3 ms·

Imagine the depreciation costs involved in this... Huge money sink.

talldayo 2y ago
To the contrary, this might be a good enough generation to hang your hat on for multiple reasons: - TSMC is fickle. 5nm was a one-customer node for a few years, and Blackwell necessitated a large investment to get Nvidia on the latest TSMC tech. Die shrinks are getting expensive and less-certain; buying now at least guarantees you good software support on top-class hardware. - The geopolitical situation threatening Taiwan is dire enough to force the hand of anyone that wants to guarantee GPU availability. Buying GPUs now when they're highly-available is a hedged-bet against a worse GPU shortage than ever seen before in the face of unprecedented territorial aggression. - ...it's Nvidia. If the past is anything to go off of, these GPUs will get software support for a decade and be worth a pretty penny on the resale market. Worst case scenario, AI is outlawed by the next president and Meta pivots to Bitcoin mining or something. Hell, if they outlaw AI fast enough they could probably sell their Nvidia hardware at a profit.
- babyshake 2y ago
  > Buying GPUs now when they're highly-available is a hedged-bet against a worse GPU shortage than ever seen before in the face of unprecedented territorial aggression. This actually makes it occur to me that if you've been hoarding a huge amount of GPUs, it may actually be in your interest to then encourage the events that would lead to a subsequent GPU shortage.
- null_investor 2y ago
  Nvidia has the best hardware and software for deeplearning, but current use for it, and this huge demand was driven mostly about LLMs. The workload done by LLMs can mostly be done by different hardware, that are more ASIC-like and efficient, see Grok for example. If there aren't enough deeplearning uses for Nvidia hardware, meanwhile the big techs might not recognize on its balance sheet, its ability to generate money down the road will be much smaller. I'd be willing to bet that in 10 years, H100s will be worth 0. It's a huge writedown. I'm sure we'll do much more deep learning down the road, but the demand recently for this hardware has been too big, mostly because of hype, this will definitely have an impact on depreciation once the hypes fade off. Even Meta, when they figure out they can do their own custom hardware to do their Instagram recommendations, they will talk directly to TSMC. The CAPEX on this is huge, so are the savings in case they find out a way to use custom hardware. Google went through this route because the found out themselves that it's worth having their own hardware as they do a lot of AI. Given this, I believe that it's a huge risk to have H100s at the moment, so does Blackwell. It's a risky asset.
  - mamonster 2y ago
    >I'd be willing to bet that in 10 years, H100s will be worth 0. It's a huge writedown. There wouldn't be a writedown simply because no one is setting 10 years as the useful life for accounting purposes. Coreweave was about 5 years IIRC.

To the contrary, this might be a good enough generation to hang your hat on for multiple reasons: - TSMC is fickle. 5nm was a one-customer node for a few years, and Blackwell necessitated a large investment to get Nvidia on the latest TSMC tech. Die shrinks are getting expensive and less-certain; buying now at least guarantees you good software support on top-class hardware. - The geopolitical situation threatening Taiwan is dire enough to force the hand of anyone that wants to guarantee GPU availability. Buying GPUs now when they're highly-available is a hedged-bet against a worse GPU shortage than ever seen before in the face of unprecedented territorial aggression. - ...it's Nvidia. If the past is anything to go off of, these GPUs will get software support for a decade and be worth a pretty penny on the resale market. Worst case scenario, AI is outlawed by the next president and Meta pivots to Bitcoin mining or something. Hell, if they outlaw AI fast enough they could probably sell their Nvidia hardware at a profit.

babyshake 2y ago
> Buying GPUs now when they're highly-available is a hedged-bet against a worse GPU shortage than ever seen before in the face of unprecedented territorial aggression. This actually makes it occur to me that if you've been hoarding a huge amount of GPUs, it may actually be in your interest to then encourage the events that would lead to a subsequent GPU shortage.
null_investor 2y ago
Nvidia has the best hardware and software for deeplearning, but current use for it, and this huge demand was driven mostly about LLMs. The workload done by LLMs can mostly be done by different hardware, that are more ASIC-like and efficient, see Grok for example. If there aren't enough deeplearning uses for Nvidia hardware, meanwhile the big techs might not recognize on its balance sheet, its ability to generate money down the road will be much smaller. I'd be willing to bet that in 10 years, H100s will be worth 0. It's a huge writedown. I'm sure we'll do much more deep learning down the road, but the demand recently for this hardware has been too big, mostly because of hype, this will definitely have an impact on depreciation once the hypes fade off. Even Meta, when they figure out they can do their own custom hardware to do their Instagram recommendations, they will talk directly to TSMC. The CAPEX on this is huge, so are the savings in case they find out a way to use custom hardware. Google went through this route because the found out themselves that it's worth having their own hardware as they do a lot of AI. Given this, I believe that it's a huge risk to have H100s at the moment, so does Blackwell. It's a risky asset.
- mamonster 2y ago
  >I'd be willing to bet that in 10 years, H100s will be worth 0. It's a huge writedown. There wouldn't be a writedown simply because no one is setting 10 years as the useful life for accounting purposes. Coreweave was about 5 years IIRC.