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If your competitor refreshes their cards and you dont, they will win on margin. You kind of have to.

by wordpad 9mo ago

lazide 9mo ago
Not necessarily if you count capital costs vs operating costs/margins. Replacing cars every 3 years vs a couple % in efficiency is not an obvious trade off. Especially if you can do it in 5 years instead of 3.
- zozbot234 9mo ago
  You can sell the old, less efficient GPUs to folks who will be running them with markedly lower duty cycles (so, less emphasis on direct operational costs), e.g. for on-prem inference or even just typical workstation/consumer use. It ends up being a win-win trade.
  - lazide 9mo ago
    Then you’re dealing with a lot of labor to do the switches (and arrange sales of used equipment), plus capital float costs while you do it. It can make sense at a certain scale, but it’s a non trivial amount of cost and effort for potentially marginal returns.
    - pixl97 9mo ago
      Building a new data center and getting power takes years to double your capacity. Swapping out out a rack that is twice as fast takes very little time in comparison.
      - lazide 9mo ago
        Huh? What does your statements have to do with what I’m saying? I’m just pointing out changing it out at 5 years is likely cheaper than at 3 years.
        pixl97 9mo ago
        Depends at the rate of growth of the hardware. If your data center is full and fully booked, and hardware is doubling in speed every year it's cheaper to switch it out every couple of years.
        lazide 9mo ago
        So many goal posts being changed constantly?
- iancmceachern 9mo ago
  You highlight the exact dilemma. Company A has taxis that are 5 percent less efficient and for the reasons you stated doesn't want to upgrade. Company B just bought new taxis, and they are undercutting company A by 5 percent while paying their drivers the same. Company A is no longer competitive.
  - Dylan16807 9mo ago
    The debt company B took on to buy those new taxis means they're no longer competitive either if they undercut by 5%. The scenario doesn't add up.
    - iancmceachern 9mo ago
      But Company A also took on debt for theirs, so that's a wash. You assume only one of them has debt to service?
      - Dylan16807 9mo ago
        Both companies bought a set of taxis in the past. Presumably at the same time if we want this comparison to be easy to understand. If company A still has debt from that, company B has that much debt plus more debt from buying a new set of taxis. Refreshing your equipment more often means that you're spending more per year on equipment. If you do it too often, then even if the new equipment is better you lose money overall. If company B wants to undercut company A, their advantage from better equipment has to overcome the cost of switching.
        iancmceachern 9mo ago
        You are assuming something again. They both refresh their equipment at the same rate.
        Dylan16807 9mo ago
        > They both refresh their equipment at the same rate. I wish you'd said that upfront. Especially because the comment you replied to was talking about replacing at different rates. So your version, if company A and B are refreshing at the same rate, then that means six months before B's refresh company A had the newer taxis. You implied they were charging similar amounts at that point, so company A was making bigger profits, and had been making bigger profits for a significant time. So when company B is able to cut prices 5%, company A can survive just fine. They don't need to rush into a premature upgrade that costs a ton of money, they can upgrade on their normal schedule. TL;DR: six months ago company B was "no longer competitive" and they survived. The companies are taking turns having the best tech. It's fine.

If your competitor refreshes their cards and you dont, they will win on margin. You kind of have to.

by wordpad 9mo ago

If your competitor refreshes their cards and you dont, they will win on margin. You kind of have to.

Not necessarily if you count capital costs vs operating costs/margins. Replacing cars every 3 years vs a couple % in efficiency is not an obvious trade off. Especially if you can do it in 5 years instead of 3.

zozbot234 9mo ago
You can sell the old, less efficient GPUs to folks who will be running them with markedly lower duty cycles (so, less emphasis on direct operational costs), e.g. for on-prem inference or even just typical workstation/consumer use. It ends up being a win-win trade.
- lazide 9mo ago
  Then you’re dealing with a lot of labor to do the switches (and arrange sales of used equipment), plus capital float costs while you do it. It can make sense at a certain scale, but it’s a non trivial amount of cost and effort for potentially marginal returns.
  - pixl97 9mo ago
    Building a new data center and getting power takes years to double your capacity. Swapping out out a rack that is twice as fast takes very little time in comparison.
    - lazide 9mo ago
      Huh? What does your statements have to do with what I’m saying? I’m just pointing out changing it out at 5 years is likely cheaper than at 3 years.
      - pixl97 9mo ago
        Depends at the rate of growth of the hardware. If your data center is full and fully booked, and hardware is doubling in speed every year it's cheaper to switch it out every couple of years.
        lazide 9mo ago
        So many goal posts being changed constantly?
iancmceachern 9mo ago
You highlight the exact dilemma. Company A has taxis that are 5 percent less efficient and for the reasons you stated doesn't want to upgrade. Company B just bought new taxis, and they are undercutting company A by 5 percent while paying their drivers the same. Company A is no longer competitive.
- Dylan16807 9mo ago
  The debt company B took on to buy those new taxis means they're no longer competitive either if they undercut by 5%. The scenario doesn't add up.
  - iancmceachern 9mo ago
    But Company A also took on debt for theirs, so that's a wash. You assume only one of them has debt to service?
    - Dylan16807 9mo ago
      Both companies bought a set of taxis in the past. Presumably at the same time if we want this comparison to be easy to understand. If company A still has debt from that, company B has that much debt plus more debt from buying a new set of taxis. Refreshing your equipment more often means that you're spending more per year on equipment. If you do it too often, then even if the new equipment is better you lose money overall. If company B wants to undercut company A, their advantage from better equipment has to overcome the cost of switching.
      - iancmceachern 9mo ago
        You are assuming something again. They both refresh their equipment at the same rate.
        Dylan16807 9mo ago
        > They both refresh their equipment at the same rate. I wish you'd said that upfront. Especially because the comment you replied to was talking about replacing at different rates. So your version, if company A and B are refreshing at the same rate, then that means six months before B's refresh company A had the newer taxis. You implied they were charging similar amounts at that point, so company A was making bigger profits, and had been making bigger profits for a significant time. So when company B is able to cut prices 5%, company A can survive just fine. They don't need to rush into a premature upgrade that costs a ton of money, they can upgrade on their normal schedule. TL;DR: six months ago company B was "no longer competitive" and they survived. The companies are taking turns having the best tech. It's fine.