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It's maybe reasonable to consider this an absurd bubble surrounding AI, but it is a demand-driven phenomenon from the point of view of Nvidia. Right now, you c
by OtherShrezzing 2y ago
It's maybe reasonable to consider this an absurd bubble surrounding AI, but it is a demand-driven phenomenon from the point of view of Nvidia.
Right now, you can listen to CEOs of Nvidia's biggest clients saying things like "the current bottleneck is the bureaucracy around building nuclear powerplants to provide energy to our datacenters". The Saudi investment fund is shopping around for AI ventures to throw hundreds of billions at. Altman is suggesting he'd be able to utilise a multi-trillion dollar raise. These are big indicators that the demand for Nvidia's products will remain strong for some time to come.
The amount of money that is aimed at AI, which ultimately a large portion of will land in Nvidia's bank account, is staggering.
- mrbungie 2y agoDemand driven mainly by hyperscalers. And hyperscalers (MSFT as an example) are aggressively forcing customers (using tactics such a latency/performance compromises, one example being completions in 30 secs vs 1.5 min for the same prompt) to move from a Pay2Go schemes to buying Provisioned Throughput Units with minimum commitments in the order of 16-32k USD monthly with big penalties if you don't forecast your own demand with enough accuracy. Those half-assed offerings may be "interesting" to enterprise customers, but the intermediate/final consumer demand is not going to be in the scale where you think everyone and their grandma are going to use AI (as NVDA investors want to believe), the value is just not there. That should say enough about the confidence in the capacity of such giant investments in GPUs to bring revenue in the short term future. They're not selling surplus capacity (from their own products as Copilot), they're hoping to sell snake oil directly to customers.