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Hopefully this means someone will enter the market and take them out. >50% profit margins are obscene and a product of rent-seeky behaviour on their monopolisat

Hopefully this means someone will enter the market and take them out. >50% profit margins are obscene and a product of rent-seeky behaviour on their monopolisation of the gfx compute market.

tlivolsi 3y ago
Nvidia has a "monopoly" on the graphics card market because of Cuda. AMD's hardware is catching up, but until there is a Cuda alternative, Nvidia will continue to dominate.
- mjburgess 3y ago
  Yip, that's the explanation. Making 11bn on a 19bn revenue is, prima fascie, evidence of a very uncompetitive market where this player has some extraordinary anti-competitive market power. Hopefully competitors can take this boom and use it to bring this down. I'm downvoted no doubt by double-thinkers who think 2x on the cost of a graphics card is a bad thing, and would prefer not to pay it. nvidia in the rent-seeker position over all graphics compute is a terrible position to be in, for everyone but a handful of nvidia shareholders
  - incrudible 3y ago
    There is a hype going on now, the relevant player simply can not afford not to pay that premium. The opportunity cost is too big. As things consolidate, those margins will come down. First world problems.
  - aunty_helen 3y ago
    Cuda isn’t rent seeking bro. They developed a technology and people are willing to pay for it. It’s called innovation. For them, this has been a 10+ year long bet that’s now paying off extraordinarily. Check your privilege.
    - mjburgess 3y ago
      Sure, they created proprietary CPUs and invented a proprietary language to run on them; prevented as much open source or cross-platform work as possible; and cornered the AI market. Now, they're extracting 50% of what people are paying in profit. Great! And, what, you're their defender? I hope you have shares, or else, you've been hoodwinked. In the "free" market, be assured, you're the loser not the winner. /We/ only win when there's sufficient competition, and clearly, there isnt. It is not in your interest for an nvidia ransom to exist on all AI tech.
brianwawok 3y ago
Barrier to entry is insane. Their only competition ATI is also trying to fight Intel in the CPU single vendor market. And I don’t think they are even trying that hard in gfx.
bko 3y ago
That's not what rent seeking is. Rent seeking is manipulating public policy or conditions to maximize profits. That would be like them calling for regulation of AI and gpus so that only they can produce them because "ai safety", which I don't believe they're doing They developed an expertise and they are temporarily profiting extraordinarily from it. They're practically the only player for now but it's different from a harmful monopoly enforced by force from the state
- mjburgess 3y ago
  I think we've seen over the last 20 years that the 80s definition of undue market power is unfit for purpose in an era where state-granted IP monopolies (copyright, patents, etc.) and network effects (app-stores and other two-sided markets) create novel sorts of anti-competitive market power. It is highly likely these state granted rights over IP are part of nvidia's market power. Prima facie, we should be suspicious that nvidia is able to keep $11bn out of $19bn -- why is no investor on the planet not chasing after at least half that? In the end what we want is a free market where competition drives down prices by limiting profits, and where the power of capitalists is limited by their need to compete, and where the power of labour is improved likewise (and so on). Given just why we even have a free market in the first place, companies like nvidia cropping up should be a cause for concern. My hope is, exactly, that this is a transitiory effect where they're able to exploit their market position only in the very short term.
paulmd 3y ago
> 50% profit margins are obscene and a product of rent-seeky behaviour on their monopolisation of the gfx compute market. For a sense of perspective, Nvidia’s operating margins as a company (including enterprise) are normally about the same as AMD’s gaming division (ie Radeon group). And Radeon is not exactly rolling in the cash… This includes Ada, which had lower operating margins than any year since about 2012. https://i.imgur.com/KP6fClJ.png https://i.imgur.com/KP6fClJ.png They are making bank right now because they have a good product that has touched off a computing revolution. Just the same way AMD found themselves in a shower of money for having epyc ready to go at the moment intel stalled out on 10nm. This is transitory and won’t be a competitionless shower of money forever, but it will evolve into another large segment where nvidia is a player. But it's also an extremely deserved win for NVIDIA being in the right place at the right time (and that's hugely underselling NVIDIA's place in starting that revolution). It’s super weird that people somehow begrudge nvidia their win from what is clearly a 20+ year bet on programmable shaders, gpgpu, and software ecosystem. Jensen bet the company over and over on shit that everyone else at the time said was lunacy, and utterly deserves the success he's earned. It is hard to overstate how much the "NVIDIA is a software company now" was mocked in the 2009-2014 era, it was a joke and a meme on tech forums in the same way "just buy it" or "the more you buy the more you save" is today. I'm sure there are some real choice SemiAccurate articles you can mine for laughs, Charlie is always great at that. A large number of people cannot emotionally process the fact that electronics are just getting more expensive in the post-Moore's Law era and that GPUs are particularly exposed to this due to the nature of the product. But nobody else in the industry can do any better - MCM was a bust for AMD at driving down GPU costs, Intel is running negative margins to grow the product, etc. Even AMD is telling you the same thing - product costs are up, R&D costs are up, and the price anchors you knew in 2012 aren't going to hold forever. (For that matter, there's no more $85 1600AF or $160 3600 deals anymore either - the era of "get last year's processor for, idk, does 75% off sound fair?" is completely dead in the CPU world too. And ASPs are up too - "mainstream" CPU is $300-350 now too. But people just don't have the narrative fed to them on CPUs, there is nobody telling them to be mad about it, so they aren't...) https://www.pcgamer.com/amd-moores-law-aint-dead-its-just-a-whole-lot-more-expensive/ https://www.pcgamer.com/amd-moores-law-aint-dead-its-just-a-... https://www.tomshardware.com/tech-industry/newer-chips-are-rapidly-becoming-far-more-expensive-tsmcs-average-wafer-price-jumped-22-in-one-year-and-nearly-all-semiconductor-industry-growth-now-comes-from-more-expensive-products https://www.tomshardware.com/tech-industry/newer-chips-are-r... This is actually the precise leap that Jensen made that internet commentators pooh-pooh'd: he has always understood the impact that Moore's Law has on his business, he is only there to find efficient ways to shovel out the transistors that TSMC mines for him. And if the treadmill of free transistors stops (or slows to a crawl) then where do the product gains come from? It has to be software, and accelerators, and other stuff. DLSS, for example. That's another leap where he was 10+ years ahead of the public, and was in a position of having to tell people what they wanted, because they didn't know it themselves yet. https://www.youtube.com/watch?v=Xn1EsFe7snQ&t=1034s https://www.youtube.com/watch?v=Xn1EsFe7snQ&t=1034s

Hopefully this means someone will enter the market and take them out. >50% profit margins are obscene and a product of rent-seeky behaviour on their monopolisation of the gfx compute market.

tlivolsi 3y ago

Nvidia has a "monopoly" on the graphics card market because of Cuda. AMD's hardware is catching up, but until there is a Cuda alternative, Nvidia will continue to dominate.

mjburgess 3y ago
Yip, that's the explanation. Making 11bn on a 19bn revenue is, prima fascie, evidence of a very uncompetitive market where this player has some extraordinary anti-competitive market power. Hopefully competitors can take this boom and use it to bring this down. I'm downvoted no doubt by double-thinkers who think 2x on the cost of a graphics card is a bad thing, and would prefer not to pay it. nvidia in the rent-seeker position over all graphics compute is a terrible position to be in, for everyone but a handful of nvidia shareholders
- incrudible 3y ago
  There is a hype going on now, the relevant player simply can not afford not to pay that premium. The opportunity cost is too big. As things consolidate, those margins will come down. First world problems.
- aunty_helen 3y ago
  Cuda isn’t rent seeking bro. They developed a technology and people are willing to pay for it. It’s called innovation. For them, this has been a 10+ year long bet that’s now paying off extraordinarily. Check your privilege.
  - mjburgess 3y ago
    Sure, they created proprietary CPUs and invented a proprietary language to run on them; prevented as much open source or cross-platform work as possible; and cornered the AI market. Now, they're extracting 50% of what people are paying in profit. Great! And, what, you're their defender? I hope you have shares, or else, you've been hoodwinked. In the "free" market, be assured, you're the loser not the winner. /We/ only win when there's sufficient competition, and clearly, there isnt. It is not in your interest for an nvidia ransom to exist on all AI tech.

brianwawok 3y ago

Barrier to entry is insane. Their only competition ATI is also trying to fight Intel in the CPU single vendor market. And I don’t think they are even trying that hard in gfx.

bko 3y ago

That's not what rent seeking is. Rent seeking is manipulating public policy or conditions to maximize profits. That would be like them calling for regulation of AI and gpus so that only they can produce them because "ai safety", which I don't believe they're doing They developed an expertise and they are temporarily profiting extraordinarily from it. They're practically the only player for now but it's different from a harmful monopoly enforced by force from the state

mjburgess 3y ago
I think we've seen over the last 20 years that the 80s definition of undue market power is unfit for purpose in an era where state-granted IP monopolies (copyright, patents, etc.) and network effects (app-stores and other two-sided markets) create novel sorts of anti-competitive market power. It is highly likely these state granted rights over IP are part of nvidia's market power. Prima facie, we should be suspicious that nvidia is able to keep $11bn out of $19bn -- why is no investor on the planet not chasing after at least half that? In the end what we want is a free market where competition drives down prices by limiting profits, and where the power of capitalists is limited by their need to compete, and where the power of labour is improved likewise (and so on). Given just why we even have a free market in the first place, companies like nvidia cropping up should be a cause for concern. My hope is, exactly, that this is a transitiory effect where they're able to exploit their market position only in the very short term.

paulmd 3y ago

> 50% profit margins are obscene and a product of rent-seeky behaviour on their monopolisation of the gfx compute market. For a sense of perspective, Nvidia’s operating margins as a company (including enterprise) are normally about the same as AMD’s gaming division (ie Radeon group). And Radeon is not exactly rolling in the cash… This includes Ada, which had lower operating margins than any year since about 2012. https://i.imgur.com/KP6fClJ.png https://i.imgur.com/KP6fClJ.png They are making bank right now because they have a good product that has touched off a computing revolution. Just the same way AMD found themselves in a shower of money for having epyc ready to go at the moment intel stalled out on 10nm. This is transitory and won’t be a competitionless shower of money forever, but it will evolve into another large segment where nvidia is a player. But it's also an extremely deserved win for NVIDIA being in the right place at the right time (and that's hugely underselling NVIDIA's place in starting that revolution). It’s super weird that people somehow begrudge nvidia their win from what is clearly a 20+ year bet on programmable shaders, gpgpu, and software ecosystem. Jensen bet the company over and over on shit that everyone else at the time said was lunacy, and utterly deserves the success he's earned. It is hard to overstate how much the "NVIDIA is a software company now" was mocked in the 2009-2014 era, it was a joke and a meme on tech forums in the same way "just buy it" or "the more you buy the more you save" is today. I'm sure there are some real choice SemiAccurate articles you can mine for laughs, Charlie is always great at that. A large number of people cannot emotionally process the fact that electronics are just getting more expensive in the post-Moore's Law era and that GPUs are particularly exposed to this due to the nature of the product. But nobody else in the industry can do any better - MCM was a bust for AMD at driving down GPU costs, Intel is running negative margins to grow the product, etc. Even AMD is telling you the same thing - product costs are up, R&D costs are up, and the price anchors you knew in 2012 aren't going to hold forever. (For that matter, there's no more $85 1600AF or $160 3600 deals anymore either - the era of "get last year's processor for, idk, does 75% off sound fair?" is completely dead in the CPU world too. And ASPs are up too - "mainstream" CPU is $300-350 now too. But people just don't have the narrative fed to them on CPUs, there is nobody telling them to be mad about it, so they aren't...) https://www.pcgamer.com/amd-moores-law-aint-dead-its-just-a-whole-lot-more-expensive/ https://www.pcgamer.com/amd-moores-law-aint-dead-its-just-a-... https://www.tomshardware.com/tech-industry/newer-chips-are-rapidly-becoming-far-more-expensive-tsmcs-average-wafer-price-jumped-22-in-one-year-and-nearly-all-semiconductor-industry-growth-now-comes-from-more-expensive-products https://www.tomshardware.com/tech-industry/newer-chips-are-r... This is actually the precise leap that Jensen made that internet commentators pooh-pooh'd: he has always understood the impact that Moore's Law has on his business, he is only there to find efficient ways to shovel out the transistors that TSMC mines for him. And if the treadmill of free transistors stops (or slows to a crawl) then where do the product gains come from? It has to be software, and accelerators, and other stuff. DLSS, for example. That's another leap where he was 10+ years ahead of the public, and was in a position of having to tell people what they wanted, because they didn't know it themselves yet. https://www.youtube.com/watch?v=Xn1EsFe7snQ&t=1034s https://www.youtube.com/watch?v=Xn1EsFe7snQ&t=1034s