8 ms·

They’re all pretty motivated, they’ve been motivated for years, and almost nothing is happening. This situation isn’t exactly a poster child for the Efficient M

They’re all pretty motivated, they’ve been motivated for years, and almost nothing is happening. This situation isn’t exactly a poster child for the Efficient Markets Hypothesis. Every year just sounds like “Nvidia’s new consumer GPUs are adding new features, breaking previous performance ceilings, running games at huge resolutions and framerates. Their datacenter cards are completely sold out because they can spin straw into gold, and Nvidia continues to develop new AI and graphics techniques built on their proprietary CUDA framework (that no one else can implement). Meanwhile AMD has finally sorted out raytracing, and their consumer GPUs are… well not as good as Nvidia’s but they’re a better value if you’re looking for a competitor to one of Nvidia’s 60 or 70 line GPUs!”

ericmay 3y ago
> This situation isn’t exactly a poster child for the Efficient Markets Hypothesis. I'm unsure why you're criticizing the Efficient Markets Hypothesis or even using it here, but you need to also analyze this with some time horizon because the market and marketplaces are not static.
- willis936 3y ago
  Their description could be used to describe the situation in 2023, 2022, 2021, 2020, 2019, 2018, 2017, and 2016.
lotsofpulp 3y ago
Efficient market hypothesis is unrelated to Nvidia’s competitors being unable to offer a competing product so far. https://www.investopedia.com/terms/e/efficientmarkethypothesis.asp https://www.investopedia.com/terms/e/efficientmarkethypothes... > The efficient market hypothesis (EMH), alternatively known as the efficient market theory, is a hypothesis that states that share prices reflect all information and consistent alpha generation is impossible.
- ikrenji 3y ago
  you know what he meant...
  - jbc1 3y ago
    I honestly dont. I'm trying to think of what principle they could have meant with "This situation isn’t exactly a poster child for X" where X is any economic principle and coming up empty. Best I've got is "central planning". One firm being able to handily out perform others despite them also being both motivated and well capitalised lends itself pretty heavily towards markets being good, but I hardly think they were referring to "central planning" when they wrote "efficient market hypothesis". If it's so obvious to you that you're dropping ellipsis, care to clue us in?
    - mkaic 3y ago
      My impression was that they used "Efficient Market Hypothesis" to mean "the theory that free-market competition rapidly drives down prices and breaks up monopolies on its own".
      - sph 3y ago
        That theory is still valid, the issue is that the competition can't or won't even try to make a better product or a cheaper one. The rule only applies if there exist competing products in the first place. If there was any, the prices would go down as we have seen a billion times.
        roughly 3y ago
        So, why’s that not happening, and what’s it imply for the rest of the theoretical framework?
        supazek 3y ago
        It’s not happening because 10,000 people who have more intimate knowledge of the business than you or I ever will have made decisions to best suit their current conditions. This isn’t an exception to the rule, you’re just looking at a small timeframe and a remarkably performant company. Why is it so bad for a company to be successful when they have provided so much back to society in the form of R&D? Besides, if I’m doing ML my boss has paid for the card anyway so the price doesn’t concern me.
kimixa 3y ago
Tech design and development seems, to me at least, pretty much naturally opposed to the "being kept in check with competition" state - as design isn't really a cost that scales per-unit, the company that sells slightly more can afford to put more into development at the same per-unit margin, which snowballs. At some point, they own the entire market - or enough that they functionally control it, and start leveraging this position. I'd argue we're seeing this from Nvidia right now. People talk about AMD being competition - but from most stats I've seen, they're ~10% of dGPU sales, with Nvidia being the other 90% (with new Intel offerings being pretty much noise now). That means that if they invest the same proportion into development, NVidia nearly have 10x the resources. It may be that tech companies like this would "naturally" form a monopoly without outside (IE government) interference, as the only reason that multiplier of development resources doesn't completely crush new entrants is rather extreme mismanagement, or a new segment is created where the design resource don't really cross over that much. I don't see anything like that happening in the short term, if anything there seems to be more opportunity for cross pollination of development within these corporations, as there's a fair bit of design similarities between various silicon (GPUs, CPUs, accelerators for the current ML techniques etc.) that may encourage more consolidation in the whole semi market to take advantage of that, not less. But again the only thing stepping in the way of that seems to be governments trying to keep national interests, like the blocking of NVidia buying ARM to pull in one of the big CPU players. Plus all their other IP that they may benefit from, like low power GPU designs or other accelerators ARM have designed.
- tm-guimaraes 3y ago
  At the end of the day, what nvidia does is just producing IP. All manufacture is by other companies. This means that nvidia capital is spend on testing/development infrastructure and creative labor. So, you don’t need monopoly breaking to handle nvidia if it keeps growing, but instead rethink IP laws. Testing infrastructure is less capital investment than production manufacture. (See ASML and TSMC beeing booked), and humans can be persuaded to work elsewhere. This means Nvidia cannot fall a sleep, even if they keep snowballing. In a few years a rival can always arrive, or current ones snag key people or have dev/test infra breakthrough, or IP law could change as its critics rise every year. Sure, if Nvidia keeps its good game it will keep on growing and get even bigger share, but if it doesn’t, it will happen what happened with intel, intel got greedy on its position, and the company got fat. As long as nvidia keeps its game, it’ll be good for customers even if they swallow more market share, as prices are always limited by the value business customers get from AI, and the investment needed for a competitor is not even close to infrastructure or resource extraction stuff like high end chip fabs, oil extraction, energy grids, telecom grids. Again, Nvidia does not produce any physical goods, only designs.
sph 3y ago
Are they motivated? Seems like a massive coincidence how the big two of the GPU world are cousins, and one has been having massive success on the CPU, the other on GPU/AI, and every attempt from both side to enter the other's niche has been pretty weak. AMD compute is nowhere compared to NVIDIA. NVIDIA wanted to buy ARM, has got its finger in RISC-V, but apart from that, they don't really care. To be fair AMD has done decent with GPUs, but never enough to dethrone NVIDIA, whose playbook for the past few gens is "just make everything bigger than last gen and increase the frequency." Surely AMD could have chosen the same lazy approach to surpass the 4090 only just, but instead they didn't, so it's still NV undefeated in its space because AMD forgot to squeeze the last 1% out of their card. The market is powerless if the competitors aren't really competing. Intel is the only chance, unless they manage to get their own Taiwanese CEO somehow related to Huang and Su.
- AlotOfReading 3y ago
  Leaving aside the weird conspiracy stuff, I don't know how you can see stuff like the nvlink C2C that makes Grace Hopper possible and think they went "just make everything bigger".
creer 3y ago
It's not like designing this kind of product is easy; or that Nvidia's designers are sitting idle; or that everybody else's design team is not busy building something else. There are in fact many competent design teams, chipping at their own business. There are in fact startups, also doing what they can (and probably not trying to go head on against the most productive competitor they can find.) And it has been reported countless times that some of the biggest customers of Nvidia are actually trying to design their own. If you want to point out a market with broken competition, this isn't it.
fulafel 3y ago
To play the free market advocate: The situation is created by artificial restrictions on free market (namely state enforced monopolies on "IPR", or as some call it, imaginary property).
mort96 3y ago
Aren't AMD's competing against nvidia's 80 series GPUs these days?

ericmay 3y ago

> This situation isn’t exactly a poster child for the Efficient Markets Hypothesis. I'm unsure why you're criticizing the Efficient Markets Hypothesis or even using it here, but you need to also analyze this with some time horizon because the market and marketplaces are not static.

willis936 3y ago
Their description could be used to describe the situation in 2023, 2022, 2021, 2020, 2019, 2018, 2017, and 2016.

lotsofpulp 3y ago

Efficient market hypothesis is unrelated to Nvidia’s competitors being unable to offer a competing product so far. https://www.investopedia.com/terms/e/efficientmarkethypothesis.asp https://www.investopedia.com/terms/e/efficientmarkethypothes... > The efficient market hypothesis (EMH), alternatively known as the efficient market theory, is a hypothesis that states that share prices reflect all information and consistent alpha generation is impossible.

ikrenji 3y ago
you know what he meant...
- jbc1 3y ago
  I honestly dont. I'm trying to think of what principle they could have meant with "This situation isn’t exactly a poster child for X" where X is any economic principle and coming up empty. Best I've got is "central planning". One firm being able to handily out perform others despite them also being both motivated and well capitalised lends itself pretty heavily towards markets being good, but I hardly think they were referring to "central planning" when they wrote "efficient market hypothesis". If it's so obvious to you that you're dropping ellipsis, care to clue us in?
  - mkaic 3y ago
    My impression was that they used "Efficient Market Hypothesis" to mean "the theory that free-market competition rapidly drives down prices and breaks up monopolies on its own".
    - sph 3y ago
      That theory is still valid, the issue is that the competition can't or won't even try to make a better product or a cheaper one. The rule only applies if there exist competing products in the first place. If there was any, the prices would go down as we have seen a billion times.
      - roughly 3y ago
        So, why’s that not happening, and what’s it imply for the rest of the theoretical framework?
        supazek 3y ago
        It’s not happening because 10,000 people who have more intimate knowledge of the business than you or I ever will have made decisions to best suit their current conditions. This isn’t an exception to the rule, you’re just looking at a small timeframe and a remarkably performant company. Why is it so bad for a company to be successful when they have provided so much back to society in the form of R&D? Besides, if I’m doing ML my boss has paid for the card anyway so the price doesn’t concern me.

kimixa 3y ago

Tech design and development seems, to me at least, pretty much naturally opposed to the "being kept in check with competition" state - as design isn't really a cost that scales per-unit, the company that sells slightly more can afford to put more into development at the same per-unit margin, which snowballs. At some point, they own the entire market - or enough that they functionally control it, and start leveraging this position. I'd argue we're seeing this from Nvidia right now. People talk about AMD being competition - but from most stats I've seen, they're ~10% of dGPU sales, with Nvidia being the other 90% (with new Intel offerings being pretty much noise now). That means that if they invest the same proportion into development, NVidia nearly have 10x the resources. It may be that tech companies like this would "naturally" form a monopoly without outside (IE government) interference, as the only reason that multiplier of development resources doesn't completely crush new entrants is rather extreme mismanagement, or a new segment is created where the design resource don't really cross over that much. I don't see anything like that happening in the short term, if anything there seems to be more opportunity for cross pollination of development within these corporations, as there's a fair bit of design similarities between various silicon (GPUs, CPUs, accelerators for the current ML techniques etc.) that may encourage more consolidation in the whole semi market to take advantage of that, not less. But again the only thing stepping in the way of that seems to be governments trying to keep national interests, like the blocking of NVidia buying ARM to pull in one of the big CPU players. Plus all their other IP that they may benefit from, like low power GPU designs or other accelerators ARM have designed.

tm-guimaraes 3y ago
At the end of the day, what nvidia does is just producing IP. All manufacture is by other companies. This means that nvidia capital is spend on testing/development infrastructure and creative labor. So, you don’t need monopoly breaking to handle nvidia if it keeps growing, but instead rethink IP laws. Testing infrastructure is less capital investment than production manufacture. (See ASML and TSMC beeing booked), and humans can be persuaded to work elsewhere. This means Nvidia cannot fall a sleep, even if they keep snowballing. In a few years a rival can always arrive, or current ones snag key people or have dev/test infra breakthrough, or IP law could change as its critics rise every year. Sure, if Nvidia keeps its good game it will keep on growing and get even bigger share, but if it doesn’t, it will happen what happened with intel, intel got greedy on its position, and the company got fat. As long as nvidia keeps its game, it’ll be good for customers even if they swallow more market share, as prices are always limited by the value business customers get from AI, and the investment needed for a competitor is not even close to infrastructure or resource extraction stuff like high end chip fabs, oil extraction, energy grids, telecom grids. Again, Nvidia does not produce any physical goods, only designs.

sph 3y ago

Are they motivated? Seems like a massive coincidence how the big two of the GPU world are cousins, and one has been having massive success on the CPU, the other on GPU/AI, and every attempt from both side to enter the other's niche has been pretty weak. AMD compute is nowhere compared to NVIDIA. NVIDIA wanted to buy ARM, has got its finger in RISC-V, but apart from that, they don't really care. To be fair AMD has done decent with GPUs, but never enough to dethrone NVIDIA, whose playbook for the past few gens is "just make everything bigger than last gen and increase the frequency." Surely AMD could have chosen the same lazy approach to surpass the 4090 only just, but instead they didn't, so it's still NV undefeated in its space because AMD forgot to squeeze the last 1% out of their card. The market is powerless if the competitors aren't really competing. Intel is the only chance, unless they manage to get their own Taiwanese CEO somehow related to Huang and Su.

AlotOfReading 3y ago
Leaving aside the weird conspiracy stuff, I don't know how you can see stuff like the nvlink C2C that makes Grace Hopper possible and think they went "just make everything bigger".

creer 3y ago

It's not like designing this kind of product is easy; or that Nvidia's designers are sitting idle; or that everybody else's design team is not busy building something else. There are in fact many competent design teams, chipping at their own business. There are in fact startups, also doing what they can (and probably not trying to go head on against the most productive competitor they can find.) And it has been reported countless times that some of the biggest customers of Nvidia are actually trying to design their own. If you want to point out a market with broken competition, this isn't it.

fulafel 3y ago

To play the free market advocate: The situation is created by artificial restrictions on free market (namely state enforced monopolies on "IPR", or as some call it, imaginary property).

mort96 3y ago

Aren't AMD's competing against nvidia's 80 series GPUs these days?