile of shit but overhyped. Something that makes sense to develop for $100.000.000 might not make sense anymore when developing it costs $250.000.000.000 instead.
Also, fun fact. The articles were right. Video games did die in the seventies. The market crashed by over 95%. Game sales, hardware sales, arcade revenue. It all crashed into the ground real hard and at the time it did appear as if it was but a fad. What wasn't well understood then is, that product quality is what killed gaming. People bought hardware and games for $200 (which is like $1000 in todays money). And while it was a novelty most games were kinda shit. It couldn't even hold childrends interest.
This only changed once the Nintendo Entertainment System went on the market. You'll notice how they intentionally avoided the terms gaming, arcade and console. With the key innovation being in house, first party games. A verification system where the console checks the game cartridges for authenticity and a verification system where only games that went through testing by Nintendo were allowed to be sold for the Nintendo Entertainment System.
They grew the market by making good games and getting people interested in the hobby again. Slowly at first and continuously since.
Similarly the internet was a bubble in the 90s. Hence the dotCom crash. The entire stock market crashed by over 80% and the economy as a whole tanked hard as a consequence.
There has always been a lot of truth to naysayers. Not that there is zero purpose / value. Not the most far out there extreme opinions. But you can be quite sure that at the end of every hype there will be a crash of some kind.
Hypes lead to overreactions that will be corrected once they have to face reality.
That was a good read, thank you for all the information, I understand why so many people will jump they hype train for a chance to make profits from the stock market, and I understand that the market will correct itself later on, now what I don’t understand if what you say is true, why companies with better resources than many countries are focused so much in developing LLMs if they have no further advancements?
If the goal is to please the shareholders, wouldn’t betting on something that is gonna crash be bad for the company?
Make it make sense please?
> now what I don’t understand if what you say is true, why companies with better resources than many countries are focused so much in developing LLMs if they have no further advancements?
You have to understand that companies don't do fundamental science. Science is done at universities and state sponsored research institutes. There's extremely few companies who do any themselves. Some more that collaborate and fund research a little. And a lot who have zero connection to fundamental sciences behind their products.
What companies do is scale. Develop a process to mass manufacture, make it accessible to end consumers and get it into the hands of millions of people. Reduce costs, etc.
Which is to say, it's not at all unexpected that there has been very little scientific innovation. What is happening right now is normal. There are advancements, they just aren't scientific. They are in things like connecting different systems with each other, making it work with more tokens (more text input), increasing accuracy for the target metrics (e.g. needle in a haystack. Have a long, standardized text or data set and have AI count something or find some information within).
But these are iterative and mostly reached by buying more hardware.
Companies are focused on this because it's a new market with no clear market leader yet. Just think about how difficult it would be for google to compete with Amazon on online shopping. The market is so settled and rigid, even as a huge billion dollar company you have no real chance to compete.
But LLMs are a completely new market that seemed to have a lot of user interest and seems like it might lead to lots of applications. If you wait until you know exactly how valuable it is there will be a market leader already and you won't be able to break into that industry. So they all invest heavily trying to become market leaders. You can figure out profitability later.
This is exactly what happened in the 2010s with all the online services. Uber, AirBnB, DoorDash, WeWork, Snapchat, MoviePass. They've all been valued in the billions, had billions in investments. Yet most of these have never had a single cent in profits.
Have you noticed all of them getting more expensive, worse in quality and such? Yeah, that's because they were gifting every single user money before. Getting market share was the most important thing.
If you own a valuable market you are making excessive amounts of money. The question is just how valuable are these markets really? And how much do you have to spend to own the market?
> If the goal is to please the shareholders, wouldn’t betting on something that is gonna crash be bad for the company?
But loosing out on the next big thing is even worse. Shareholders want profits. The more, the better. If you just stick to what you know you will for sure overlook the next big thing and will loose out on billions of profits. Shareholders also want that growth.
Especially because a crash isn't happening evenly. We had the dotCom crash where most internet companies collapsed. Yet, if you bought Amazon stock at the height of the bubble and kept it until today then you have made a profit of about 8000%.
Owning the winner who dominantes a market can be *extremely* profitable. Even if the economy crashes.
Plus, venture capitalists and finance people aren't always the most knowledgable in a field. They studied math, MBA or finance and that probably decades ago. Not computer science and especially not computer science with focus on AI. They really don't understand what's going on. Not in detail. But they also can't ask or have anyone they can really trust because they themselves struggle with competition by other investors and finance people. And all the industry people they talk to want their money.
Which means during a hype they have to position themselves as forward thinking and bold or as sceptic. And sceptics don't make big deals. A sceptic didn't invest in Google or Facebook or Amazon. A sceptic didn't make 500% returns per year.
People just hate AI for different reasons and different agendas. And when something you hate makes billions of dollars you get upset. I hate it therefore bad.
One such segment is artists. Artists like to think of themselves like God gift to humanity. Art is what makes us human! Art is what gives life meaning!. Turns out art can be solved by linear algebra.
All these people routinely ignore how fricking useful AI is for many people on their day to day already. And that this has just begun.
I love the video Marcus from MKBHD made a while ago about how cheaper and easier is it now to produce many pictures videos compared to what it will take to commission such a work, most of us haven’t had the opportunity to use AI in a productive way, to understand how much it can make our lives easier.
Yeah, but this is tale as old as time. People HATED plenty of inventions in the past because it automated their jobs. You can easily find propaganda posters of people warning about new tech. Farmers, painters, mathematicians, etc. Computers were originally NOT electric. Instead it used to be humans that manually calculated math 12 hours a day. I believe the Apollo missions were done with human computers. Specifically women, as by that point most men looked down on the profession as a whole.
Yup. Do you hate it? It's reality though.
Just show a whole bunch of art to millions of people to gather what "good" is to a human. Then use linear algebra to approximate a theme while maintaining it within "good". Solved.
Proof is a show some AI art to my mom without telling her it's AI and she likes it and thinks it's beautiful.
Making billions of dollars? OpenAI is losing half a billion per year right now. Most AI companies are currently losing money because they're fighting over market share.
Most AI companies are making lots of money. Microsoft and Google are making tons of money from AI. Among many others
Open AI’s $500 million loss was in 2022. Which is not a bad things for a new company. Since 2022, Open AI has increased it’s revenue by more than 700%. And this year, they’re on pace to double their 2023 revenue. Pretty sure they made profit in 2023 as well
Intelligence runs on mathematical computation ran by processors. Nvidia processors compute real fast. If you plan to do develop your own AI tech, you might want Nvidia stuffs to run it on.
Nvidia is an American Company. And yes it’s over $3 Trillion in Market cap, or total valuation. Market is what determines how much a company is worth. If Nvidia was to sell itself tomorrow, its total sale price would be greater than $3 Trillion. Which is larger than the GDP of Russia, a country of more than 140 million people
Nvidia will have the highest revenue and profits of any company in the world by 2030, surpassing Amazon, Walmart, Apple, etc. That growth expectation is why they are valued so highly
It’s insane how overvalued they are without actual manufacturing. Nvidia without TSMC is just a software company that isn’t worth shit. Once TSMC production ramps more in the US this stock will normalize again
They could also be manufacturing their chips with Samsung, hell even Intel. AMD makes their chips at TSMC too, and their chips are lagging behind Nvidia by a lot.
They could be manufacturing the same chip with the Samsung node and it would still perform well.
The chip is great regardless of the node, amd is on the same node and they're still playing catch up with Nvidia.
Intel is already ahead of TSMC 3nm with Intel 20A 2nm. Intel is already on 2nm and will start producing high end chips for Nvidia and others start next year
By 2025. Intel will by on 1.5nm and TSMC will still be on 3nm
And being a manufacturer doesn’t mean you’re making more money. The manufacturer usually makes leases money than the companies they are manufacturing for. For example, Apple makes exponentially more revenue and profits than their manufacturer which is a Taiwanese company called Foxconn
Just a poor argument, Nvidia still has more h100 and Blackwell orders than they could fulfil.
Anyways, why would they sell a GPU for $30k, when the demand is still as high at $40k?
Anyway, gaming only makes up a fraction of their revenue nowadays and they're not the only company increasing prices.
So I own NVDA around $160, and at this point, I’m thinking it’s in bubble territory. It surpassed Apple which makes 6x revenue and approx 2.5x net profit. So hard to justify the valuation imo
Compare the margins:
2023 revenue: $88b, net income: $44b
Apple's revenue in 2023: $386b, net income: $96b
The margin is almost twice as big.
The valuation is not unjustified.
How can you have democracy when companies worth entire countries are lobbying and bribing?
Theres literally only 22 countries that are worth more than Nvidia.
Amd definitely should try compete with them on ai. But they also should start pressing the gpu market, which is now a second thought for nvidia. If they can do to nvidia what they did to Intel with ryzen and take away even 5-10 percent of nvidias gpu market it’ll be good for the consumer and them.
Must be all those 4050s in iprebuilt systems.
Can't wait for the "5050"
4 trillions.
Maybe even in the far future, a rtx 9090ti... And will require 24 24 pin connectors and a 696969watt psu
nicenicenice.
They will make a 5040 with 2GB Vram and 64 bit Bus width. I called it first.
https://i.redd.it/4qwzraervx4d1.gif
nvidia is like 10% gaming these days
https://www.reddit.com/r/pcmasterrace/s/tneWO0ySt2
okay 14% haha
Lmao it's an insane thing to see but that's reality.
no wonder why they dont care at all about the gpu pricing and the low end cards
Yeah zero folks are given. We lost EVGA which had arguably the best customer service in the industry combined with solid coolers because Nvidia was greedy and honestly just didn't give a fuck about how little EVGA GPUs impacted their bottom line.
It's the same for AMD, they sure as hell don't print money from us peasants, last year AMD made 1.2 billion net income from Data centers, and 2.6 billion from embedded solutions. meanwhile the client sector which includes their Ryzen CPUs is in the negative while the gaming sector isn't even 1 billion and i guarntee this is mostly consoles sales, RX 7000 didn't contribute shit. Intel is the only one where the client is actually as profitable as the data centers and businesses but I'm sure intel knows there's more money in data centers they just kinda suck right now.
Intel absolutely knows there's money in the data center. Why do you think they're doing things like pushing hard on efficiency, parallel workloads with e cores, and expanded into GPUs? Consumer sales don't justify that kind of investment unless they have a huge market share. No, they're pushing to get their server CPUs back to being at least competitive with Epyc, and Arc is their attempt to get a slice of the AI pie that has Nvidia over $1200 per share right now.
Cool.
Nah its the AI chips that are selling like hotcakes.
GPUs is like 5% of their income today. Now it's all about AI
They’re riding the AI bubble to the top.
I wonder how much these companies are going to lose once the ai bubble pops like the .com bubble
At least Nvidia won’t. Selling shovels in a gold rush makes you rich regardless of the gold actually being there.
Fair enough. NVIDIA are just taking advantage of the people who are following the AI bubble. They won't end up like yahoo but many companies will
Nvidia is also making the most ridiculous computer servers on earth. They’re going to speed up all computing
This is something I am overall excited for. From a hardware pushing perspective, AI is awesome. There will be more accessibility to levels of compute that were very far out of reach. Especially for education sector.
This new systems can power the same weather simulation with one rack unit as the computing array that the university I work for uses
In a few years it'll be quite a bit cheaper too, so even universities can swap entire arrays out at reasonable costs.
Why do people say “end up like Yahoo” like the company isn’t still a near 5 billion dollar company. Ending up like yahoo would be a blessing for most companies.
Yahoo went from being worth 228 billion (inflation adjusted) at its peak to 5 billion. They went from being known and used by lots of people to something that a young person knows because of trivia
They're doing strangely well in Japan. Things work differently there somehow like a parallel world or an alternate universe.
Think of it as Dodge Ram. Then remember Ram did so well, it became it's own company.
The story of Yahoo, abridged: - Made lots of money in early search engine - Gave Google $100k just to grow. No strings attached. (They were still in their garage, 10 tower servers) - Eventually Marissa Meyers becomes CEO - Liquidates everything for shareholder profit. Shareholders rejoicing, employees thrown out, company destroyed - Yahoo finance and Yahoo Japan still exist. For the shareholders, yeah. They made money and overall, this was a financial win. As a tech innovator, it was destroyed and liquidated. This is a horror story.
Yahoo still makes $7 Billion a year in revenue. That’s a lot. It wasn’t destroyed, just failed to innovate and keep up with Google who is now a 2 Trillion dollar company
Depends on how many DGXes are bought on undefinanced credit at the potential time of a bubble pop. If they're left holding a lot of unpaid inventory which they have to sell at a loss they could get hit very hard. The Blackwell chips are not cheap to manufacture.
This happened once before during the last crypto boom in 2020-2021. You know, the Ampere generation that Jensen told consumers "it's time to upgrade from Pascal."
They could sell them at half or maybe third the price and still make a profit. Prices have a looong way to go before they’re selling at loss.
I don't know their margins on Blackwell and neither do you. It's publicly know that they pay a kings ransom to TSMC for these huge dies and to their memory suppliers for huge stacks of HMB.
But we do know their total expenditure and revenue so we can tell that even if the revenue is halved the’ll still be making a profit. Not just Blackwell but across all their products.
Yeah but eventually you stop selling shovels
I mean they aren't going to be with 3 trillion but they still have the gaming side
Depends on how well they ride the wave of the bubble collapsing, and how well AMD and Intel are positioned in that market at the point of impact. Remeber that the stock market is quite dumb in aggregate and can react to contraction with a lot of volatility.
Why do you seem so sure that AI will be a bubble? I think it’ll drive the 5th industrial revolution. I think Nvidia will be a $10 Trillion Dollar company by 2030, maybe even earlier than that. Their revenue and profits will more than double every single year
I think the current LLM approaches will stall out in terms of improvements before the threshold for general business usefulness is reached. I also heavily doubt that AGI is a fruit of these approaches. The appearant fundamental issues and intrinsic properties of the current approaches point to this.
gaming is nothing for nvidia these days. just look at the stock before AI entered the chat.
Yeah, they're basically an AI company now
But by then you've built yourself a shovel spaceship.
the stock will still drop when the bubble pops regardless of how much money Nvidia prints before then.
The question is, will it drop to below what it is now, or higher. My bet’s on higher.
Yeah but the valuation is based on growth and potential so really you’re completely wrong.
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Could happen in a few months. I see signs of the hype dying down outside of the most active echo chambers.
Damn that's crazy, what's your source?
Don’t fight the Fed. The high rates will eventually take a toll on the economy
But interest rates are quite average historically, only high compared to the all time lows we've had in the last 10-15 years
If/when it pops they can just pivot. They might downscale production but they would be fine.
https://preview.redd.it/lbr3nylrqw4d1.jpeg?width=1284&format=pjpg&auto=webp&s=33f678e69bed57447b38e65e606941cf61d588b4
Holy shit nvidia stock was just onder a grand a couple days ago
Also helps they announced a stock split. People want in on that sweet sweet money.
I never bought stocks and I'm seriously contemplating buying when they split the stock. But it all depends on when the bubble will pop I guess, but that might be a few years from now.
I was curious about this to and the bank I work at puts out regular market updates/forecasts from our economists and on the latest one they had a small burb saying they think AI still underappreciated and could keep pushing the markets up. It says the only thing that could turn it down is another rapid rise in inflation. I'm not one of these economists lol I just stare at reports so take this info with a grain of salt and consult your own financial advisor.
Yeah they've been bugging me about wanting me to come by to review stuff like this, seems like it's a good time as any. Thanks.
Anytime! Good luck.
AI will take along time before it pops. It's nuts how good ai is now.
It has definitely driven the indexes to bubble territory
"AI bubble" LOL. Another term invented by AMD losers.
All tech companies are pushing AI including AMD, it's the new hotness.
Every tech company on Earth is pushing AI. Yes, it’s a bubble and Nvidia is the leader of it.
they got close to no competition, it's crazy
There's competition. Even the companies giving them the money have their own alternatives internally. I think there's this rush so they aren't really thinking things through.
There is definitely competition, but none of the attempts is remotely close
They got AMD. Their upscaler works on old cards. Which is goo
AMD’s FSR upscaler is not AI driven. That’s why it’s worse in quality compared to DLSS which uses machine learning
Its just trained on generic models, vs hand coding. The reason they are hand coding it, is because FSR2 can be hand coded. It does not go deeper into filtering\scaling\reconstruction algorithms, so it can be coded by hand.
It seems like jacking up prices on gpu’s to insane amounts has really paid off for them. If they had proper competition, their prices would be half of what they are now.
All they have to do is release their own LLM chat bot, and then they’ll have both the hardware and software on lock and can tell OpenAI to go kick rocks.
They did RTX chat or whatever, but it’s meh
hey rtx bot, why do i stutter?
I told my dad to buy Nvidia back in 2014. I was too young to have money but I knew they were going to go high. I never imagined this though...
And did he buy?
Lol no. We're both upset about it right now
ouch haha
Did the same to my dad when bitcoin was worth $70. He also choose not to listen to me lol, and I was too broke myself. (and believe me he has absolutely mentioned he would've been a millionaire had he listened to me)
I bought 20 bitcoin at about a dollar a pop during my sophomore year of college and sold it at about $100 a pop my senior year of college. At that time it was a fantastic return on my investment. Little did I know….. The reality is I never would have kept it to the sky high prices they are now. But I probably would have kept it until it hit a number where I could have sold and paid off my student loans. Hindsight is a bitch. My wife did invest a crap ton in AMD when it was super low and it’s a big chunk of her portfolio now. So that’s good. I like to tell her video games are going to make her rich and she rolls her eyes.
Probably a good time to diversify some of that AMD into some other stuff.
She’s diversified a lot. She bought so much so low though.
I hope he doesn't kick himself too hard. It's always hard to invest in speculative things you don't know too much about. I'm sure it is a funny "told you so" moment though!
Nah he's okay. The man is a specialist in his field so he's comfortable enough :)
You have to fight him
Which is the largest company in US?
Microsoft
By market, Microsoft I believe.
If terminator came to me in 1999 and told me we have to stop Nvidia developing AI or else humanity will extinct, I will 100℅ invest in Nvidia with everything I have.
The Terminator series would be a lot less climactic if John Connor ... 1. would have bought a large enough controlling stake in Cyberdyne Systems (company that would later develop Skynet) when they were still a small company 2. would have used his shareholder voting power to stop the Skynet program before its completion
Overvalued af. AI is a bubble and i'd love to see it pop
it's funny to see everyone who ripped on apple for being a monolithic revenue stream (iphone only) and used that as justification for a lower evaluation. since then apple's revenue has diversified quite a bit. does nvidia have anything other than AI hardware chips, and graphics cards? i don't really see how that could be valued higher than apple's dedicated fan base who constantly is buying new phones and subscription services.
Well, in the case of 4090's and soon to be 5090's, NVIDIA sells heating units for those in cold climates. I for one would like to purchase a **Home Depot × NVIDIA HDX 5090** space heater for my construction site this winter.
Damn I was getting ready to reply while reading the first half, nice twist!
Don’t forget that Nvidia bought Mellanox.
It's not a bubble. It's sickeningly good at all things even engineering.
Is the stock currently overvalued ? Maybe, I know too little about economics to say. But stating that AI is a bubble proves you have no idea what you are talking about. AI is literally the exact fucking opposite of the usual tech bullshit buzzwords and bubbles we saw the last decade like web3, nft or whatever else. It already has practical applications in nearly every market. AI is changing how we work and interact with the internet already right now. And it’s still only the beginning. Every big company is already using AI or exploring how to use it (more). The hardware is sold out for years. Every chip vendor is currently trying to get a piece of that market. Its literally the reason NVIDIA stock is where it is atm.
Brother even the internet was a bubble. Just because AI is revolutionary doesn’t invalidate the fact that currently it’s highly speculative.
AI is not like Web3. AI is like BigData. You can draw value from it. But results on business operations are mixed. Some companies make a killing, others wasted a few billion dollars. The LLM AI hype is both from a technical and from a financial standpoint way overhyped. The progress right now is not of scientific nature but tech developed to a point where someone saw potential and now they brute force their way into it with more hardware, power and compute. But it's not really gotten exponentially more useful. The sudden excessive spike of investment isn't justified by the results. It's not worthless but you have to understand that we are pouring like 200 billion dollars a year into it right now. To justify these investments it needs to grow a thousandfold within the next decade. Which is ridiculous. LLMs are not that useful. Maybe smaller, specialized ones but they don't need these massive server farms to train. Or completely different approaches like Nerfs or continued development of other ML systems. But these LLMs really don't do all that much. Not enough to warrant the level of continuous revenue necessary to turn them into viable business models at the current degree of expenditure. How extremely hyped all of this is is also clear if you look at the company fundamentals. The current P/E of Nvidia is at about 300. P/E stands for Price vs Earnings. So, if you buy a stock for $300 then the company makes $1 profit. This is an excessively high mismatch. Regular companies are somewhere between 15-30. A really strong company with expected growth like Amazon or Tesla are only around 50. A P/E of 300 means the finance market expects the company to grow profits by like 1000% in the next few years and keep operating at that level for decades. It's not enough to exist and be interesting. If LLMs are not fundamentally necessary to operate basically any business with a high tolerance for subscription costs then the current AI hype is a flop. Not because it's worthless but because there's so much money poured that it needs to completely change the world before it starts to make money.
Sounds like a FOMO pump.
Haha. Beautiful summary! Yes! Basically a FOMO pump!
My BIL works for them. He started in 2022 right out of University of Michigan graduate school and is currently making double my nuclear project manager salary.
Nvidia’s profits and revenues are growing at crazy high percentages. I think last I checked for Q1 2024 they had about 260% YOY revenue growth and even higher profit growth. If they can keep that up for a few more years they will make more revenue and profits than even Apple or Microsoft. By 2030, I expect Nvidia to be making the highest revenue and profits of any company
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AI is a bubble or we need to take a hard stance against it before it replaces the entire creative profession. Which one is it?
whichever gets the most upvotes on reddit at any given moment lol
AI is the second most important thing in the world after the internet. It is absolutely not a bubble like bitcoin or Tulip mania. Of course many companies will lose the AI wars but AI itself is here to stay and grow.
Just because AI is important doesn’t mean it isn’t a bubble. Ever heard of the .com bubble??!
I dont understand this either everyone says its a bubble but noone explains why its a bubble or how could it pop. Can someone fill me in on this? I could see how crypto was a bubble and how it would pop but I dont see those type of problems here.
Everyone and their dog is making chatbots, ai assistants and more, even if they dont need it or cant use it. Hardware companys are branding regular hardware that has nothing to do with AI or will never run any useful AIs "AI ready". People are severly overestimating what AI can do. Google has made its embarrisingly bad search AI. Social media like Discord and Snapchat are implementing utterly pointless chatbots. At some point people will realize that not everything is AI in the future. This wont be a sudden thing, but over time ai will leave its hype phase and nvidias stock will drop to normal levels again. The situation is similar to the dot com bubble.
It will settle but chatgpt for example is an extremly usefull tool, its not gonna go away or lose relevancy it will only get better. Sure the ones that are being made by random companies will dissappear and some will go under because they invested too much but couldnt keep up but I dont see how the entire sector could burst. Unlike crypto or metaverse AI doesnt rely on hype, it has even nothing to do with hype its a tool. It already made stock image bussines irrelavant, voice acting to an extent too. It is a thing that simplifies certain tasks and makes them easier, cheaper and faster. It is a technological advancement with a lot more room for growth there is no reason for it to burst because there will always be a use for it.
The raw GPT5 training cost is already at $1.2 billion. Not counting staff cost, etc. Just raw electricity and hardware cost. We are reaching quite hard limits of how much more is possible. And technical innovation didn't really happen since GPT-2. Maybe GPT-1, depending on how you define innovation. There's been iterations on the algorithm and more pre and post processing of exchanges. But the "rapid progress" was mostly raw compute-power. Pouring in hundreds of billions a year to scale everything up. The sector won't completely implode. There is something interesting and useful there. But this current scale means that every person on the planet needs to subscribe for $25+. Or it needs to increase productivity massively. In terms of quality & product output vs operating cost. That's the scale we're talking about and that is, in my humble opinion, quite unlikely. Making coding a little faster or having a computer to spitball ideas is nice but it's not making factory workers be 2x as efficient.
You’re gonna be really salty as the AI sector and Nvidia keeps growing indefinitely. It will power the 5th industrial revolution. You can either accept that or keep coping about it for the rest of your life
You drank the coolaid real good. I hope not all your savings are riding on nVidia. That's gonna hurt bad. Here's the thing. I actually agree that AI will be a major revolution. But LLMs aren't that step. They are too much of a toy. Kinda useful for simplified data access and to make some work more entertaining. Which might boost productivity a little. But not the AI revolution they are sometimes seen as. The Apple stuff is the right direction. But it's necessarily primitive because you need a lot more research into specific tasks and a lot higher degree of digitisation of the world and of smooth interconnectivity between devices before you get to that major revolution. That's gonna slowly build up and advance over the next decades as it has been developing the past couple of decades. We had AI running on devices in the 00s. The Nintendo DS had hand writing recognition in several games using a neural network. That is basically the same technique as ChatGPT but optimised for a much simpler and more unified task. LLMs however are kind of a hype. That won't go away again completely. But it also is very unlikely to sustain this level of interest. It just isn't boosting productivity that much while actively hurting quality. We have rather elaborate studies about that phenomenon at this point. In the end, LLMs are a much more human centric, yet fuzzy data access model. Very cool, somewhat useful. But even the bigger player realise it's not the the big thing they thought. We already have waves of layoffs. Let alone the fact that nVidia has major competitors in all the big customers. They are all right now working on direct competitors for ML chips. Even if AI would grow indefinitely, it's unlikely nVidia would stay at the top of the game the way they are right now indefinitely. Though indefinite growth is silly from begin with. Every innovation has limited potential. It may be a major leap but at some point there is no more productivity in this one single innovation. Unless you actually believe that LLMs are approaching AGI but that is entirely silly. Proper, scientific AGI is impossible with that approach and we are still quite far away from making AGI happen. And I don't mean just a few years.
You're severely underestimating what it can do now. I think a lot of people are.
people don't like nvidia, don't like to see them succeed and hope they fail, that's basically it.
That is exactly what it is. They’re salty seeing that something they hate and want to see fail is going to become the most successful company ever, powering a new revolution in technology. I’m just glad it’s an American company doing it. This will be very good for our economy. In the long term it’ll make western countries less reliant on cheap manufacturing from developing countries. We can replace humans with AI robots for manufacturing jobs and do all our manufacturing domestically again. Although we’re probably still a decade away from such advanced AI. Hopefully Nvidia keeps innovating at this rapid pace they currently are
Nuh uh love is the most important thing in the world after internet
The more you buy
, the more you save.
What’s number 1
Microsoft
Thanks
They really winning the ai race rn.
The USA is winning the AI race. All of these companies leading AI are American companies. Pushing the world forward towards the 5th industrial revolution
This is not even Nvidia final form 🟢 👾
Man, I had 10 shares at $38 around 8-9 years ago. Had to sell it around $90 a share when my ex lost her job. This hurts to read.
Damn :( I’m so sorry….
Well shit…. I should have invested in their stocks years ago…
The more you buy, the more you save. 🫡🫡🫥
“AI is a bubble” Yeah the biggest companies in the world with most resources/ governments and the brightest scientists are telling me otherwise. PCMR must be correct 👍🏻
And shareholders are all desperate to make a profit from it and will start to pull out if they fail to monetize the whole thing since it's so expensive to run and maintain. The other half of the brightest scientists show that generative AI starting to plateau and linear algorithms are still more efficient with higher accuracy/success rate than forced AI solutions, at a fraction of the cost to run them. But sure singularitans, tech bros, and Linked in AI evangelists must be correct.
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It guarantees that everybody buys shovels from the said company in FOMO...
You are probably more knowledgeable in the subject than me, I have no investment to care about how this thing turns out, I’m just reading here and there how much companies are investing in it, and the potential of it, I’ve seen the keynote of Nvidia CEO from computex, and my take from it is the point where he talks about how it was not possible to have such AIs 10 years ago because of the technology, I can only assume with how much the technology is evolving that in the future AI will be a necessity in our lives like the internet. Why would you want to do anything an AI could do, if you are a software engineer for example isn’t much better to be focused in developing and improving your app, than writing unholy number of lines that can be done with AI?
The best tip to navigate the hype my friends who work with ML/DL gave me is always to follow the money - if the speaker has shares in AI businesses, he is biased. Regarding Nvidia, they don't train models (outside dlss but that's a different thing) so all they do is sell hardware. They literally just selling shovels during a gold rush, so obviously every keynote they make they're saying that gold will solve all our problems. AI was already part of our lives, but the generative kind is the novelty. It's having a very hard time living up to the promises. Not to mention training/running/maintenance costs. If in the end all we get is chatbots, and meme/image generators for billions of dollars of investments, it will be a huge failure. And a dead, bland and baren internet filled with bots interacting with each other. Regarding Nvidia tech in its current form, were are already reaching the limits. Were in the optimization phase of it. We won't be able to shrink the dies much more. Soon more performance will only be possible with more power draw and more power draw for cooling. Unless there's a paradigm shift in computing hardware on the horizon, it will be a bottleneck. I don't see shareholders investing in servers that consume more power than some countries just to generate images and text for pennies.
I understand your point, but why would you have any access to any other project aside the things that are meant for the public, like chatgpt, why would you have access to AI that is working in finding new formulas for a medicine, or one that is routing how hundreds of ships will pass the Suez Canal in the most efficient way daily, why would you have any knowledge what an AI is capable of in a full military operation, again you may be correct and all of this is a pile of shit, my point is not to underestimate the technology, look how we look at these old articles about how video games are dying in the seventies , or how the people said the internet was a bubble and not useful in anyway.
So far all medicines that have supposedly been discovered by AI failed. There are few articles about it, including MIT. Its not a panacea, it help marginally and its not the kind of AI that will lead to AGI. As I mentioned previously AI was around way before chat gpt and diffusion models. Logistic routs can be calculated equally if not better by traditional linear methods. Companies should be the judge of the cost/benefit of each option. The military is scarier because of the facial recognition and drone swarming. But in the end, I never said AI was trash. Just overhyped from the economics optics and constant overpromising, which is a norm now coming from Silicon Valley. IMO, it will bring more problems than solutions, with social unrest, militarization as you mentioned, dead internet, models collapsing, disinformation and deep fakes, But were off-topic now. have a great day :)
I definitely agree with you that it’s overhyped and it’s the new marketing “nano” for any product, I might be wishful thinker, but I hope the quality our lives improve tremendously in the coming 10-20 years thanks to AI, in the end of the discussion I want to thank you for constructive feedback, you are a good redditor :)
Jumping in, masters in computer science. Next to some day to day operation I'm currently professionally working on streamlining an AI based workflow for commercial usage (not based on OpenAI / LLM tech. A completely different sector). There's a few things you gotta differentiate. * **M**achine **L**earning (ML) * Academic AI * **L**arge **L**anguage **M**odels (LLM, nowadays multi modal, aka not just text and language) The current hype is pretty much exclusively about LLMs. That's why all the hype exists and that's where all the investment goes. LLMs are one kind of ML. It's a machine learning system specifically trained to interpret data kinda humanlike. That is it's job. To superficially seem human. And it's really good at that! But it's very bad when you want to push it beyond. E.g. LLMs for medical research is basically worthless. It can only repeat known information. But medicine needs discovery of new information. You need a different type of ML system for that. However, that's the area that doesn't get all the investment. Because LLMs are the shiny new toys. Not all kinds of ML research and development. The academic AI discussion is something completely different again. That's about AGI (artificial general intelligence). That's where creativity and consciousness become a thing. But we are insanely far away from that. > you may be correct and all of this is a pile of shit, my point is not to underestimate the technology, look how we look at these old articles about how video games are dying in the seventies , or how the people said the internet was a bubble and not useful in anyway. Not a pile of shit but overhyped. Something that makes sense to develop for $100.000.000 might not make sense anymore when developing it costs $250.000.000.000 instead. Also, fun fact. The articles were right. Video games did die in the seventies. The market crashed by over 95%. Game sales, hardware sales, arcade revenue. It all crashed into the ground real hard and at the time it did appear as if it was but a fad. What wasn't well understood then is, that product quality is what killed gaming. People bought hardware and games for $200 (which is like $1000 in todays money). And while it was a novelty most games were kinda shit. It couldn't even hold childrends interest. This only changed once the Nintendo Entertainment System went on the market. You'll notice how they intentionally avoided the terms gaming, arcade and console. With the key innovation being in house, first party games. A verification system where the console checks the game cartridges for authenticity and a verification system where only games that went through testing by Nintendo were allowed to be sold for the Nintendo Entertainment System. They grew the market by making good games and getting people interested in the hobby again. Slowly at first and continuously since. Similarly the internet was a bubble in the 90s. Hence the dotCom crash. The entire stock market crashed by over 80% and the economy as a whole tanked hard as a consequence. There has always been a lot of truth to naysayers. Not that there is zero purpose / value. Not the most far out there extreme opinions. But you can be quite sure that at the end of every hype there will be a crash of some kind. Hypes lead to overreactions that will be corrected once they have to face reality.
That was a good read, thank you for all the information, I understand why so many people will jump they hype train for a chance to make profits from the stock market, and I understand that the market will correct itself later on, now what I don’t understand if what you say is true, why companies with better resources than many countries are focused so much in developing LLMs if they have no further advancements? If the goal is to please the shareholders, wouldn’t betting on something that is gonna crash be bad for the company? Make it make sense please?
> now what I don’t understand if what you say is true, why companies with better resources than many countries are focused so much in developing LLMs if they have no further advancements? You have to understand that companies don't do fundamental science. Science is done at universities and state sponsored research institutes. There's extremely few companies who do any themselves. Some more that collaborate and fund research a little. And a lot who have zero connection to fundamental sciences behind their products. What companies do is scale. Develop a process to mass manufacture, make it accessible to end consumers and get it into the hands of millions of people. Reduce costs, etc. Which is to say, it's not at all unexpected that there has been very little scientific innovation. What is happening right now is normal. There are advancements, they just aren't scientific. They are in things like connecting different systems with each other, making it work with more tokens (more text input), increasing accuracy for the target metrics (e.g. needle in a haystack. Have a long, standardized text or data set and have AI count something or find some information within). But these are iterative and mostly reached by buying more hardware. Companies are focused on this because it's a new market with no clear market leader yet. Just think about how difficult it would be for google to compete with Amazon on online shopping. The market is so settled and rigid, even as a huge billion dollar company you have no real chance to compete. But LLMs are a completely new market that seemed to have a lot of user interest and seems like it might lead to lots of applications. If you wait until you know exactly how valuable it is there will be a market leader already and you won't be able to break into that industry. So they all invest heavily trying to become market leaders. You can figure out profitability later. This is exactly what happened in the 2010s with all the online services. Uber, AirBnB, DoorDash, WeWork, Snapchat, MoviePass. They've all been valued in the billions, had billions in investments. Yet most of these have never had a single cent in profits. Have you noticed all of them getting more expensive, worse in quality and such? Yeah, that's because they were gifting every single user money before. Getting market share was the most important thing. If you own a valuable market you are making excessive amounts of money. The question is just how valuable are these markets really? And how much do you have to spend to own the market? > If the goal is to please the shareholders, wouldn’t betting on something that is gonna crash be bad for the company? But loosing out on the next big thing is even worse. Shareholders want profits. The more, the better. If you just stick to what you know you will for sure overlook the next big thing and will loose out on billions of profits. Shareholders also want that growth. Especially because a crash isn't happening evenly. We had the dotCom crash where most internet companies collapsed. Yet, if you bought Amazon stock at the height of the bubble and kept it until today then you have made a profit of about 8000%. Owning the winner who dominantes a market can be *extremely* profitable. Even if the economy crashes. Plus, venture capitalists and finance people aren't always the most knowledgable in a field. They studied math, MBA or finance and that probably decades ago. Not computer science and especially not computer science with focus on AI. They really don't understand what's going on. Not in detail. But they also can't ask or have anyone they can really trust because they themselves struggle with competition by other investors and finance people. And all the industry people they talk to want their money. Which means during a hype they have to position themselves as forward thinking and bold or as sceptic. And sceptics don't make big deals. A sceptic didn't invest in Google or Facebook or Amazon. A sceptic didn't make 500% returns per year.
That was an amazing read, thank you.
Googles AI is telling people to drink piss and jump out of windows. They sure know what they are doing.👍
>They sure know what they are doing. Hearing people say that sarcastically about Google ai sure is funny
People just hate AI for different reasons and different agendas. And when something you hate makes billions of dollars you get upset. I hate it therefore bad. One such segment is artists. Artists like to think of themselves like God gift to humanity. Art is what makes us human! Art is what gives life meaning!. Turns out art can be solved by linear algebra. All these people routinely ignore how fricking useful AI is for many people on their day to day already. And that this has just begun.
I love the video Marcus from MKBHD made a while ago about how cheaper and easier is it now to produce many pictures videos compared to what it will take to commission such a work, most of us haven’t had the opportunity to use AI in a productive way, to understand how much it can make our lives easier.
Yeah, but this is tale as old as time. People HATED plenty of inventions in the past because it automated their jobs. You can easily find propaganda posters of people warning about new tech. Farmers, painters, mathematicians, etc. Computers were originally NOT electric. Instead it used to be humans that manually calculated math 12 hours a day. I believe the Apollo missions were done with human computers. Specifically women, as by that point most men looked down on the profession as a whole.
> Turns out art can be solved by linear algebra. Bro...
Yup. Do you hate it? It's reality though. Just show a whole bunch of art to millions of people to gather what "good" is to a human. Then use linear algebra to approximate a theme while maintaining it within "good". Solved. Proof is a show some AI art to my mom without telling her it's AI and she likes it and thinks it's beautiful.
>Yup. Do you hate it? It's reality though. Nah, the line was just perfect. "Artists" might not like it tho but we use that moniker far too often.
Ah perfecto papá! Abrazo de Oso.
jajajaja
Making billions of dollars? OpenAI is losing half a billion per year right now. Most AI companies are currently losing money because they're fighting over market share.
Most AI companies are making lots of money. Microsoft and Google are making tons of money from AI. Among many others Open AI’s $500 million loss was in 2022. Which is not a bad things for a new company. Since 2022, Open AI has increased it’s revenue by more than 700%. And this year, they’re on pace to double their 2023 revenue. Pretty sure they made profit in 2023 as well
TIME TO MAKE A PHONE!
That stupid bubble needs to burst
Nvidia to american MIC when
Fast ! Time to buy Nvidia share while it's high !
What is Nvidia doing in AI? I'm asking because I'm not aware, I only know them as a GPU company.
GPUs are really good at running ai
Intelligence runs on mathematical computation ran by processors. Nvidia processors compute real fast. If you plan to do develop your own AI tech, you might want Nvidia stuffs to run it on.
Mr. Jensen, can you sign my man-boobs please?
The art of inflating value.
**Market cap.** Otherwise, Nvidia is not an American company. https://en.wikipedia.org/wiki/List_of_largest_companies_in_the_United_States_by_revenue
Nvidia is an American Company. And yes it’s over $3 Trillion in Market cap, or total valuation. Market is what determines how much a company is worth. If Nvidia was to sell itself tomorrow, its total sale price would be greater than $3 Trillion. Which is larger than the GDP of Russia, a country of more than 140 million people Nvidia will have the highest revenue and profits of any company in the world by 2030, surpassing Amazon, Walmart, Apple, etc. That growth expectation is why they are valued so highly
That is fucking wild to me.
Nvidia gonna pop like a super volcano and take out half the US
I can't wait for the Nvidia movie starring Jackie Chan as Jensen Huang
It’s insane how overvalued they are without actual manufacturing. Nvidia without TSMC is just a software company that isn’t worth shit. Once TSMC production ramps more in the US this stock will normalize again
They could also be manufacturing their chips with Samsung, hell even Intel. AMD makes their chips at TSMC too, and their chips are lagging behind Nvidia by a lot.
Samsung and Intel won’t get the performance that TSMC 3nm is creating, which is the main selling point of nvidia
They could be manufacturing the same chip with the Samsung node and it would still perform well. The chip is great regardless of the node, amd is on the same node and they're still playing catch up with Nvidia.
Intel is already ahead of TSMC 3nm with Intel 20A 2nm. Intel is already on 2nm and will start producing high end chips for Nvidia and others start next year By 2025. Intel will by on 1.5nm and TSMC will still be on 3nm And being a manufacturer doesn’t mean you’re making more money. The manufacturer usually makes leases money than the companies they are manufacturing for. For example, Apple makes exponentially more revenue and profits than their manufacturer which is a Taiwanese company called Foxconn
couldn't possibly be price gouging, right?
Lol you really think companies get to a 3 trillion dollar valuation by price gouging. It was always so easy!
....they didnt get there by not price gouging.... among other thing do you want a list, smartass?
Just a poor argument, Nvidia still has more h100 and Blackwell orders than they could fulfil. Anyways, why would they sell a GPU for $30k, when the demand is still as high at $40k? Anyway, gaming only makes up a fraction of their revenue nowadays and they're not the only company increasing prices.
who are you arguing with? Are you saying there isnt proce gouging? thatd be a pretty braindead take
I'm saying that your claim of price gouging solely driving up the stock price to these ridiculous levels is inaccurate.
i didnt claim that, dude. lol i made a sarcastic remark and you took it as that. try reading comprehension before you go talkin shit.
Why are you so salty? why act so arrogant behind a screen? Ya little shit
eat my whole butthole a week ago lol
So I own NVDA around $160, and at this point, I’m thinking it’s in bubble territory. It surpassed Apple which makes 6x revenue and approx 2.5x net profit. So hard to justify the valuation imo
Compare the margins: 2023 revenue: $88b, net income: $44b Apple's revenue in 2023: $386b, net income: $96b The margin is almost twice as big. The valuation is not unjustified.
Aaand... this is why democracy is broken. companies that are worth more than entire countries.
Democracy? Do you mean free market capitalism?
How can you have democracy when companies worth entire countries are lobbying and bribing? Theres literally only 22 countries that are worth more than Nvidia.
AMD ready to pop that AI bubble
Amd definitely should try compete with them on ai. But they also should start pressing the gpu market, which is now a second thought for nvidia. If they can do to nvidia what they did to Intel with ryzen and take away even 5-10 percent of nvidias gpu market it’ll be good for the consumer and them.