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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 customer

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
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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).

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

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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).