6 ms·

My opinion is that the market is treating Nvidia as the shovel sellers during a gold rush. If almost every business that wants to do AI needs to buy Nvidia hard

My opinion is that the market is treating Nvidia as the shovel sellers during a gold rush. If almost every business that wants to do AI needs to buy Nvidia hardware, their sales will go through the roof. That’s what the market is pricing into the Nvidia stock. It is very unlikely that Apple will sell their “server” hardware to other businesses in that way. Their advantage is the vertical integration, for themselves. While I am bullish on AAPL, I don’t expect it to have a run like Nvidia.

zarzavat 2y ago
NVIDIA are not selling shovels, they are selling shovel-making machines to the shovel-sellers (the companies making foundation models). When the market is saturated with shovel-making machines, what then?
- esmy 2y ago
  The last time I remember this happening, the shovel-making machines lost a lot of value and got amortised out to the second hand market. When the prevailing coin still mined on GPUs switched algorithms the bottom of GPU prices fell out on eBay. I expect at some point a) the training and the inference will move to even more specialised hardware and the current existing silicon go to either hobbyists or some other market that requires the current cards b) the way in which we do AI may fundamentally change in ways we can't predict, causing the required hardware to also change (move to FPGA or favouring some other aspect than VRAM) In both scenarios NVIDIA isn't the one who win, because the sudden influx lifts a secondary market nv don't profit from directly. I personally don't think they'll be able to sustain their current valuation past the current AI rush, and will compact back down to somewhere their levels pre-chatgpt. That said I'm just a guy on the Internet who wouldn't mind some beefy ex-datacentre gear if I could make it work for video editing workloads.
  - pbronez 2y ago
    Heh I am so ready to put an A100 in my homelab. Gonna take some intelligent power management though…
    - xattt 2y ago
      Have you considered running busbars from your closest pole transformer?
      - pbronez 2y ago
        haha no fire hazards there! The official specs [0] say the A100 80GB has a 300W TDP. That's pretty doable on standard domestic power... harder if you want to run multiples. [0] https://www.nvidia.com/content/dam/en-zz/Solutions/Data-Center/a100/pdf/nvidia-a100-datasheet-us-nvidia-1758950-r4-web.pdf https://www.nvidia.com/content/dam/en-zz/Solutions/Data-Cent...
    - Gracana 2y ago
      Same here. My eBay watchlist always has a few in it, but the prices just aren't where I need them to be. For now I am focused on inference with a dual 3090 rig, and my next step will be to fit another pair of 3090s, which is the max I can easily support with my AM5 motherboard. What's slowing me down is the fact that I can't run server hardware due to noise, and I can't run an open-air setup because my cats would get into it, so I need to buy or build a case to hold everything.
      - pbronez 2y ago
        Dug into A100 sale prices using Ebay's Terapeak analytics. I found several recent sales for $2000 or less: https://www.ebay.com/itm/335392812272?nordt=true https://www.ebay.com/itm/335392812272?nordt=true https://www.ebay.com/itm/335408349837?nordt=true https://www.ebay.com/itm/335408349837?nordt=true https://www.ebay.com/itm/335414821299?nordt=true https://www.ebay.com/itm/335414821299?nordt=true Too good to be true? Perhaps. For $2000 I might trust Ebay's buyer protections...
        Gracana 2y ago
        Wow! Yeah, I would have taken a shot at that. The seller seems legitimate, judging by their other listings.
- ants_everywhere 2y ago
  This is totally not a space I understand. But it seems like there are possible threats to NVIDIA, such as (1) MLIR, ROCm, or some other tooling that reduces CUDA's moat, (2) AMD attracting investment to go after NVIDA (3) ARM-based GPUs or accelerators gaining traction among cloud companies that have huge fleets of AI devices and also have the money to devote to custom chips Can anyone who understands the industry explain why those threats (or similar ones) aren't a major issue for NVIDIA?
  - gmays 2y ago
    Not an expert, but can give it a shot: (1) Much development is already moving from CUDA to the LLM, so less of an issue. Nvidia is also doing more work to increase interoperability. Could be an issue I guess, but doesn't seem like it since there's nothing close to CUDA or the ecosystem. (2) AMD has attracted significant investment looking at appreciation in its market cap, with a PE ration 3X Nvidia's. However, AMD is so far behind in so many ways, I don't believe it is an investment problem, but structural. Nvidia has just been preparing for this for so long it has a temendous head start, not to mention being more focused on this. Remember AMD also competes with Intel, etc. (3) Hyperscalers already are building their own chips. It seems even Apple used its own chips for Apple Intelligence. It's relatively (which is doing a lot of lifting in this sentence because it's all HARD) not too hard to make custom chips for AI. The hard (near impossible) thing is making the cutting edge chips. And the cutting edge chips are what the OpenAIs of the world demand for training, but releasing the newest best model 1-3 months ahead of a competitors is worth so much. If anything, I'd say the biggest threat to Nvidia in the next 1-3 years is an issue with TSMC or some new paradigm that makes Nvidia's approach suboptimal.
    - ants_everywhere 2y ago
      Thanks, that was extremely helpful. I don't think I understand your point in (1) that it's less of an issue because development is moving to the LLM. I can infer that maybe CUDA isn't a big part of the moat given your other points that the hard part is making cutting edge chips.
szvsw 2y ago
The one area that I think Apple might be setting themself up well for is the longer term edge device AI race. It’s reasonable to think that AI will become more and more embedded in all aspects of computation and communication, and with that, it seems plausible to think that running and executing inference at the edge on devices with low power and compute capabilities relative to what’s available in the cloud will be a desirable deployment methodology - cost, bandwidth, robustness, etc etc. Obviously there’s nothing of the sort in the works now, but it’s not totally implausible to think that the expertise and infrastructure apple is developing now might be setting themselves up to also handle inference for things like home automation systems, industrial sensors and actuators, etc which may all need edge inference capabilities. Chips like the M Series or on the other side the NPU will presumably be coming to many devices outside of the mobile/pc market and it doesn’t seem totally insane to me to think that Apple might want to get into that world. Again, this is all just speculation about long term pathways that might be unlikely after all.
itsoktocry 2y ago
>If almost every business that wants to do AI needs to buy Nvidia hardware, their sales will go through the roof. This will undoubtably prove to be temporary. >It is very unlikely that Apple will sell their “server” hardware to other businesses in that way. The point is Nvidia isn't required.
- fennecbutt 2y ago
  At this point, yeah for inference maybe they aren't, but we already knew this. Training is still a different story, imo.
novok 2y ago
IMO the fact that apple just made rack mountable apple silicon for this private cloud, their GPU / AI compute is equal to nvidia on a power/W basis, they are looking for their next revenue expansion territory from flat lining hardware growth and the fact that nvidia is worth more than them is enough of an indication that will probably make apple silicon server hardware in the near future just on a pure money making basis, even if it's not how they typically focus. They kind of lucked out with apple silicon and their unified memory architecture.
- andruby 2y ago
  > and the fact that nvidia is worth more than them You scared me. I know the market is hyping up Nvidia hard, but if it was really worth more than Apple then things would really be crazy. AAPL market cap is still 10x NVDA’s (3.2T vs 330B), so not yet too crazy. Update: Nvda is at 3.24T. ddg “nvda market cap” shows the wrong amount. It probably doesn’t take the stock split into account. Djeez. That’s. Well, time to short.
  - fennecbutt 2y ago
    The market is hyping Nvidia because Apple doesn't have any silicon with more performance than nvidia for training... Apple silicon isn't magic.
- fennecbutt 2y ago
  Their server hardware only does inference, not training...

zarzavat 2y ago

NVIDIA are not selling shovels, they are selling shovel-making machines to the shovel-sellers (the companies making foundation models). When the market is saturated with shovel-making machines, what then?

esmy 2y ago
The last time I remember this happening, the shovel-making machines lost a lot of value and got amortised out to the second hand market. When the prevailing coin still mined on GPUs switched algorithms the bottom of GPU prices fell out on eBay. I expect at some point a) the training and the inference will move to even more specialised hardware and the current existing silicon go to either hobbyists or some other market that requires the current cards b) the way in which we do AI may fundamentally change in ways we can't predict, causing the required hardware to also change (move to FPGA or favouring some other aspect than VRAM) In both scenarios NVIDIA isn't the one who win, because the sudden influx lifts a secondary market nv don't profit from directly. I personally don't think they'll be able to sustain their current valuation past the current AI rush, and will compact back down to somewhere their levels pre-chatgpt. That said I'm just a guy on the Internet who wouldn't mind some beefy ex-datacentre gear if I could make it work for video editing workloads.
- pbronez 2y ago
  Heh I am so ready to put an A100 in my homelab. Gonna take some intelligent power management though…
  - xattt 2y ago
    Have you considered running busbars from your closest pole transformer?
    - pbronez 2y ago
      haha no fire hazards there! The official specs [0] say the A100 80GB has a 300W TDP. That's pretty doable on standard domestic power... harder if you want to run multiples. [0] https://www.nvidia.com/content/dam/en-zz/Solutions/Data-Center/a100/pdf/nvidia-a100-datasheet-us-nvidia-1758950-r4-web.pdf https://www.nvidia.com/content/dam/en-zz/Solutions/Data-Cent...
  - Gracana 2y ago
    Same here. My eBay watchlist always has a few in it, but the prices just aren't where I need them to be. For now I am focused on inference with a dual 3090 rig, and my next step will be to fit another pair of 3090s, which is the max I can easily support with my AM5 motherboard. What's slowing me down is the fact that I can't run server hardware due to noise, and I can't run an open-air setup because my cats would get into it, so I need to buy or build a case to hold everything.
    - pbronez 2y ago
      Dug into A100 sale prices using Ebay's Terapeak analytics. I found several recent sales for $2000 or less: https://www.ebay.com/itm/335392812272?nordt=true https://www.ebay.com/itm/335392812272?nordt=true https://www.ebay.com/itm/335408349837?nordt=true https://www.ebay.com/itm/335408349837?nordt=true https://www.ebay.com/itm/335414821299?nordt=true https://www.ebay.com/itm/335414821299?nordt=true Too good to be true? Perhaps. For $2000 I might trust Ebay's buyer protections...
      - Gracana 2y ago
        Wow! Yeah, I would have taken a shot at that. The seller seems legitimate, judging by their other listings.
ants_everywhere 2y ago
This is totally not a space I understand. But it seems like there are possible threats to NVIDIA, such as (1) MLIR, ROCm, or some other tooling that reduces CUDA's moat, (2) AMD attracting investment to go after NVIDA (3) ARM-based GPUs or accelerators gaining traction among cloud companies that have huge fleets of AI devices and also have the money to devote to custom chips Can anyone who understands the industry explain why those threats (or similar ones) aren't a major issue for NVIDIA?
- gmays 2y ago
  Not an expert, but can give it a shot: (1) Much development is already moving from CUDA to the LLM, so less of an issue. Nvidia is also doing more work to increase interoperability. Could be an issue I guess, but doesn't seem like it since there's nothing close to CUDA or the ecosystem. (2) AMD has attracted significant investment looking at appreciation in its market cap, with a PE ration 3X Nvidia's. However, AMD is so far behind in so many ways, I don't believe it is an investment problem, but structural. Nvidia has just been preparing for this for so long it has a temendous head start, not to mention being more focused on this. Remember AMD also competes with Intel, etc. (3) Hyperscalers already are building their own chips. It seems even Apple used its own chips for Apple Intelligence. It's relatively (which is doing a lot of lifting in this sentence because it's all HARD) not too hard to make custom chips for AI. The hard (near impossible) thing is making the cutting edge chips. And the cutting edge chips are what the OpenAIs of the world demand for training, but releasing the newest best model 1-3 months ahead of a competitors is worth so much. If anything, I'd say the biggest threat to Nvidia in the next 1-3 years is an issue with TSMC or some new paradigm that makes Nvidia's approach suboptimal.
  - ants_everywhere 2y ago
    Thanks, that was extremely helpful. I don't think I understand your point in (1) that it's less of an issue because development is moving to the LLM. I can infer that maybe CUDA isn't a big part of the moat given your other points that the hard part is making cutting edge chips.

szvsw 2y ago

The one area that I think Apple might be setting themself up well for is the longer term edge device AI race. It’s reasonable to think that AI will become more and more embedded in all aspects of computation and communication, and with that, it seems plausible to think that running and executing inference at the edge on devices with low power and compute capabilities relative to what’s available in the cloud will be a desirable deployment methodology - cost, bandwidth, robustness, etc etc. Obviously there’s nothing of the sort in the works now, but it’s not totally implausible to think that the expertise and infrastructure apple is developing now might be setting themselves up to also handle inference for things like home automation systems, industrial sensors and actuators, etc which may all need edge inference capabilities. Chips like the M Series or on the other side the NPU will presumably be coming to many devices outside of the mobile/pc market and it doesn’t seem totally insane to me to think that Apple might want to get into that world. Again, this is all just speculation about long term pathways that might be unlikely after all.

itsoktocry 2y ago

>If almost every business that wants to do AI needs to buy Nvidia hardware, their sales will go through the roof. This will undoubtably prove to be temporary. >It is very unlikely that Apple will sell their “server” hardware to other businesses in that way. The point is Nvidia isn't required.

fennecbutt 2y ago
At this point, yeah for inference maybe they aren't, but we already knew this. Training is still a different story, imo.

novok 2y ago

IMO the fact that apple just made rack mountable apple silicon for this private cloud, their GPU / AI compute is equal to nvidia on a power/W basis, they are looking for their next revenue expansion territory from flat lining hardware growth and the fact that nvidia is worth more than them is enough of an indication that will probably make apple silicon server hardware in the near future just on a pure money making basis, even if it's not how they typically focus. They kind of lucked out with apple silicon and their unified memory architecture.

andruby 2y ago
> and the fact that nvidia is worth more than them You scared me. I know the market is hyping up Nvidia hard, but if it was really worth more than Apple then things would really be crazy. AAPL market cap is still 10x NVDA’s (3.2T vs 330B), so not yet too crazy. Update: Nvda is at 3.24T. ddg “nvda market cap” shows the wrong amount. It probably doesn’t take the stock split into account. Djeez. That’s. Well, time to short.
- fennecbutt 2y ago
  The market is hyping Nvidia because Apple doesn't have any silicon with more performance than nvidia for training... Apple silicon isn't magic.
fennecbutt 2y ago
Their server hardware only does inference, not training...