3 ms·

I’m not questioning Nvidia’s moat in gaming. But that’s pretty much irrelevant to its valuation. And sure, for small scale and research activities Nvidia makes

I’m not questioning Nvidia’s moat in gaming. But that’s pretty much irrelevant to its valuation. And sure, for small scale and research activities Nvidia makes sense, even for the long term. But that’s not where the money is at, either. The only way Nvidia can sustain its valuation is if it can win in the large scale production AI market long term, and that market turns out to be huge. I don’t really see how that can happen. As soon as NN architectures are stable over the economic lifetime of a chip custom ASICs will make so much more sense: 10x more performance and no Nvidia tax. It’s already happening [1]. 1. https://www.etched.com/ https://www.etched.com/

aurareturn 2y ago
Let's say the Transformer market is 10x bigger in 2035 than in 2025. Nvidia maintains 40% of the entire market, down from the 90% today. They'd still be vastly bigger in 2035 than in 2025. >10x more performance and no Nvidia tax. It’s already happening Nvidia can do the same though. The moat isn't in inference. It's in training.
- bjornsing 2y ago
  > Let's say the Transformer market is 10x bigger in 2035 than in 2025. Nvidia maintains 40% of the entire market, down from the 90% today. They'd still be vastly bigger in 2035 than in 2025. Sure, but they currently have a P/E ratio of 67… So being vastly bigger in 2035 is not necessarily enough. They have to be enormously bigger and still hugely profitable. > Nvidia can do the same though. Yes, but then they don’t have that moat. > The moat isn't in inference. It's in training. I’d say it’s even narrower than that: Nvidias AI moat is in training novel / unforeseen NN architectures. Will that be a meaningful moat in 2035?
  - aurareturn 2y ago
    It's really hard to tell. Just all speculative. If you say you don't believe Nvidia is worth $3.5t, and you want to short Nvidia, good luck. But at the same time, I can see why some people don't think Nvidia can't sustain itself. But it all comes down to how good the GPT5 class of LLMs are for the next 2 years.
    - bjornsing 2y ago
      > But it all comes down to how good the GPT5 class of LLMs are for the next 2 years. I guess what I’m saying is that it really doesn’t. But in order to make money on shorts you not only have to be right, you also have to get the timing right. That’s a lot more difficult…

aurareturn 2y ago

Let's say the Transformer market is 10x bigger in 2035 than in 2025. Nvidia maintains 40% of the entire market, down from the 90% today. They'd still be vastly bigger in 2035 than in 2025. >10x more performance and no Nvidia tax. It’s already happening Nvidia can do the same though. The moat isn't in inference. It's in training.

bjornsing 2y ago
> Let's say the Transformer market is 10x bigger in 2035 than in 2025. Nvidia maintains 40% of the entire market, down from the 90% today. They'd still be vastly bigger in 2035 than in 2025. Sure, but they currently have a P/E ratio of 67… So being vastly bigger in 2035 is not necessarily enough. They have to be enormously bigger and still hugely profitable. > Nvidia can do the same though. Yes, but then they don’t have that moat. > The moat isn't in inference. It's in training. I’d say it’s even narrower than that: Nvidias AI moat is in training novel / unforeseen NN architectures. Will that be a meaningful moat in 2035?
- aurareturn 2y ago
  It's really hard to tell. Just all speculative. If you say you don't believe Nvidia is worth $3.5t, and you want to short Nvidia, good luck. But at the same time, I can see why some people don't think Nvidia can't sustain itself. But it all comes down to how good the GPT5 class of LLMs are for the next 2 years.
  - bjornsing 2y ago
    > But it all comes down to how good the GPT5 class of LLMs are for the next 2 years. I guess what I’m saying is that it really doesn’t. But in order to make money on shorts you not only have to be right, you also have to get the timing right. That’s a lot more difficult…