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Jevons paradox has been quoted to death here - it really needs pointing out that it points to a commodity in general, not Nvidia. Nvidia is not selling just coa

Jevons paradox has been quoted to death here - it really needs pointing out that it points to a commodity in general, not Nvidia. Nvidia is not selling just coal, it's selling a super purified ultra powerful coal only it can make. Jevons paradox just says coal (compute) usage will increase. Not that this specific type of coal will. And this is quite separate from the business of it. For example Jevons paradox is quite apparent in the airline industry, but airlines are notorious for possibly never having net made a profit because of high capex and aggressive pricing competition. Jevons paradox is not any reason at all for a runaway valuation of a company.

alephnerd 2y ago
I agree, but the existing moat that Nvidia has due to CUDA and the entire HPC ecosystem still holds. And this is why it's relevant to treat Nvidia as the majority of the GPU space segment. Furthermore, it's Nvidia that owns Mellanox - which is the owner of the Infiniband IP which is used in just about every DC or cluster, because no other vendor came as close for interconnect performance
- InkCanon 2y ago
  You're on the dot here. Most people are looking at it wrong. Someone here once put it succinctly - Nvidia isn't selling GPUs, it's selling Infiniband clusters. The whole NVLink/CUDA ecosystem is the key, and a mass of separate players (Cerebras, Google TPUs for inference, Mojo for CUDA, AMD/Intel/Huawei etc for GPUs, etc) are very unlikely to break that. In fact NVLink is so powerful, based on the DeepSeek paper it appears to be nerfed (classic Nvidia market segmentation strategy), and a big part of squeezing their compute was hacking around that. That said, the reason I don't invest Nvidia is that they're selling one more thing - AI legitimacy. Every tech shop is buying Nvidia because all their CEOs need to go to the board and say, we've got so and so AI strategy. Sure as hell Meta isn't spending 50 billion a year because AI makes them so much damn money (supposedly ML saved their ass when Apple put on App Tracking Transparency, but 99% suds it's not the ML that needs a gigawatt GPU cluster to run). And the very real calculus for investors/CEOs is that if DeepSeek made this on a thousandth of the budget (conflicting reports but high probably DS has a fraction of the compute), whYs stopping Zuckerberg from taking 10B of that capex spend and offering every name on that DeepSeek paper a 10 million salary?
lm28469 2y ago
> Jevons paradox Nobody knew what it was yesterday and now everyone is using it as if they came up with the idea themselves https://trends.google.com/trends/explore?date=today%205-y&q=Jevons%20paradox&hl=en https://trends.google.com/trends/explore?date=today%205-y&q=...
- glenstein 2y ago
  I certainly didn't know about it. Was there any high visibility use of it over social media in the past few days?
  - lm28469 2y ago
    Satya Nadella on twatter
- skwee357 2y ago
  Welcome to the internet. Astrologers proclaimed the week of DeepSeek, the number of Jevons paradox experts quadrupled.
- SilasX 2y ago
  What are you talking about? I see two pages, just of submissions on HN, before early last year: https://hn.algolia.com/?dateEnd=1706400000&dateRange=custom&dateStart=1200873600&page=0&prefix=false&query=Jevons%20Paradox&sort=byPopularity&type=story https://hn.algolia.com/?dateEnd=1706400000&dateRange=custom&... I see over 900 results just for comments: https://hn.algolia.com/?dateEnd=1706400000&dateRange=custom&dateStart=1200873600&page=0&prefix=false&query=Jevons%20Paradox&sort=byDate&type=comment https://hn.algolia.com/?dateEnd=1706400000&dateRange=custom&... I personally have brought it up when it's relevant, like when people think energy efficiency improvements always make total use go down: https://news.ycombinator.com/item?id=14764845 https://news.ycombinator.com/item?id=14764845 https://news.ycombinator.com/item?id=19543772 https://news.ycombinator.com/item?id=19543772 And when a more efficient website showed more load on the server (because it widened usage to a broader audience): https://news.ycombinator.com/item?id=13602792 https://news.ycombinator.com/item?id=13602792 How about the more charitable hypothesis: It's a relevant dynamic because this is a situation where the paradox most strongly applies: efficiency improvement in use of an input whose output has insatiable demand. And so people bring it up, even if they just recently learned it from another comment. It's okay to say something true ... even if someone else already said it elsewhere.
onlyrealcuzzo 2y ago
Correct me if I'm wrong, but Jevons paradox says nothing about profits from selling coal, the growth rates of coal consumption, etc. Nvidia currently has ~75% margins and ~90% growth. If either of those nobs get turned down slightly, their valuation can tank. Which is what happened. If Nvidia's 10-year growth forecast went from ~40% per year (29x in 10 years) to ~30% per year (14x in 10 years) - that's a 50% smaller future company you're expecting. It's still great for Nvidia. It's just LESS great than people thought before, which means their market cap comes down a ton. That's what you're all forgetting.
- InkCanon 2y ago
  Exactly. Any rational person will predict Nvidia will own the space. But projected over a long period, a 10% decrease in growth is massive
- Jlagreen 2y ago
  Nvidia had 65% margins 5 years ago when they primarily sold gaming GPUs. What margins do you think Nvidia is charging for RTX which getting more and more expensive every generation? What margins do you think Project Digits will be for Nvidia? That thing costs 50% more than a RTX card and on the RTX card Nvidia only earns on the chip which is only part of the card. Digits is a 100% Nvidia product. Does it matter if 1 Blackwell DC GPU or 13 Digits are sold? No, Nvidia has probably an insane margin on Digits and has only one goal, total spread and integration of Nvidia HW in any AI workload. Because then Nvidia can offer SW with super margins. Think of Nvidia Enterprise AI, Omniverse, Clara, Isaac, DriveSim and many more. If 95% of AI acclerators are from Nvidia then it's only a small step to also use Nvidia SW frameworks.

alephnerd 2y ago

I agree, but the existing moat that Nvidia has due to CUDA and the entire HPC ecosystem still holds. And this is why it's relevant to treat Nvidia as the majority of the GPU space segment. Furthermore, it's Nvidia that owns Mellanox - which is the owner of the Infiniband IP which is used in just about every DC or cluster, because no other vendor came as close for interconnect performance

InkCanon 2y ago
You're on the dot here. Most people are looking at it wrong. Someone here once put it succinctly - Nvidia isn't selling GPUs, it's selling Infiniband clusters. The whole NVLink/CUDA ecosystem is the key, and a mass of separate players (Cerebras, Google TPUs for inference, Mojo for CUDA, AMD/Intel/Huawei etc for GPUs, etc) are very unlikely to break that. In fact NVLink is so powerful, based on the DeepSeek paper it appears to be nerfed (classic Nvidia market segmentation strategy), and a big part of squeezing their compute was hacking around that. That said, the reason I don't invest Nvidia is that they're selling one more thing - AI legitimacy. Every tech shop is buying Nvidia because all their CEOs need to go to the board and say, we've got so and so AI strategy. Sure as hell Meta isn't spending 50 billion a year because AI makes them so much damn money (supposedly ML saved their ass when Apple put on App Tracking Transparency, but 99% suds it's not the ML that needs a gigawatt GPU cluster to run). And the very real calculus for investors/CEOs is that if DeepSeek made this on a thousandth of the budget (conflicting reports but high probably DS has a fraction of the compute), whYs stopping Zuckerberg from taking 10B of that capex spend and offering every name on that DeepSeek paper a 10 million salary?

lm28469 2y ago

> Jevons paradox Nobody knew what it was yesterday and now everyone is using it as if they came up with the idea themselves https://trends.google.com/trends/explore?date=today%205-y&q=Jevons%20paradox&hl=en https://trends.google.com/trends/explore?date=today%205-y&q=...

glenstein 2y ago
I certainly didn't know about it. Was there any high visibility use of it over social media in the past few days?
- lm28469 2y ago
  Satya Nadella on twatter
skwee357 2y ago
Welcome to the internet. Astrologers proclaimed the week of DeepSeek, the number of Jevons paradox experts quadrupled.
SilasX 2y ago
What are you talking about? I see two pages, just of submissions on HN, before early last year: https://hn.algolia.com/?dateEnd=1706400000&dateRange=custom&dateStart=1200873600&page=0&prefix=false&query=Jevons%20Paradox&sort=byPopularity&type=story https://hn.algolia.com/?dateEnd=1706400000&dateRange=custom&... I see over 900 results just for comments: https://hn.algolia.com/?dateEnd=1706400000&dateRange=custom&dateStart=1200873600&page=0&prefix=false&query=Jevons%20Paradox&sort=byDate&type=comment https://hn.algolia.com/?dateEnd=1706400000&dateRange=custom&... I personally have brought it up when it's relevant, like when people think energy efficiency improvements always make total use go down: https://news.ycombinator.com/item?id=14764845 https://news.ycombinator.com/item?id=14764845 https://news.ycombinator.com/item?id=19543772 https://news.ycombinator.com/item?id=19543772 And when a more efficient website showed more load on the server (because it widened usage to a broader audience): https://news.ycombinator.com/item?id=13602792 https://news.ycombinator.com/item?id=13602792 How about the more charitable hypothesis: It's a relevant dynamic because this is a situation where the paradox most strongly applies: efficiency improvement in use of an input whose output has insatiable demand. And so people bring it up, even if they just recently learned it from another comment. It's okay to say something true ... even if someone else already said it elsewhere.

onlyrealcuzzo 2y ago

Correct me if I'm wrong, but Jevons paradox says nothing about profits from selling coal, the growth rates of coal consumption, etc. Nvidia currently has ~75% margins and ~90% growth. If either of those nobs get turned down slightly, their valuation can tank. Which is what happened. If Nvidia's 10-year growth forecast went from ~40% per year (29x in 10 years) to ~30% per year (14x in 10 years) - that's a 50% smaller future company you're expecting. It's still great for Nvidia. It's just LESS great than people thought before, which means their market cap comes down a ton. That's what you're all forgetting.

InkCanon 2y ago
Exactly. Any rational person will predict Nvidia will own the space. But projected over a long period, a 10% decrease in growth is massive
Jlagreen 2y ago
Nvidia had 65% margins 5 years ago when they primarily sold gaming GPUs. What margins do you think Nvidia is charging for RTX which getting more and more expensive every generation? What margins do you think Project Digits will be for Nvidia? That thing costs 50% more than a RTX card and on the RTX card Nvidia only earns on the chip which is only part of the card. Digits is a 100% Nvidia product. Does it matter if 1 Blackwell DC GPU or 13 Digits are sold? No, Nvidia has probably an insane margin on Digits and has only one goal, total spread and integration of Nvidia HW in any AI workload. Because then Nvidia can offer SW with super margins. Think of Nvidia Enterprise AI, Omniverse, Clara, Isaac, DriveSim and many more. If 95% of AI acclerators are from Nvidia then it's only a small step to also use Nvidia SW frameworks.