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The Future of Compute: Nvidia's Crown Is Slipping
- alephnerd 1y agoServices! Services services services! This is what will help protect Nvidia now that DC and cluster spend is cooling. They own the ecosystem thanks to CUDA, Infiniband, NGC, NVLink, and other key tools. Now they should add additional applications (the AI Foundry is a good way to do that), or forays into adjacent spaces like white-labeled cluster management. Working on building custom designs and consulting on custom GPU projects would be helpful as well by helping monetize their existing design practice during slower markets. Of course, Nvidia is starting to do both, with Nvidia AI Foundry for the former and is working on the latter by starting a GPU architecture and design consulting as announced at GTC and under McKinney
- scrlk 1y ago> Working on building custom designs and consulting on custom GPU projects would be helpful as well by helping monetize their existing design practice during slower markets. Apart from Nintendo, who has successfully partnered with Nvidia? Apple, Microsoft and Sony have all been burnt in the past.
- alephnerd 1y agoNational Labs (kinda), a big pharma company I don't think I can disclose, and a couple HFTs, but it's a muscle they will need to build out, because Broadcom are Marvell are eating their cake. Nvidia has started formalizing that last year [0], but it's a new muscle for them. [0] - https://www.reuters.com/technology/nvidia-chases-30-billion-custom-chip-market-with-new-unit-sources-2024-02-09/ https://www.reuters.com/technology/nvidia-chases-30-billion-...
- schaefer 1y agoWatch the Nvidia GTC keynote. The list of partners is extensive.
- AlotOfReading 1y agoBeing a partner on the GTC slidedecks isn't remotely good evidence that they haven't been burned by Nvidia.
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- voidspark 1y ago> They own the ecosystem thanks to CUDA, Infiniband, NGC, NVLink, No they do not. The article explains that Google, Amazon, Microsoft, and Meta are developing their own hardware and software for AI/HPC. Google Gemini was not trained using CUDA or Nvidia hardware.
- liuliu 1y agoOnly one of the 4 companies you mention is successful at this. And it will remain that way. Chinese CSPs are the only ones can develop their own hardware / software for AI / HPC.
- voidspark 1y agoWrong. It's all explained in the article. https://www.reuters.com/technology/artificial-intelligence/meta-begins-testing-its-first-in-house-ai-training-chip-2025-03-11/ https://www.reuters.com/technology/artificial-intelligence/m... https://azure.microsoft.com/en-us/blog/azure-maia-for-the-era-of-ai-from-silicon-to-software-to-systems/ https://azure.microsoft.com/en-us/blog/azure-maia-for-the-er... https://aws.amazon.com/ai/machine-learning/trainium/ https://aws.amazon.com/ai/machine-learning/trainium/
- liuliu 1y agoOf course corporations will have a lot of different bets. Most of them will not pan out but they will try. Meta will not be able to produce a chip that can run GenAI workload in the next 2 years. Microsoft is doing a side-quest, and they haven't even proved themselves with their FPGA adventure and ARM server adventure. Amazon is legit, they have done well on ARM server, but trainium is TBD, and how much they will pull back in a recession given Jassy is a number guy will be a question mark. No need to discuss, we can just see this in 2 years, everything will be crystal clear.
- voidspark 1y agoYeah that's right. The chip may not be as good as Nvidia's, but it doesn't need to be. As the article explains, Nvidia can still lose their position even if they have the best chips.
- bee_rider 1y agoYeah, that immediately came to mind—they talk about distributed systems being a problem, but Nvidia owns the battle-tested and well-regarded HPC networking hardware (Infiniband). There’s maybe some wiggle room, in that these AI distributed systems might not (?) look like HPC/scientific computing systems—maybe they don’t need Infiniband style low latency. So these other funky networks might work. But like, Nvidia has the good nodes and the good network. That’s a rough combination to compete against.
- ivape 1y agoInteresting, Marvell is actually down over 50% this year. I just don't understand the bear case at all. I'm a nobody and I'm still willing to buy a $1500 gpu, and that GPU still can't do what the cloud does. The next $1500 gpu probably can't either. It feels like we're over thinking this. The hardware roll-out is all there is imho. Jensen has mentioned he sees Nvidia being a 10 trillion-dollar company, and I'm willing to meet him half-way with my faith here. Edit: - I wonder what's stopping Nvida from releasing an AI phone - A LLM competitor service (Hey, how about you guys make your own chips?) - They are already releasing an AI PC - Their own self driving cars - Their own robots If you mess with them, why won't they just compete with you? Just wanted to say one more thing, that Warren Buffet famously said he regretted not investing in both Google and Apple. I think something like this is happening again, especially as there are lulls that the mainstream public perceives, but enthusiasts don't. To maintain the hyperbole, if you are not a full believer as a developer, then you are simply out of your mind.
- fnordpiglet 1y agoGaming GPUs is a side business for them at this point. It’s all about AI.
- chneu 1y agoGosh, I have a coworker who acts like gaming GPUs are the only hardware that matters. I've tried explaining that one or two AI data center clients for Nvidia dwarfs the entire gaming GPU market, but he just doesn't get it.
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- aleph_minus_one 1y ago> Gosh, I have a coworker who acts like gaming GPUs are the only hardware that matters. > I've tried explaining that one or two AI data center clients for Nvidia dwarfs the entire gaming GPU market, but he just doesn't get it. I have a feeling that the different judgements come from the fact that the coworker thinks that the AI bubble will soon burst - thus, in his judgement, the AI data center sector of Nvidia is insanely overvalued, and will collapse. What will "save" Nvidia then will be the gaming GPUs. Thus, in his opinion, this is the sector that matters most for Nvidia, since it will become Nvidia's lifeline when (not "if"! - in your coworker's judgement) things will go wrong in AI. You, on the other hand believe AI data centers are here to stay (which is a bold assumption: it could happen that AI will move more to the edge), and no big competition will arise for NVidia for "big AI ASICs" (another bold assumption). Your judgment is based on these two strong assumptions about the future, while your coworker's is based on different (possibly similarly bold) assumptions.
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- ein0p 1y agoHow can it be "slipping" if they sell out of all their stuff years in advance? I still can't find any sanely priced 5090s. And before you point out that 5090s are not their main revenue driver, they're sold out of H100s and so on years in advance, too.
- tintor 1y agoAnd how many 5090 were actually produced? It is easy to sell out with low volume production.
- voidspark 1y agoThe article is about HPC/AI where they are quickly becoming less competitive. Gaming is only 7% of Nvidia's revenue.
- chneu 1y agoConsumer hardware is nothing for Nvidia. Gamers need to realize that, lol.
- crote 1y agoSame way they lost the crypo mining market. They are losing their biggest customers to custom in-house silicon, and smaller orders are going to compete with a market being flooded by superfluous hardware from companies which either went bust due the the AI bubble shrinking, or went bust because they weren't able to compete with the big fish.
- deleted 1y ago[deleted]
- adventured 1y agoThe AI market will be drastically larger in 10-15 years, not smaller. The bubble aspects of the present will be trivial compared to the long-term result, as with the dotcom bubble. Google all by itself is worth more today than all the combined dotcoms in existence in 1999.
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- echelon 1y ago> While the H100 generation likely represents peak pricing power (new B200s have lower margins and higher COGS), an immediate lack of alternatives means they’ll continue to print cash. That's not a trend yet. We're about to enter an era where most media is generated. Demand is only going to go up, and margins may not matter if volume goes up. > The open question is long-term (>6yrs) durability1. Hyperscalers (Google, Microsoft, Amazon, and Meta) are aggressively consolidating AI demand to become the dominant consumers of AI accelerators; while developing competitive, highly-credible chip efforts. Hyperscalers aren't the only players building large GPU farms. There are large foundation model companies doing it too, and there are also new clouds that offer compute outside of the hyperscaler offerings (CoreWeave, Lambda, and dozens of others). Granted, these may be a drop in the bucket and hyperscalers may still win this trend.
- thot_experiment 1y agoMost media might be generated, but it remains to be seen whether most media that people will pay for will be generated.
- echelon 1y agoYou don't pay for Facebook, Instagram, Reddit, TikTok. Most don't pay for YouTube. But to your point, Disney is using GenAI in their new live action Moana film. Presumably that'll do lots of sales.
- thot_experiment 1y agoYou do absolutely pay for all those things with your attention, if genAI content doesn't hold people's attention then your ad space will be cheap. > Disney is using genAI in their new live action Moana film If this is your bar then sure, but I think the interesting question is when/if we cross into a regime where mostly self-managed genAI is in true competition with the media you consume day to day. Not something that's hundreds of thousands of person hours being enhanced by genAI. I don't think there's any chance we see a total collapse of demand for this stuff but I think the jury is still out on how valuable it truly is imo. I'm sure it's non zero and I expect demand will continue to rise, but it may plateau or slow sooner than people think, I just don't think we can clearly say yet.
- 01100011 1y agoSeems like another article based on the assumption that Nvidia just sits there doing nothing while everyone who has so far proven unable to compete suddenly figures it out and steals their lunch. At some point one of these Nvidia doomers will be right but there is a long line of them who failed miserably.
- leptons 1y agoGoogle is investing in QC quite a bit, I wonder if Nvidia has. Even Nvidia is going to look antiquated someday.
- zelphirkalt 1y agoNot every problem is solved faster by a QC. For many things using a QC would be pure waste.
- Jlagreen 1y agoOne of the most important contributors to QC is Nvidia because they try to help with GPUs in creating SW for QC and simulations. Nvidia has cuda quantum for years now.
- thebruce87m 1y agoApparently QC now stands for Quantum Computing for anyone else like me who is wondering why Google is investing in Quality Control.
- voidspark 1y ago> everyone who has so far proven unable to compete The article explains that Nvidia's biggest customers (50% of datacenter revenue) are switching to their own hardware.
- kadushka 1y agoSeems like the opposite to me: https://www.datacenterdynamics.com/en/news/google-in-talks-to-rent-nvidia-blackwell-gpus-from-coreweave-report/ https://www.datacenterdynamics.com/en/news/google-in-talks-t...
- Havoc 1y agoThey’re basically going from a functional monopoly to having to compete. Not ideal for them but hardly a death blow
- mkoubaa 1y agoWhen takes like these go mainstream (Financial Times, etc) I buy.
- ericmcer 1y agoI loaded calls this afternoon, two months out so I am not too scared. I figure regardless of tariffs and competition and other fluctuations the demand for computing power will endlessly trend upwards and as much as we can produce will be consumed. Good luck to you.
- morsecodist 1y agoEven if this were true it doesn't necessarily mean it will translate into stock performance. Expected growth is priced in to the current stock price. Also there are lots of "computing power" companies that are not doing too hot (intel sells "computing power"). Just because there is growth in the sector doesn't mean a given company will do well. Personally, I have found NVIDIA to be one of the most hyped stocks I have ever seen and it feels weird to take a position that it is under-hyped. That said, people aren't capable of beating the market consistently so I would never invest based on this, or any intuition or information I had.
- lvl155 1y agoI am starting to think AMD is doing this on purpose and they have some secret handshake deal with Nvidia. Nvidia has at least two more years of “sellout at any price” market. Not because they have the best solution (which they do atm) but because they basically share the monopoly with Apple at TSMC. And Apple is content wasting that away on iPhones.
- moralestapia 1y agoCEOs are cousins so there's that ...
- cornhole 1y agonvidia's gpu drivers qa is definitely slipping
- latchkey 1y agoOct 2024
- otistravel 1y agoThe author completely underestimates NVIDIA's strategic position. They don't need to win the hardware game forever - they're building the entire AI stack: hardware, networking, software, models, developer tools. Nobody else is doing this comprehensively. While hyperscalers are making custom chips for their own use cases, NVIDIA is building a unified platform that everyone else will use. This isn't about who makes the best GPU, it's about who builds the ecosystem that becomes the industry standard.
- Jlagreen 1y agoActually, Nvidia has already built the ecosystem. Now, they are refining and adapting it to the fast research in AI. Others talk about chips when Nvidia thought about interconnects 8 years ago. Today, competitors try to catch up on this while Nvidia talks about One Giant GPU. The next step will be scale up and then scale out. Nvidia is always ahead because what the article fails to see is that where CSPs are today is where Nvidia was in the last decade. Nvidia has a working ecosystem for everyone which they can now fine tune with actual customers.