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As others mentioned, 5T isn't money available to NVDA. It could leverage that to buy a TPU company in an all stock deal though. The bigger issue is that enteri
by matwood 11mo ago
As others mentioned, 5T isn't money available to NVDA. It could leverage that to buy a TPU company in an all stock deal though.
The bigger issue is that entering a 'race' implies a race to the bottom.
I've noted this before, but one of NVDA's biggest risks is that its primary customers are also technical, also make hardware, also have money, and clearly see NVDA's margin (70% gross!!, 50%+ profit) as something they want to eliminate. Google was first to get there (not a surprise), but Meta is also working on its own hardware along with Amazon.
This isn't a doom post for NVDA the company, but its stock price is riding a knifes edge. Any margin or growth contraction will not be a good day for their stock or the S&P.
- sigmoid10 11mo agoMaking the hardware is actually the easy part. Everyone and their uncle who had some cash have tried by now: Microsoft, Meta, Tesla, Huawei, Amazon, Intel - the list goes on and on. But Nvidia is not a chip company. Huang himself said they are mostly a software company. And that is how they were able to build a gigantic moat. Because noone else has even come close on the software side. Google is the only one who has had some success on this side, because they also spent tons of money and time on software refinement by now, while all the other chips vanished into obscurity.
- sanjayjc 11mo agoGenuine question: given LLMs' inexorable commoditization of software, how soon before NVDA's CUDA moat is breached too? Is CUDA somehow fundamentally different from other kinds of software or firmware?
- matwood 11mo agoAre you saying that Google, Meta, Amazon, etc... can't do software? It's the bread and butter of these companies. The CUDA moat is important to hold off the likes of AMD, but hardware like TPUs for internal use or other big software makers is not a big hurdle. Of course Huang will lean on the software being key because he sees the hardware competition catching up.
- sigmoid10 11mo agoHuang said that many years ago, long before ChatGPT or the current AI hype were a thing. In that interview he said that their costs for software R&D and support are equal or even bigger than their hardware side. They've also been hiring top SWE talent for almost two decades now. None of the other companies have spent even close to this much time and money on GPU software, at least until LLMs became insanely popular. So I'd be surprised to see them catch up anytime soon.
- qdotme 11mo agoEssentially, yes, they haven’t done deep software. Netflix probably comes closest amongst FAANG. Google, Meta, Amazon do “shallow and broad” software. They are quite fast at capturing new markets swiftly, they frequently repackage OpenSource core and add the large amount of business logic to make it work, but essentially follow the market cycles - they hire and layoff on a few year cycle, and the people who work there typically also will jump around industries due to both transferable skills and relatively competitive competitors. NVDA is roughly in the same bucket as HFT vendors. They retain talent on a 5-10y timescales. They build software stacks that range from complex kernel drivers and hardware simulators all the way to optimizing compilers and acceleration libraries. This means they can build more integrated, more optimal and more coherent solutions. Just like Tesla can build a more integrated vehicle than Ford.
- thaumasiotes 11mo agoBut the first example sigmoid10 gave of a company that can't do software was Microsoft.
- Glemkloksdjf 11mo agoNvidia has everything they need to build the most advanced GPU Chip in the world and mass produce it. Everything. They can easily just do this for more optimized Chips. "easily" in sense of that wouldn't require that much investment. Nvidia knows how to invest and has done this for a long time. Their Ominiverse or robots platform isaac are all epxensive. Nvidia has 10x more software engineers than AMD
- farseer 11mo agoThey still go to TSMC for fab, and so does everyone else.
- Glemkloksdjf 11mo agoFor sure. But they also have high volumne and know how to do everything. Also certain companies normally don't like to do things themselves if they don't have to. Nonetheless nvidia is were it is because it has cude and an ecoysystem. Everyone uses this ecosystem and then you just run that stuff on the bigger version of the same ecosystem.