5 ms·

I get it, the service model always shines the brightest in the eye of the revenue calculator. But I have immediate skepticism they’ll be able to execute at a co

I get it, the service model always shines the brightest in the eye of the revenue calculator. But I have immediate skepticism they’ll be able to execute at a competitive level. Their core competency has always been manufacture and production, not service-based things. It’s a big rock to push up a tall hill.

neverokay 3y ago
Hey, if it doesn’t work out they can always return back to what they are, a consumer first company but now with world class hardware/software. AI graphics service that renders games in the cloud (photorealistic), concluding its epic journey of being an amazing graphics card company. Kinda cool when you think about it.
omnimus 3y ago
This doesnt seem to be true. They have been running Geforce Now for a long time and its one of the best gaming streaming services. It seems they are doing it in partnership with other regional companies but nobody says they cant use same partners. Running games with small latency seems more complicated than llms on cuda.
bboygravity 3y ago
Genuine question (I don't know much about cloud stuff): how is providing a cloud service/platform (at scale) even remotely as hard as designing, manufacturing and selling GPU's (including drivers and firmware) at massive scale? It feels like reading that setting up something like Facebook would be extremely challenging for a company like SpaceX.
- westhanover 3y ago
  [dead]
- komadori 3y ago
  I share your intuition, perhaps unfairly, that it's indeed not as hard in absolute terms. However, it certainly requires a different set of skills and organisational practices. Just because an organisation is extremely good at one thing doesn't mean it can easily apply that to another field. I would guess that SpaceX probably does have the talent on hand to throw together a Facebook clone, but equally I think they would struggle to actually complete with Facebook as a business at scale.
  - avidphantasm 3y ago
    Well, motivation would be an obvious thing lacking. People who want to work on rockets, I would guess, would find working on facebook to be a “boring” solved problem.
- throwaway2037 3y ago
  I like this question. You raise a very good point. Occam's Razor tells me the simplest explanation is "core competency". Running AI-SaaS is just a very different business from creating GPUs (including the required software ecosystem). As a counterpoint: Look at Microsoft. Traditionally, they have been pretty good at writing (and making money from) enterprise software, but not very good at hardware. (XBox is the one BIG exception, I can think of.)
  - fragmede 3y ago
    Except for the place where they're good at hardware, they're not good at hardware? I mean that's true, but a bit of a twist of logic, wouldn't you say?
  - zer0c00ler 3y ago
    Microsoft's mice and keyboards also were exceptionally good
- blagie 3y ago
  Genuine answer: Setting up Facebook WOULD be extremely challenging for a company like SpaceX. There's a reason Facebook is worth about 10x what SpaceX is worth, and most of that value doesn't come from the ability to build software. Facebook isn't even particularly good at building software. To give an example in a closer domain: Look at how long Google lost money on cloud services through 2022 (over $15B in loses), and now only makes money by creative accounting (bundling "cloud services" together versus breaking out GCP; Microsoft does something similar with Office 365 and Azure). Like many potential customers, I would not consider GCP because: 1) Google "support" is a buggy, automated algorithm which randomly thwacks customers on the head 2) Google randomly discontinues products 3) I've seen a half-dozen to a dozen instances where buying from Google was penny-wise and pound-foolish, and so have many other engineers I've worked with. Google's overall attitude is that I'm a statistic defined by my value to Google. Google can and will externalize costs onto me. That attitude is 100% right for adwords and search, which are defined by margins, but not for something like GCP. If I am going with a cloud service/platform, I'll go with Amazon, Microsoft, or just about anyone else, for that matter. That's not that Google is a bad company. Google actually did have the skill set to build the software and data centers for a very, very good cloud provider. It's just that Google's core competencies lie very far from providing reliable service to customers, customer support, or all the things which go into providing me with stability and business continuity. "Fixing" this would require a wholesale culture, value, and attitude change, and developing a core competency very far from what Google is good at. I put "fixing" in quotes since if you develop too many core competencies, you usually stop being good at any of them. Focus is important, and there's a reason many businesses spin out units outside of their domains of focus. If Google is able to become good at this, but in the process loses their edge in their current core competencies, that's probably a bad deal. FWIW: I haven't yet formed an opinion on NVidia's cloud strategy. However, their core competencies appear to be very much in the "hard" domains like silicon, digital design, machine learning rather than "soft" ones. Another relevant example for what can happen when hard skills are de-emphasized at engineering-driven companies is Boeing (if you've been following recent stories; if not, watch a documentary).
  - fragmede 3y ago
    Eh I mean Google moved GCP's revenue around because Microsoft was doing that to make Azure look bigger than GCP. If you can't beat em, join em. Google's got long term contracts with a lot of companies and the government, so GCP isn't going to shut down anytime soon. Their consumer products division has problems with product longevy, but we're not paying them corporation level money or signing serious contracts when buying a Stadia subscription. So it's just business. What I've heard is Azure is a pain in the ass, and things take three times as long to set up there, for some reason. There's also Oracle cloud but you hear way less about them. out there.
- michaelt 3y ago
  It's certainly possible to start new cloud providers - there are a bunch of smaller-scale VM providers. In the GPU cloud business there's companies like lambdalabs and runpod. But the fattest profit margins are in selling to big corporations. Big corporations who already have accounts with the likes of AWS. They already have billing set up, and AWS provides every cloud service under the sun. Container registry? Logging database? Secret management? Private networks? Complicated-ass role management? Single-sign-on integration? SOC2/PCI/HIPAA compliance? A costs explorer with a full API? Everything a growing bureaucracy could need. Getting your GPU VMs from your existing cloud provider is the path of least resistance. The smaller providers often compete by having lower prices - but competing on cost isn't generally a route to fat profit margins. And will folks at big corporations care that you're 30% cheaper, when they're not spending their own money? nvidia could definitely launch a focused cloud product, that competes on price - but would they be happy doing that? If they want to get into the business of offering everything from SAML logon integration to a managed labelling workforce with folks fluent in 8 languages - that could be a great deal of work.
xbmcuser 3y ago
They have been building partnerships with ISP's and service providers all over the world with their GeForce now game streaming service. They could continue and expand this by providing a similar backend for LLM services.

neverokay 3y ago

Hey, if it doesn’t work out they can always return back to what they are, a consumer first company but now with world class hardware/software. AI graphics service that renders games in the cloud (photorealistic), concluding its epic journey of being an amazing graphics card company. Kinda cool when you think about it.

omnimus 3y ago

This doesnt seem to be true. They have been running Geforce Now for a long time and its one of the best gaming streaming services. It seems they are doing it in partnership with other regional companies but nobody says they cant use same partners. Running games with small latency seems more complicated than llms on cuda.

bboygravity 3y ago

Genuine question (I don't know much about cloud stuff): how is providing a cloud service/platform (at scale) even remotely as hard as designing, manufacturing and selling GPU's (including drivers and firmware) at massive scale? It feels like reading that setting up something like Facebook would be extremely challenging for a company like SpaceX.

westhanover 3y ago
[dead]
komadori 3y ago
I share your intuition, perhaps unfairly, that it's indeed not as hard in absolute terms. However, it certainly requires a different set of skills and organisational practices. Just because an organisation is extremely good at one thing doesn't mean it can easily apply that to another field. I would guess that SpaceX probably does have the talent on hand to throw together a Facebook clone, but equally I think they would struggle to actually complete with Facebook as a business at scale.
- avidphantasm 3y ago
  Well, motivation would be an obvious thing lacking. People who want to work on rockets, I would guess, would find working on facebook to be a “boring” solved problem.
throwaway2037 3y ago
I like this question. You raise a very good point. Occam's Razor tells me the simplest explanation is "core competency". Running AI-SaaS is just a very different business from creating GPUs (including the required software ecosystem). As a counterpoint: Look at Microsoft. Traditionally, they have been pretty good at writing (and making money from) enterprise software, but not very good at hardware. (XBox is the one BIG exception, I can think of.)
- fragmede 3y ago
  Except for the place where they're good at hardware, they're not good at hardware? I mean that's true, but a bit of a twist of logic, wouldn't you say?
- zer0c00ler 3y ago
  Microsoft's mice and keyboards also were exceptionally good
blagie 3y ago
Genuine answer: Setting up Facebook WOULD be extremely challenging for a company like SpaceX. There's a reason Facebook is worth about 10x what SpaceX is worth, and most of that value doesn't come from the ability to build software. Facebook isn't even particularly good at building software. To give an example in a closer domain: Look at how long Google lost money on cloud services through 2022 (over $15B in loses), and now only makes money by creative accounting (bundling "cloud services" together versus breaking out GCP; Microsoft does something similar with Office 365 and Azure). Like many potential customers, I would not consider GCP because: 1) Google "support" is a buggy, automated algorithm which randomly thwacks customers on the head 2) Google randomly discontinues products 3) I've seen a half-dozen to a dozen instances where buying from Google was penny-wise and pound-foolish, and so have many other engineers I've worked with. Google's overall attitude is that I'm a statistic defined by my value to Google. Google can and will externalize costs onto me. That attitude is 100% right for adwords and search, which are defined by margins, but not for something like GCP. If I am going with a cloud service/platform, I'll go with Amazon, Microsoft, or just about anyone else, for that matter. That's not that Google is a bad company. Google actually did have the skill set to build the software and data centers for a very, very good cloud provider. It's just that Google's core competencies lie very far from providing reliable service to customers, customer support, or all the things which go into providing me with stability and business continuity. "Fixing" this would require a wholesale culture, value, and attitude change, and developing a core competency very far from what Google is good at. I put "fixing" in quotes since if you develop too many core competencies, you usually stop being good at any of them. Focus is important, and there's a reason many businesses spin out units outside of their domains of focus. If Google is able to become good at this, but in the process loses their edge in their current core competencies, that's probably a bad deal. FWIW: I haven't yet formed an opinion on NVidia's cloud strategy. However, their core competencies appear to be very much in the "hard" domains like silicon, digital design, machine learning rather than "soft" ones. Another relevant example for what can happen when hard skills are de-emphasized at engineering-driven companies is Boeing (if you've been following recent stories; if not, watch a documentary).
- fragmede 3y ago
  Eh I mean Google moved GCP's revenue around because Microsoft was doing that to make Azure look bigger than GCP. If you can't beat em, join em. Google's got long term contracts with a lot of companies and the government, so GCP isn't going to shut down anytime soon. Their consumer products division has problems with product longevy, but we're not paying them corporation level money or signing serious contracts when buying a Stadia subscription. So it's just business. What I've heard is Azure is a pain in the ass, and things take three times as long to set up there, for some reason. There's also Oracle cloud but you hear way less about them. out there.
michaelt 3y ago
It's certainly possible to start new cloud providers - there are a bunch of smaller-scale VM providers. In the GPU cloud business there's companies like lambdalabs and runpod. But the fattest profit margins are in selling to big corporations. Big corporations who already have accounts with the likes of AWS. They already have billing set up, and AWS provides every cloud service under the sun. Container registry? Logging database? Secret management? Private networks? Complicated-ass role management? Single-sign-on integration? SOC2/PCI/HIPAA compliance? A costs explorer with a full API? Everything a growing bureaucracy could need. Getting your GPU VMs from your existing cloud provider is the path of least resistance. The smaller providers often compete by having lower prices - but competing on cost isn't generally a route to fat profit margins. And will folks at big corporations care that you're 30% cheaper, when they're not spending their own money? nvidia could definitely launch a focused cloud product, that competes on price - but would they be happy doing that? If they want to get into the business of offering everything from SAML logon integration to a managed labelling workforce with folks fluent in 8 languages - that could be a great deal of work.

xbmcuser 3y ago

They have been building partnerships with ISP's and service providers all over the world with their GeForce now game streaming service. They could continue and expand this by providing a similar backend for LLM services.