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There is not enough water (to cool data centers) to justify NVDA's current valuation. The same is true of electricity - neither nuclear power nor fusion will n

There is not enough water (to cool data centers) to justify NVDA's current valuation. The same is true of electricity - neither nuclear power nor fusion will not be online anytime soon.

lxgr 2y ago
Those are definitely not the limiting factors here. Not nearly all data centers are water cooled, and there is this amazing technology that can convert sunlight into electricity in a relatively straightforward way. AI workloads (at least training) are just about as geographically distributeable as it gets due to not being very latency-sensitive, and even if you can't obtain sufficient grid interconnection or buffer storage, you can always leave them idle at night.
- grajaganDev 2y ago
  Right - they are not limiting factors, they are reasons that NVDA is overvalued. Stock price is based on future earnings. The smart money knows this and is reacting this morning - thus the drop in NVDA.
energy123 2y ago
Solar microgrids are cheaper and faster than nuclear. New nuclear isn't happening on the timescales that matter, even assuming significant deregulation.
- grajaganDev 2y ago
  Can you back up that solar microgrids will supply enough power to justify NVDA's current valuation?
  - kragen 2y ago
    Well, prediction is very difficult, especially with respect to the future. But the fundamentals look good. Current world marketed energy consumption is about 18 terawatts. Current mainstream solar panels are 21% efficient. At this efficiency, the terrestrial solar resource is about 37000 terawatts, 2000 times larger than the entire human economy: ~ $ units Currency exchange rates from exchangerate-api.com (USD base) on 2024-11-25 Consumer price index data from US BLS, 2024-11-24 7290 units, 125 prefixes, 169 nonlinear units You have: 21% solarirradiance circlearea(earthradius) You want: TW * 36531.475 / 2.7373655e-05 IEA reports that currently (three years ago) datacenters used 460TWh/year. In SI units, that's 0.05 terawatts. https://iea.blob.core.windows.net/assets/6b2fd954-2017-408e-bf08-952fdd62118a/Electricity2024-Analysisandforecastto2026.pdf https://iea.blob.core.windows.net/assets/6b2fd954-2017-408e-... So, once datacenters are using seven hundred thousand times more power than currently, we might need to seek power sources for them other than terrestrial solar panels running microgrids. Solar panels in space, for example. You could be forgiven for wondering why this enormous resource has taken so long to tap into and why the power grid is still largely fossil-fuel-powered. The answer is that building fossil fuel plants only costs on the order of US$1–4 per watt (either nameplate or average), and until the last few years, solar panels cost so much more than that that even free "fuel" wasn't enough to make them economically competitive. See https://www.eia.gov/analysis/studies/powerplants/capitalcost/pdf/capital_cost_AEO2020.pdf https://www.eia.gov/analysis/studies/powerplants/capitalcost... for example. Today, however, solar panels cost US$0.10 per peak watt, which works out to about US$0.35 to US$1 per average watt, depending largely on latitude. This is 25% lower than the price of even a year ago and a third of the price of two years ago. https://www.solarserver.de/photovoltaik-preis-pv-modul-preisindex/ https://www.solarserver.de/photovoltaik-preis-pv-modul-preis...

There is not enough water (to cool data centers) to justify NVDA's current valuation. The same is true of electricity - neither nuclear power nor fusion will not be online anytime soon.

lxgr 2y ago

Those are definitely not the limiting factors here. Not nearly all data centers are water cooled, and there is this amazing technology that can convert sunlight into electricity in a relatively straightforward way. AI workloads (at least training) are just about as geographically distributeable as it gets due to not being very latency-sensitive, and even if you can't obtain sufficient grid interconnection or buffer storage, you can always leave them idle at night.

grajaganDev 2y ago
Right - they are not limiting factors, they are reasons that NVDA is overvalued. Stock price is based on future earnings. The smart money knows this and is reacting this morning - thus the drop in NVDA.

energy123 2y ago

Solar microgrids are cheaper and faster than nuclear. New nuclear isn't happening on the timescales that matter, even assuming significant deregulation.

grajaganDev 2y ago
Can you back up that solar microgrids will supply enough power to justify NVDA's current valuation?
- kragen 2y ago
  Well, prediction is very difficult, especially with respect to the future. But the fundamentals look good. Current world marketed energy consumption is about 18 terawatts. Current mainstream solar panels are 21% efficient. At this efficiency, the terrestrial solar resource is about 37000 terawatts, 2000 times larger than the entire human economy: ~ $ units Currency exchange rates from exchangerate-api.com (USD base) on 2024-11-25 Consumer price index data from US BLS, 2024-11-24 7290 units, 125 prefixes, 169 nonlinear units You have: 21% solarirradiance circlearea(earthradius) You want: TW * 36531.475 / 2.7373655e-05 IEA reports that currently (three years ago) datacenters used 460TWh/year. In SI units, that's 0.05 terawatts. https://iea.blob.core.windows.net/assets/6b2fd954-2017-408e-bf08-952fdd62118a/Electricity2024-Analysisandforecastto2026.pdf https://iea.blob.core.windows.net/assets/6b2fd954-2017-408e-... So, once datacenters are using seven hundred thousand times more power than currently, we might need to seek power sources for them other than terrestrial solar panels running microgrids. Solar panels in space, for example. You could be forgiven for wondering why this enormous resource has taken so long to tap into and why the power grid is still largely fossil-fuel-powered. The answer is that building fossil fuel plants only costs on the order of US$1–4 per watt (either nameplate or average), and until the last few years, solar panels cost so much more than that that even free "fuel" wasn't enough to make them economically competitive. See https://www.eia.gov/analysis/studies/powerplants/capitalcost/pdf/capital_cost_AEO2020.pdf https://www.eia.gov/analysis/studies/powerplants/capitalcost... for example. Today, however, solar panels cost US$0.10 per peak watt, which works out to about US$0.35 to US$1 per average watt, depending largely on latitude. This is 25% lower than the price of even a year ago and a third of the price of two years ago. https://www.solarserver.de/photovoltaik-preis-pv-modul-preisindex/ https://www.solarserver.de/photovoltaik-preis-pv-modul-preis...