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> It certainly feels like the AI bubble is popping. Objectively, no it doesn't. Even if you think it's a bubble, then the bubble is just growing. There are zer

> It certainly feels like the AI bubble is popping. Objectively, no it doesn't. Even if you think it's a bubble, then the bubble is just growing. There are zero signs of anything popping yet. Company valuations are only increasing. > Nvidia as the most valuable company in the world? It makes sense when you look at the financials. It's like back in 1800's when railroads were the new thing, and imagine there were only one company that knew how to make locomotives, while everything else had multiple suppliers. It would have been the most valuable company as well. Nvidia is in an extremely enviable situation where they're simply the only company that makes a product that is in extreme demand. And for various reasons, no other companies appear to be able to make and deliver a substitute -- not yet and seemingly not in the near future. So they're able to produce an extreme level of profit, which shows no signs of stopping anytime soon, and their market valuation reflects that accurately. Remember, high market valuation isn't a reflection of expected future revenue or sales -- it's a reflection of expected future profit. And Nvidia is raking in crazy profits because nobody else is effectively competing with them.

pjc50 2y ago
The Standard Oil of our time? AMD ""just"" need to fix their software API ecosystem. Developers, developers, developers. Unfortunately I don't think they can do that even if promised a trillion dollar stock valuation. Not because it's technically difficult, either.
thepasswordis 2y ago
It objectively doesn’t feel like then bubble is popping?
iknownthing 2y ago
The locomotive analogy doesn't quite fit. The customers of the locomotive company would buy the locomotives and then use them to profit. Are Nvidia's customers making a profit from the billions they are spending on GPUs? I don't think so, at least not yet.
- throwup238 2y ago
  > Are Nvidia's customers making a profit from the billions they are spending on GPUs? I don't think so, at least not yet. Yes. NVIDIA's customers are mostly the cloud providers buying tens of thousands of machines each. The latest 8xH100 pods cost almost $400,000 so no one but Facebook and a few other tech giants can afford to buy tons of them without having customers lined up and ready to rent them. If you look at AWS's reserve pricing, a one year contract costs more than the hardware would if you bought it up front. The on-demand pricing is even crazier, if you're lucky enough to find some capacity. NVIDIA's customers are absolutely printing money, it's their customers' customers that are paying for it.
  - iknownthing 2y ago
    Sure but those are just middle-men. What about the cloud providers customers? are they making a profit? Seems like a game of hot potato.
- deleted 2y ago
  [deleted]
- crazygringo 2y ago
  Plenty of railroads went bust -- it was a time of extreme speculation. All that matters is that people think the industry will turn out to be profitable and sustainable overall, once we figure out which products and features work and which don't. There's no reason whatsoever to think AI doesn't fall in that category.
  - iknownthing 2y ago
    I'm not a railroad expert but I think AI involves much more speculation. They knew what a locomotive could do and what problem it solved. We can't really say that with AI.
    - rsynnott 2y ago
      A locomotive was an _input_. Like a GPU, arguably. They _didn't_ really know what a railway could do, at the time; a lot of speculative railway projects were terribly ill-conceived and could never have made economic sense (or in extreme cases, worked at all, at least with the tech available; the first attempt at a Channel Tunnel was in the late 19th century, for instance).
JohnFen 2y ago
I think it's more like the San Francisco gold rush. The gold prospectors didn't make a lot of money. The people who made bank were the ones selling goods and services to the prospectors. Selling the shovels is more profitable, and has the bonus of not being dependent on whether or not your customers actually find gold.
- iknownthing 2y ago
  But if enough prospectors fail to find gold the demand for shovels will eventually go down.
  - JohnFen 2y ago
    Yep, and the shovel-sellers cry all the way to the bank.
- mvid 2y ago
  It feels like at the point in software hype bubbles, everyone is using this metaphor, and is trying to sell wholesale shovels to shovel salesmen. Kind of like an MLM. NVIDIA, specifically, doesn’t really make a compelling product, but is trying to make it seem like their tools can eventually make a compelling product, so build your platform on NVIDIA so that you can sell the opportunity that allows compelling products…
rsynnott 2y ago
> Objectively, no it doesn't. Even if you think it's a bubble, then the bubble is just growing. There are zero signs of anything popping yet. Ever seen a bubble pop? It doesn't contract and then pop, usually. A hole develops, and almost immediately no more bubble. If you watch very closely, you might see signs of the end a fraction of a second before it vanishes. Like, this is why these phenomena are called bubbles; they grow and grow and grow, and then bang. > It's like back in 1800's when railroads were the new thing, and imagine there were only one company that knew how to make locomotives, while everything else had multiple suppliers. I, er, feel obliged to mention that that was a particularly notorious bubble. And, like, yes, if you're selling shovels in a gold rush, that's a good place to be, no question of that. But it doesn't say anything in particular about the long-term viability of the gold rush.
- crazygringo 2y ago
  Right, you seem like you're mostly agreeing with me. There's no "it feels like it's popping". The bubble is just continuing to grow. When it pops, you'll know it. (Although to be fair, it's not instant. It's often a jagged decline that takes weeks or even months. You never know when you've hit the bottom, when it's "fully popped". So the metaphor with actual physical bubbles is not perfect. But in hindsight you can often look back to a day of massive selling that "started" it.)
- paulmd 2y ago
  >> Objectively, no it doesn't. Even if you think it's a bubble, then the bubble is just growing. There are zero signs of anything popping yet. > Ever seen a bubble pop? It doesn't contract and then pop, usually. A hole develops, and almost immediately no more bubble. If you watch very closely, you might see signs of the end a fraction of a second before it vanishes. Well, if that’s the case then why is the OP arguing that the bubble is popping based on feelings and vibes instead of objective data caused by the rapid popping of the bubble that you postulate? Literally you’re saying the bubble is going to pop so fast that it’s noticeable to everyone and objectively undeniable in fact, the numbers are going to show it, and that’s why… grandparent’s vibes are evidence that it’s happening, quickly and indisputably, despite the failure of the numbers to show it? Incoherent take.

pjc50 2y ago

The Standard Oil of our time? AMD ""just"" need to fix their software API ecosystem. Developers, developers, developers. Unfortunately I don't think they can do that even if promised a trillion dollar stock valuation. Not because it's technically difficult, either.

thepasswordis 2y ago

It objectively doesn’t feel like then bubble is popping?

iknownthing 2y ago

The locomotive analogy doesn't quite fit. The customers of the locomotive company would buy the locomotives and then use them to profit. Are Nvidia's customers making a profit from the billions they are spending on GPUs? I don't think so, at least not yet.

throwup238 2y ago
> Are Nvidia's customers making a profit from the billions they are spending on GPUs? I don't think so, at least not yet. Yes. NVIDIA's customers are mostly the cloud providers buying tens of thousands of machines each. The latest 8xH100 pods cost almost $400,000 so no one but Facebook and a few other tech giants can afford to buy tons of them without having customers lined up and ready to rent them. If you look at AWS's reserve pricing, a one year contract costs more than the hardware would if you bought it up front. The on-demand pricing is even crazier, if you're lucky enough to find some capacity. NVIDIA's customers are absolutely printing money, it's their customers' customers that are paying for it.
- iknownthing 2y ago
  Sure but those are just middle-men. What about the cloud providers customers? are they making a profit? Seems like a game of hot potato.
deleted 2y ago
[deleted]
crazygringo 2y ago
Plenty of railroads went bust -- it was a time of extreme speculation. All that matters is that people think the industry will turn out to be profitable and sustainable overall, once we figure out which products and features work and which don't. There's no reason whatsoever to think AI doesn't fall in that category.
- iknownthing 2y ago
  I'm not a railroad expert but I think AI involves much more speculation. They knew what a locomotive could do and what problem it solved. We can't really say that with AI.
  - rsynnott 2y ago
    A locomotive was an _input_. Like a GPU, arguably. They _didn't_ really know what a railway could do, at the time; a lot of speculative railway projects were terribly ill-conceived and could never have made economic sense (or in extreme cases, worked at all, at least with the tech available; the first attempt at a Channel Tunnel was in the late 19th century, for instance).

JohnFen 2y ago

I think it's more like the San Francisco gold rush. The gold prospectors didn't make a lot of money. The people who made bank were the ones selling goods and services to the prospectors. Selling the shovels is more profitable, and has the bonus of not being dependent on whether or not your customers actually find gold.

iknownthing 2y ago
But if enough prospectors fail to find gold the demand for shovels will eventually go down.
- JohnFen 2y ago
  Yep, and the shovel-sellers cry all the way to the bank.
mvid 2y ago
It feels like at the point in software hype bubbles, everyone is using this metaphor, and is trying to sell wholesale shovels to shovel salesmen. Kind of like an MLM. NVIDIA, specifically, doesn’t really make a compelling product, but is trying to make it seem like their tools can eventually make a compelling product, so build your platform on NVIDIA so that you can sell the opportunity that allows compelling products…

rsynnott 2y ago

> Objectively, no it doesn't. Even if you think it's a bubble, then the bubble is just growing. There are zero signs of anything popping yet. Ever seen a bubble pop? It doesn't contract and then pop, usually. A hole develops, and almost immediately no more bubble. If you watch very closely, you might see signs of the end a fraction of a second before it vanishes. Like, this is why these phenomena are called bubbles; they grow and grow and grow, and then bang. > It's like back in 1800's when railroads were the new thing, and imagine there were only one company that knew how to make locomotives, while everything else had multiple suppliers. I, er, feel obliged to mention that that was a particularly notorious bubble. And, like, yes, if you're selling shovels in a gold rush, that's a good place to be, no question of that. But it doesn't say anything in particular about the long-term viability of the gold rush.

crazygringo 2y ago
Right, you seem like you're mostly agreeing with me. There's no "it feels like it's popping". The bubble is just continuing to grow. When it pops, you'll know it. (Although to be fair, it's not instant. It's often a jagged decline that takes weeks or even months. You never know when you've hit the bottom, when it's "fully popped". So the metaphor with actual physical bubbles is not perfect. But in hindsight you can often look back to a day of massive selling that "started" it.)
paulmd 2y ago
>> Objectively, no it doesn't. Even if you think it's a bubble, then the bubble is just growing. There are zero signs of anything popping yet. > Ever seen a bubble pop? It doesn't contract and then pop, usually. A hole develops, and almost immediately no more bubble. If you watch very closely, you might see signs of the end a fraction of a second before it vanishes. Well, if that’s the case then why is the OP arguing that the bubble is popping based on feelings and vibes instead of objective data caused by the rapid popping of the bubble that you postulate? Literally you’re saying the bubble is going to pop so fast that it’s noticeable to everyone and objectively undeniable in fact, the numbers are going to show it, and that’s why… grandparent’s vibes are evidence that it’s happening, quickly and indisputably, despite the failure of the numbers to show it? Incoherent take.