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It was an attempt to decrease demand for the cards, thereby reducing price. The simplest market solution to high demand and inadequate supply would be to raise
by oofabz 5y ago
It was an attempt to decrease demand for the cards, thereby reducing price.
The simplest market solution to high demand and inadequate supply would be to raise the price of the cards. This would maximize short-term profits but Nvidia felt it was not the right strategic move. Why not? Here are some guesses:
- pricing gamers out of the GPU market would damage Nvidia's historical market - video games
- pricing AI users out of the GPU market would damage an exciting new market Nvidia is working very hard to cultivate
- tying a large fraction of your business to cryptocurrency is risky given the volatility of that market
I think Nvidia sees gaming and AI as viable long-term markets and feels very invested in maintaining the health of those markets and Nvidia's participation in them. They are much less interested in cryptocurrency mining customers because they don't see a long-term future for themselves there. Nvidia is willing to take a short-term hit to profits to get more of their products into the hands of gamers and AI researchers.
However Nvidia has not completely forsaken short-term profitability. They have substantially raised the price of GPUs and they are making considerable amounts of money selling GPUs to miners. They are trying to take a middle path and balance competing interests.
- Ekaros 5y agoGamers by new GPUs every cycle to every third cycle. Keep them covered and having hardware and the developers will continue supporting your hardware too. Decent market, with growth potential from countries getting richer. AI, get your tech in, get them them invested on software level and as it scales demand will go up and stay up. Just see how long Intel has been around. Similar position and inertia is sure way to make money. Crypto on other hand purely chaces profits. And you can't really rise the prices for partners, that is board manufacturers too much. So even if end user prices are high, not all or even big chunk transfer to Nvidia...
- blihp 5y agoThat argument falls apart when you realize that LHR didn't cripple nVidia's cards, it merely reduced their mining performance to being just a bit stronger (but still stronger) than AMD. Had they really wanted to kill miner interest in their cards they would have reduced hashing performance by something like 90% with LHR. I think all they were ever really trying to do was decrease the relative desirability of nVidia cards specifically by miners, not eliminate it entirely.
- simmerup 5y agoSo if they ever have a bad quarter increase the LHR over night and force crypto miners to buy the ‘new’ cards to stay competitive