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I hold the exact same sentiment. The safest investment you can make in this AI race is Alphabet. The smaller players being wrapped up in this (CRWV, NOK, etc...

I hold the exact same sentiment. The safest investment you can make in this AI race is Alphabet. The smaller players being wrapped up in this (CRWV, NOK, etc...) are going to get obliterated when the returns are not as good as previously thought. The bigger players will take a hit, but not as much as the small ones. NVIDIA also seems like a risky bet given all the money they're passing around in circles to themselves via multi-billion dollar "investments"

wslh 1y ago
NVIDIA also seems like a risky bet because Google has their own chips R&D. It's not just another data center buying NVIDIA's GPUs. BTW Apple is following suit regarding chips, don't know if at some point Apple will offer any cloud service or continue to work on their ecosystem only. Beyond that there are a lot of new chip companies attacking the market: https://news.ycombinator.com/item?id=45686790 https://news.ycombinator.com/item?id=45686790
- sjs382 1y ago
  While Google has their own chips, they don't really have the market power there to buy up bleeding-edge manufacturing capacity. Apple on the other hand... (though they're behind in other regards)
  - wslh 1y ago
    But they were just an example. They are many players arising. You can look at this: https://news.ycombinator.com/item?id=45746246 https://news.ycombinator.com/item?id=45746246 even <https://www.nextsilicon.com/ https://www.nextsilicon.com/> is not on that list. I don't see a natural monopoly anymore.
- lubesGordi 1y ago
  This makes sense to me. Where I work our ai team set up a couple h100 cards and are hosting a newer model that uses up around 80GB vram. You can see the gpu utilization on graphana go to like 80% for seconds as it processes a single request. That was very surprising to me. This is $30k worth of hardware that can support only a couple users and maybe only 1 if you have an agent going. Now, maybe we're doing something wrong, but it's hard to imagine anyone is going to make money on hosting billions of dollars of these cards when you're making $20 a month per card. I guess it depends on how active your users are. Hard to imagine anthropic is right side up here.
  - mike_hearn 1y ago
    But was that with batching? It makes a big difference. You can run many requests in parallel on the same card if you're doing LLM inferencing.
BoredPositron 1y ago
It's not that easy. Tim is probably rubbing his hands until he can bring anthropic under the apple umbrella.
- whynotminot 1y ago
  Might have missed the boat on that. It’s everyone’s wet dream that Apple buys Anthropic, but I’m guessing their valuation now is already too high even for Apple. And why would Amazon let that happen? It’s a solid match but not happening unless the AI market craters and Apple swoops in to buy them for vastly less.
  - dangus 1y ago
    I wouldn’t be surprised if Apple eventually decides that AI isn’t even a market worth existing in beyond some basic on-device tools. They might say, have fun making single digit or negative profit margins on AI, we’ll sell subscriptions and iPhones and extended warranties.
    - garbthetill 1y ago
      apple is quite smart with this, there was a time when people thought they were dumb for not buying up tesla and ultimately shutting down their self driving division, but now it seems like a good bet.
    - raw_anon_1111 1y ago
      All reports are that Apple isn’t really focusing on building their own server side models and is mostly just going to be a platform for other companies to fight over just like they said they don’t pay OpenAI anything for the current integration and Google pays them $20B+ a year to be the default search engine. It makes no sense for Apple to waste money on having their own LLM when they are becoming commoditized - just chose the one that will give them the best deal.
      - mnky9800n 1y ago
mattbrewsbytes 1y ago
If you look back at the dot com era, hardware companies did survive but weren't the financial "winners". Cisco is an example and a good comparison is Amazon - their bread and butter now is ecommerce, they dominate it and that was borne out of that bubble. Alphabet also has massive market share with YouTube, solid cloud offerings, Waymo which already has driverless/unsupervised robot taxis and their old standby search which is morphing more into more AI answers when you throw questions in your browser. Alphabet's P/E ratio is lower than the S&P 500's. Some may argue the S&P is mostly being held up by Tech and AI related companies so stock in Alphabet could be seen as undervalued and NVDIA as overvalued. Hardware almost always ends up getting commoditized so investing in hardware companies for the long haul does carry maybe more risk than mainly software companies.
sjs382 1y ago
> The safest investment you can make in this AI race is Alphabet. From the technical/talent/funding side, I agree with you. With Alphabet, the real risk is that they lose interest/focus and kill (or pivot) products early. I don't really see that happening in the short term (considering the hype/investments/cash around AI) but maybe in the medium to long term if things start to get stale. Even with that risk though, I agree with you.
- overfeed 1y ago
  The chances of Alphabet losing interest in AI are vanishingly small. Google (pre-Alphabet remaming) was the AI company before AI companies were called that.
  - acdha 1y ago
    They didn’t lose interest in messaging when they cycled through half a dozen different apps but the problem was they were building products they wanted to exist rather than what users wanted. I’d worry about AI getting similar churn if PMs make their name by launching a new product rather than improving an existing one.
    - overfeed 1y ago
      The root comment was investor-centric, i.e. if you want to divert some investment towards AI, Alphabet is a smart bet. Investors got great returns as Google churned messaging platforms, and this will likely be the case ad Google churns through AI products, or even entire architectures.
      - acdha 1y ago
        We did get good returns but that was because other units did very well. It’s not a given but still too likely that they’d botch AI products but still be profitable due to ad sales continuing to grow. I do think AI has better than average chances, though, because it seems to have scared their senior management enough to do their jobs: from outside, everything appears to radiate “this can’t fail” in a way they haven’t had since the 2000s.
_DeadFred_ 1y ago
Man I remember when IBM was the safe bet. I remember when SCO had an all hands meeting that they evaluated that linux wasn't a threat because SCO was the safe choice, the big player in UNIX on commodity hardware. I don't think tech works that way.

wslh 1y ago

NVIDIA also seems like a risky bet because Google has their own chips R&D. It's not just another data center buying NVIDIA's GPUs. BTW Apple is following suit regarding chips, don't know if at some point Apple will offer any cloud service or continue to work on their ecosystem only. Beyond that there are a lot of new chip companies attacking the market: https://news.ycombinator.com/item?id=45686790 https://news.ycombinator.com/item?id=45686790

sjs382 1y ago
While Google has their own chips, they don't really have the market power there to buy up bleeding-edge manufacturing capacity. Apple on the other hand... (though they're behind in other regards)
- wslh 1y ago
  But they were just an example. They are many players arising. You can look at this: https://news.ycombinator.com/item?id=45746246 https://news.ycombinator.com/item?id=45746246 even <https://www.nextsilicon.com/ https://www.nextsilicon.com/> is not on that list. I don't see a natural monopoly anymore.
lubesGordi 1y ago
This makes sense to me. Where I work our ai team set up a couple h100 cards and are hosting a newer model that uses up around 80GB vram. You can see the gpu utilization on graphana go to like 80% for seconds as it processes a single request. That was very surprising to me. This is $30k worth of hardware that can support only a couple users and maybe only 1 if you have an agent going. Now, maybe we're doing something wrong, but it's hard to imagine anyone is going to make money on hosting billions of dollars of these cards when you're making $20 a month per card. I guess it depends on how active your users are. Hard to imagine anthropic is right side up here.
- mike_hearn 1y ago
  But was that with batching? It makes a big difference. You can run many requests in parallel on the same card if you're doing LLM inferencing.

BoredPositron 1y ago

It's not that easy. Tim is probably rubbing his hands until he can bring anthropic under the apple umbrella.

whynotminot 1y ago
Might have missed the boat on that. It’s everyone’s wet dream that Apple buys Anthropic, but I’m guessing their valuation now is already too high even for Apple. And why would Amazon let that happen? It’s a solid match but not happening unless the AI market craters and Apple swoops in to buy them for vastly less.
- dangus 1y ago
  I wouldn’t be surprised if Apple eventually decides that AI isn’t even a market worth existing in beyond some basic on-device tools. They might say, have fun making single digit or negative profit margins on AI, we’ll sell subscriptions and iPhones and extended warranties.
  - garbthetill 1y ago
    apple is quite smart with this, there was a time when people thought they were dumb for not buying up tesla and ultimately shutting down their self driving division, but now it seems like a good bet.
  - raw_anon_1111 1y ago
    All reports are that Apple isn’t really focusing on building their own server side models and is mostly just going to be a platform for other companies to fight over just like they said they don’t pay OpenAI anything for the current integration and Google pays them $20B+ a year to be the default search engine. It makes no sense for Apple to waste money on having their own LLM when they are becoming commoditized - just chose the one that will give them the best deal.
    - mnky9800n 1y ago

mattbrewsbytes 1y ago

If you look back at the dot com era, hardware companies did survive but weren't the financial "winners". Cisco is an example and a good comparison is Amazon - their bread and butter now is ecommerce, they dominate it and that was borne out of that bubble. Alphabet also has massive market share with YouTube, solid cloud offerings, Waymo which already has driverless/unsupervised robot taxis and their old standby search which is morphing more into more AI answers when you throw questions in your browser. Alphabet's P/E ratio is lower than the S&P 500's. Some may argue the S&P is mostly being held up by Tech and AI related companies so stock in Alphabet could be seen as undervalued and NVDIA as overvalued. Hardware almost always ends up getting commoditized so investing in hardware companies for the long haul does carry maybe more risk than mainly software companies.

sjs382 1y ago

> The safest investment you can make in this AI race is Alphabet. From the technical/talent/funding side, I agree with you. With Alphabet, the real risk is that they lose interest/focus and kill (or pivot) products early. I don't really see that happening in the short term (considering the hype/investments/cash around AI) but maybe in the medium to long term if things start to get stale. Even with that risk though, I agree with you.

overfeed 1y ago
The chances of Alphabet losing interest in AI are vanishingly small. Google (pre-Alphabet remaming) was the AI company before AI companies were called that.
- acdha 1y ago
  They didn’t lose interest in messaging when they cycled through half a dozen different apps but the problem was they were building products they wanted to exist rather than what users wanted. I’d worry about AI getting similar churn if PMs make their name by launching a new product rather than improving an existing one.
  - overfeed 1y ago
    The root comment was investor-centric, i.e. if you want to divert some investment towards AI, Alphabet is a smart bet. Investors got great returns as Google churned messaging platforms, and this will likely be the case ad Google churns through AI products, or even entire architectures.
    - acdha 1y ago
      We did get good returns but that was because other units did very well. It’s not a given but still too likely that they’d botch AI products but still be profitable due to ad sales continuing to grow. I do think AI has better than average chances, though, because it seems to have scared their senior management enough to do their jobs: from outside, everything appears to radiate “this can’t fail” in a way they haven’t had since the 2000s.

_DeadFred_ 1y ago

Man I remember when IBM was the safe bet. I remember when SCO had an all hands meeting that they evaluated that linux wasn't a threat because SCO was the safe choice, the big player in UNIX on commodity hardware. I don't think tech works that way.