This article inaccurately paraphrases actual journalism at the WSJ. That article does not use the word “excess” once. They can have an avalanche of wafers coming at them without it being excessive. You can make that inference but that exact statement cannot be attributed to Huang, per the actual reporting.
The actual quote from the actual article: “ Then he went on to describe the situation the company was in. Major cloud providers were running away from Nvidia, making plans to use alternative chips and lessen their reliance on the firm. Even worse, Huang said, the vast supply of chip wafers and memory Nvidia had committed to buying were coming at him like an "avalanche."”
Good work pointing this out. One of the great things about AI is eventually people are going to learn to stop trusting these kinds of websites “it’s all AI slop” and revert back to paid journalism because while the writing can be done by AI, the research and verification largely cannot.
Or so I hope. More likely is people will continue to engage with low-quality information and come to believe all sorts of nonsense, misquotes? Conspiracy theories, and more as they always have…
Journalism was always the lowest of the low of vocations.
It isn't surprising that a simple robot can do it just as well as your run of the mill scribbler.
There is nothing good to go back to because there was nothing good about journalism at any point in the history of mankind.
These freaks don't actually coldly manipulate you with sensationalist headlines, they are exactly as excited to write pages about gruesome family murder as the text suggests.
Now that they compete with TikTok sending you tragedy after tragedy right into your pineal gland, it has been a rough patch to be a traditional corpse picture snatcher.
I personally put a fairly high degree of value in the 'genuine' investigative journalist you're referring to.
The more recent spate of sensationalist journalists however are less remarkable. The ones that parrot headlines from other places, or worse paraphrase to make them get more views.
There seems to be some evidence of "GPUs sitting in warehouses awaiting to be plugged in". But it seems to be mostly/only Ed Zitron pushing the agenda that it's not as planned and that there is oversupply of GPUs.
All hyperscalers have in the last 2 months stated that they have more demand for AI compute (I guess GPUs & their own chips) than they can supply.
Nvidia might have been trying to spread the demand over more providers (neoclouds, and seemingly China) and provided financing to enable that.
It's not clear that this means there is an oversupply of reserved wafer capacity and Nvidia GPUs. But if datacenter construction slows down it might affect the GPU demand as they can't be plugged in.
> All hyperscalers have in the last 2 months stated that they have more demand for AI compute (I guess GPUs & their own chips) than they can supply.
That just means the price point is wrong. They might say they want to buy more racks to increase supply and increase profit, but turning away customers is not what they're doing in a market where prices turn on a dime.
> [...] pushing the agenda that it's not as planned and that there is oversupply of GPUs.
I don't read that it is not as planned, there is high demand from everyone but it appears to be similar to the over recruitment of engineers. They have FOMO, and they also want to block competitors.
> All hyperscalers have in the last 2 months stated that they have more demand for AI compute (I guess GPUs & their own chips) than they can supply.
I certainly have not had any issues getting as much access as I would like. It just costs. Which would imply that the scarcity is manufactured to drive up pricing rather than availability.
> if datacenter construction slows down it might affect the GPU demand as they can't be plugged in.
I think this is the crux of the matter from Nvidia's point of view, that's if they weren't already impacted by the power limitations for customer installations.
> I certainly have not had any issues getting as much access as I would like. It just costs.
It just costs, because demand is high, supply is low, if it was opposite, it would have been like in 2018s, you could get 128Gb RAM server from Hetzner for 50-80 EUR, now it starts at 170 EUR (3x)
I could never track Zitrons argument. I would not be surprised if there are gpus sitting around, we have known for at least the past year that hyperscalers have been unable to build enough data centers. They continue to state demand exceeding supply, that’s kind of why the neoclouds have even become a thing. It does not indicate to me that those gpus are not going to be used or even if companies overpaid for them.
The argument makes sense (but I don't know if it's based on true facts). His claim is basically that hyperscalers want, say, 1M GPUs in the next 10 years, 100k per year, since that's how many they can install. NVIDIA instead gives them a deal saying "you either buy 300k this year, or we won't sell any to you next year" - the goal being to make it look like demand is much higher than it is this year, or at least to recognize revenue much earlier than normal (since those extra 200k GPUs become revenue this year instead of being spread over the next two).
Ehhh I mean sure maybe Nvidia juiced demand for a year. Maybe hyperscalers have bought more capacity than they can use for the next 5 years. It’s possible but again it misses the demand picture. Demand has not changed and only grown. Sure there is a constraint but that will breed innovation and eventually things will come online, those that over committed will suffer.
It actually matters quite a bit - because it means that the picture of demand that you get from the outside may be wildly skewed. Say that it was all true that NVIDIA is secretly selling chips illegally to China and secretly forcing companies to take deliveries early (again, serious claims that I can't at all claim to know are true, and I'm not even sure I personally believe!). You come from the outside and see that it's become very hard to buy more GPUs, so you think that NVIDIA is selling all of its production to barely cover the current year's needs of the non-Chinese market, then your estimation of the total demand for GPUs is going to be off by a significant margin.
> NVIDIA is secretly selling chips illegally to China
This has always been my theory for why we see more GPU sales than we see coming online.
I do think that things like this muddy the demand signal a lot, which may have much, much broader repercussions than just Nvidia. Have Nvidia been doing enough shady stuff that they end up like Enron? Unlikely, but it's entirely possible that they end up like Cisco, still there but not back to their current stock price for ~20 years.
Explanation not endorsement: The argument is that while end user demand for gpu compute may exceed currently online supply, for Nvidia to be able to keep the revenue up, the demand will have to exceed not just currently online supply but also the supply of gpus that have been manufactured and sold but not installed. Otherwise you get some point where neoclouds etc say “ok we have enough gpus for a long time we’re going to spend our money installing them, not buying more. And then suddenly Nvidia’s revenue drops.
Definitely get the idea what never clicks is he always uses it as a gotcha. I am not convinced there is pervasive circular financing. I am certain some entities have overcommit but based on current demand I don’t think it will be an issue for most entities. So maybe Nvidia juiced their earnings for a year or two, they will pay the price. The capacity will still come online.
I thought the argument was that Nvidia were requiring buyers to take immediate delivery of their purchase and wouldn't let them secure future parts or something like that. This was forcing hyperscalars to store their GPUs until they actually had data centers online.
This whole buildout is one of the largest construction projects ever - there will definitely be oversupply hotspots even for items that are in super short supply. I could easily imagine $1B+ of top-tier chips just sitting around in a warehouse for months on end because of difficult planning problems. That's not a sign of any sort of crisis.
There was a post about how growth in the data center space was slowing, so AI must be over. The evidence seems to be that we've reached whatever growth capacity existed or was planned, rather than any drop off in demand.
All I know is when pricing GPU systems for work, I'm getting lead times across the board of 30+ weeks. And the main wait isn't on RAM or disk or anything else, but GPU.
So I don't buy the "GPUs waiting in warehouses" thing.
They're getting stolen from trucks on the highway!
> There seems to be some evidence of "GPUs sitting in warehouses awaiting to be plugged in". But it seems to be mostly/only Ed Zitron pushing the agenda that it's not as planned and that there is oversupply of GPUs.
> All hyperscalers have in the last 2 months stated that they have more demand for AI computing (I guess GPUs & their own chips) than they can supply.
The two things are not in the opposition at all. You need datacenter to plug the chip in. If you dont have the datacenter already build, you cant use the chip.
The question is if it's planned by the purchasers. That they have datacenter capacity coming online according to plan and any "GPUs in warehouses" is just the plan to ensure there are chips to install when the datacenters are ready.
Or that they purchased out of fear, to corner the market, or expecting datacenter capacity that is delayed; and will soon stop purchasing as they don't have datacenter capacity coming online to install the chips they already bought. And noone else neither has that datacenter capacity.
> In an August meeting, Huang belittled Kress for questioning the deals, calling her “a deer in the headlights”. To justify why Nvidia needed to financially backstop OpenAI and smaller cloud providers to keep buying its GPUs, Huang admitted that Nvidia was caught in a massive squeeze.
Are these two sentences related? Is it saying Jensen questioned her on the circular financing? Or was she questioning him? A bit lost on that
Nobody ever listens to the CFO and they should. The one person who actually keeps a company on track is the person who looks at the actual numbers. I have seen this over and over it’s a freaking meme.
Of course they were. They bought up literally as much as they could manage, because anything they didn't would be bought up by someone else. It's literally a use it or lose it market right now. This is not a problem. Just stockpile it.
"It's literally a use it or lose it market right now."
Are you sure? The point of this stockpiling was to create that impression. Now that you have data that that foundation behind that impression is manufactured and faked, you need to reconsider everything that was resting on that foundation. The demand is just so incredible needs to be reexamined from scratch now in light of the active attempts to forge that signal.
It is also worth remembering that this is a prime example of a situation that is not black or white. The absolute size of the demand, however large it may be, is not the question. It's the size relative to the supply, supply which includes all the pumping shenanigans that are coming into the light. The "AI bubble" has never been if there is demand or if the tech has real use, it has always been a relative question about if the build out could possibly make economic sense.
Given that you practically cannot buy memory or storage right now because all of the capacity is taken up by hyperscalers... even if it was a self-fulfilling prophecy, it's still currently fulfilled
That just represents the inertia of the whole system operating on old assumptions, given that it's only still early in the process of coming to light in a public way how much of the frantic purchasing has literally been sitting in a warehouse, depreciating. I mean, I've been pretty suspicious of this for literally years now, but it's been a "conspiracy theory" that this amazing demand is manufactured by a variety of financial hacks rather than just pure demand that the system as a whole has not paid attention to because number was going up, do not question number going up lest the number stop going up.
You need to apply first-principles thinking to this sort of scenario. Beliefs like the demand is crazy do not just exist floating through space; they exist on top of a specific set of facts and deductions from those facts, which can be very easy to forget when a fact seems to be true for a long period of time. When the set of facts and deductions a conclusion rests on are found to be faulty, the conclusions need to be re-examined from scratch. It is not generally impossible that a fact could still end up being true, just for different reasons.
However in this specific case, it strikes me as extraordinarily unlikely. If the shortage has been manufactured, then all assumptions around demand and possible profitability have to be completely re-examined. Once the system digests this, because these things do take some time, it can cease to be a "use it or lose it" market very, very quickly, and turn incredibly quickly into a "liquidate everything you can while it still has some sort of value" because of massive, massive oversupply. What is the value of a rack of nVidia processors that nobody can turn on? What is the value of a rack of nVidia processors that nobody can turn on when there are warehouses' worth of the things? Anyone who blind operates on "it's a use it or lose it market" will lose their shirts on the transactions. "It's a use it or lose it market" is not a foundation; it is contingent on a lot of things, some of which are being shown to be false.
To be fair I did say "right now". The demand hasn't stopped quite yet.
I look forward to the next R710 where you can just buy enterprise grade servers for a few hundred bucks and as long as you have somewhere to put a hurricane level of noise, you can Just Have terabytes of memory at home. Or many-GPU in this case.
signed closed source drivers for hardware that can restrict which algorithms can be run on it locally... temporally...
edit: i'd willingly bet that AMD has a backroom deal to tank their performance and options to encourage this homogenous deployment overseas.
swallow the hook.
…. But they’re not using it? Why not buy when you’re ready?
Unless you’re convinced you’re going to be able to build faster than you can buy _in the future_ of further increased AI demand and easy painless data center construction.
This AI investment boom has always been about obsession with the exponential growth of the future, trying to get ahead of it. So absolutely they were getting as much as they could possibly have in preparation for a future where they can't get any more. They didn't wanna give up any of that ground.
If you wanted in early you’re competing against companies that have what, 1/4 of the worlds resources at their disposal, in a regulation free political environment, with the only downside being if you never get space to plug them in you can likely sell them to someone else at a profit. It’s just crypto 2.0 economics but with bigger players.
I'm sure Nvidia would have no issue selling this "avalanche" if they just dropped prices a bit
We went with AMD for our $300k AI server, then after two months of delays were told it will be delayed another 10 months. Getting the same amount of VRAM from Nvidia remains out of our budget
Meanwhile "reasonably-sized" cards like a RTX 6000 Pro Blackwell or even a consumer RTX 5080 still trade for twice what they cost in January
Honestly agreed. I would gladly switch back from AMD if Nvidia lost their multiplier over how it was a few years ago (and got rid of that new power connector). But my few thousand is nothing to Oracle and co's hundreds of billions. Even your $300k. So if the circular financing does pay off, it'll pay off big.
Yes this is 100% about stock price/perception. Every single piece of Nvidia hardware is being scalped at the moment; they must be averaging 2x MSRP, upping supply is not real problem.
Radeon AI PRO R9700 32G gpu with the recent CUDA-free LLM software... now punches way above its budget class. They are cheap as most folks haven't figured out the recent performance hacks yet.
They are still everywhere, and who cares if it takes 14 hours instead of 6 hours if the task gets done. =3
Can they afford to drop the prices without causing investor panic? Feels like Nvidia needs to constantly exceed all expectations to justify their share value. And if their share value drops, it might have a negative impact on their ability to finance their own customers, and if their customers run out of funding, they’re gonna have even more trouble shifting units.
It sure is tempting to make it seem like a plan. Nvidia had been through cyclical financial situations before, most recently with crypto mining. Jensen had had to know he was riding a tiger. I doubt he planned his exit, but he must be a little relieved. It will be interesting to see what Elon does. I don't think Elon can let go.
Most if not all dev jobs require strong AI skills now.
You can use AI to fully automate the job search and application process and spam job apps at a pace you would never be able to do by hand.
You can do a project with AI and build an AI native app that you can demo during an interview to prove you have AI skills.
It works and if you're not doing this as a dev because you think AI will just "blow over", that's not going to happen and you're just putting yourself in a weaker position every day.
I mean, even if the ship were sinking, it's not like the plan is stupid per se.
It's a neat plan. Keep prices high, circularly finance so that you still have customers, getting ownership of other firms and effectively having lower prices.
It's a superb plan for NVIDIA, and then of course, people try to get around that plan: we Europeans obviously want to be able to do AI, and if we aren't getting the circular financing will of course want to make our own chips and do our own circular financing, or at least have normal prices. Google, Amazon, etc. obviously don't want to pay with equity, so they make their own chips.
I don't think it has to be nonsense. I think it's a good plan, it's just that anybody who wants to exist or be their own thing is fighting against it as they of course should.
In the end I hope for a competitive DL accelerator market with prices 1/5th or less of what they are now. High prices tend to lead to high prices though.
I am saying the cultivated hysteria is nonsense, not that nvidia’s strategy is.
Nvidia were notorious assholes to work with 20 years ago, but people persisted in doing so because they needed to. It would not be remotely surprising if their strategies involved concepts many fond unpalatable even if highly effective.
I think the plan sounds like a normal, sound business idea which has a chance of working but which involves beating both us Europeans, Google, Amazon and many others, and I think it's plausible that it's actually what they were trying to do.
But I agree that there may be some mud slinging involved too, and I suppose I see the mud in this case as a plausible and reasonable plan over which there's internal conflict because it's a big plan that involves beating so many capable people.
I also think the plan, if it's real, is a hard plan to beat. For us Europeans to beat it, the politicians would basically have to pick capable people and tasking them with doing the technically correct thing, and I suspect that people are prodding them to do that, but that they can't tell prodding from the right person from prodding from a person who wants them to pick his guys to do it. So I think the plan still has a chance against us, and who knows whether it has a chance against the others. Maybe with lower prices.
This article inaccurately paraphrases actual journalism at the WSJ. That article does not use the word “excess” once. They can have an avalanche of wafers coming at them without it being excessive. You can make that inference but that exact statement cannot be attributed to Huang, per the actual reporting.
The actual quote from the actual article: “ Then he went on to describe the situation the company was in. Major cloud providers were running away from Nvidia, making plans to use alternative chips and lessen their reliance on the firm. Even worse, Huang said, the vast supply of chip wafers and memory Nvidia had committed to buying were coming at him like an "avalanche."”
How do you read that quote and not infer an excess?
That exact quote is also in this article, in large bold letters, unparaphrased.
Yes, that is what he is criticizing.
Good work pointing this out. One of the great things about AI is eventually people are going to learn to stop trusting these kinds of websites “it’s all AI slop” and revert back to paid journalism because while the writing can be done by AI, the research and verification largely cannot.
Or so I hope. More likely is people will continue to engage with low-quality information and come to believe all sorts of nonsense, misquotes? Conspiracy theories, and more as they always have…
Did you actually read it? How does the full quote not support the articles framing?
Journalism was always the lowest of the low of vocations. It isn't surprising that a simple robot can do it just as well as your run of the mill scribbler.
There is nothing good to go back to because there was nothing good about journalism at any point in the history of mankind.
These freaks don't actually coldly manipulate you with sensationalist headlines, they are exactly as excited to write pages about gruesome family murder as the text suggests.
Now that they compete with TikTok sending you tragedy after tragedy right into your pineal gland, it has been a rough patch to be a traditional corpse picture snatcher.
This is quite an extreme, and I think wildly disingenuous, take.
The job of a journalist is not to be a "scribe" or "scribbler".
The job is to investigate, corroborate, and report. Journalism is what has exposed corruption in governments all over the world.
To reduce a profession down to its worst participants is an action rooted in emotion over reason.
I personally put a fairly high degree of value in the 'genuine' investigative journalist you're referring to.
The more recent spate of sensationalist journalists however are less remarkable. The ones that parrot headlines from other places, or worse paraphrase to make them get more views.
"Major cloud providers where running away from Nvidia, making plans to use alternative chips and lessen their reliance on the firm"
Ouch! Sounds like they have an avalanche of excess chips coming their way and no customers to buy them.
Yeah, it's a gamimg site that has a ton of articles that seem to be really angry about RAM prices.
Part of the problem is scalpers buying up limited retail supply, and bumping prices back up.
It is the circle of clowns man... People have every right to also be annoyed with the blitz-scaling corporate collusion. =3
There seems to be some evidence of "GPUs sitting in warehouses awaiting to be plugged in". But it seems to be mostly/only Ed Zitron pushing the agenda that it's not as planned and that there is oversupply of GPUs.
All hyperscalers have in the last 2 months stated that they have more demand for AI compute (I guess GPUs & their own chips) than they can supply.
Nvidia might have been trying to spread the demand over more providers (neoclouds, and seemingly China) and provided financing to enable that.
It's not clear that this means there is an oversupply of reserved wafer capacity and Nvidia GPUs. But if datacenter construction slows down it might affect the GPU demand as they can't be plugged in.
> All hyperscalers have in the last 2 months stated that they have more demand for AI compute (I guess GPUs & their own chips) than they can supply.
That just means the price point is wrong. They might say they want to buy more racks to increase supply and increase profit, but turning away customers is not what they're doing in a market where prices turn on a dime.
> [...] pushing the agenda that it's not as planned and that there is oversupply of GPUs.
I don't read that it is not as planned, there is high demand from everyone but it appears to be similar to the over recruitment of engineers. They have FOMO, and they also want to block competitors.
> All hyperscalers have in the last 2 months stated that they have more demand for AI compute (I guess GPUs & their own chips) than they can supply.
I certainly have not had any issues getting as much access as I would like. It just costs. Which would imply that the scarcity is manufactured to drive up pricing rather than availability.
> if datacenter construction slows down it might affect the GPU demand as they can't be plugged in.
I think this is the crux of the matter from Nvidia's point of view, that's if they weren't already impacted by the power limitations for customer installations.
How much gpu compute have you been able to allocate? I know at AWS it’s quite hard to get any substantial allocation.
> I certainly have not had any issues getting as much access as I would like. It just costs.
It just costs, because demand is high, supply is low, if it was opposite, it would have been like in 2018s, you could get 128Gb RAM server from Hetzner for 50-80 EUR, now it starts at 170 EUR (3x)
I could never track Zitrons argument. I would not be surprised if there are gpus sitting around, we have known for at least the past year that hyperscalers have been unable to build enough data centers. They continue to state demand exceeding supply, that’s kind of why the neoclouds have even become a thing. It does not indicate to me that those gpus are not going to be used or even if companies overpaid for them.
The argument makes sense (but I don't know if it's based on true facts). His claim is basically that hyperscalers want, say, 1M GPUs in the next 10 years, 100k per year, since that's how many they can install. NVIDIA instead gives them a deal saying "you either buy 300k this year, or we won't sell any to you next year" - the goal being to make it look like demand is much higher than it is this year, or at least to recognize revenue much earlier than normal (since those extra 200k GPUs become revenue this year instead of being spread over the next two).
Ehhh I mean sure maybe Nvidia juiced demand for a year. Maybe hyperscalers have bought more capacity than they can use for the next 5 years. It’s possible but again it misses the demand picture. Demand has not changed and only grown. Sure there is a constraint but that will breed innovation and eventually things will come online, those that over committed will suffer.
Zitrons thesis is half baked.
It actually matters quite a bit - because it means that the picture of demand that you get from the outside may be wildly skewed. Say that it was all true that NVIDIA is secretly selling chips illegally to China and secretly forcing companies to take deliveries early (again, serious claims that I can't at all claim to know are true, and I'm not even sure I personally believe!). You come from the outside and see that it's become very hard to buy more GPUs, so you think that NVIDIA is selling all of its production to barely cover the current year's needs of the non-Chinese market, then your estimation of the total demand for GPUs is going to be off by a significant margin.
> NVIDIA is secretly selling chips illegally to China
This has always been my theory for why we see more GPU sales than we see coming online.
I do think that things like this muddy the demand signal a lot, which may have much, much broader repercussions than just Nvidia. Have Nvidia been doing enough shady stuff that they end up like Enron? Unlikely, but it's entirely possible that they end up like Cisco, still there but not back to their current stock price for ~20 years.
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Explanation not endorsement: The argument is that while end user demand for gpu compute may exceed currently online supply, for Nvidia to be able to keep the revenue up, the demand will have to exceed not just currently online supply but also the supply of gpus that have been manufactured and sold but not installed. Otherwise you get some point where neoclouds etc say “ok we have enough gpus for a long time we’re going to spend our money installing them, not buying more. And then suddenly Nvidia’s revenue drops.
Definitely get the idea what never clicks is he always uses it as a gotcha. I am not convinced there is pervasive circular financing. I am certain some entities have overcommit but based on current demand I don’t think it will be an issue for most entities. So maybe Nvidia juiced their earnings for a year or two, they will pay the price. The capacity will still come online.
I thought the argument was that Nvidia were requiring buyers to take immediate delivery of their purchase and wouldn't let them secure future parts or something like that. This was forcing hyperscalars to store their GPUs until they actually had data centers online.
This whole buildout is one of the largest construction projects ever - there will definitely be oversupply hotspots even for items that are in super short supply. I could easily imagine $1B+ of top-tier chips just sitting around in a warehouse for months on end because of difficult planning problems. That's not a sign of any sort of crisis.
There was a post about how growth in the data center space was slowing, so AI must be over. The evidence seems to be that we've reached whatever growth capacity existed or was planned, rather than any drop off in demand.
All I know is when pricing GPU systems for work, I'm getting lead times across the board of 30+ weeks. And the main wait isn't on RAM or disk or anything else, but GPU.
So I don't buy the "GPUs waiting in warehouses" thing.
They're getting stolen from trucks on the highway!
> There seems to be some evidence of "GPUs sitting in warehouses awaiting to be plugged in". But it seems to be mostly/only Ed Zitron pushing the agenda that it's not as planned and that there is oversupply of GPUs. > All hyperscalers have in the last 2 months stated that they have more demand for AI computing (I guess GPUs & their own chips) than they can supply.
The two things are not in the opposition at all. You need datacenter to plug the chip in. If you dont have the datacenter already build, you cant use the chip.
Agreed.
The question is if it's planned by the purchasers. That they have datacenter capacity coming online according to plan and any "GPUs in warehouses" is just the plan to ensure there are chips to install when the datacenters are ready.
Or that they purchased out of fear, to corner the market, or expecting datacenter capacity that is delayed; and will soon stop purchasing as they don't have datacenter capacity coming online to install the chips they already bought. And noone else neither has that datacenter capacity.
Since chips are improving and getting better each generation, warehousing for 2 years dont make much sense to me.
They will be selling better chips in 4 months.
> In an August meeting, Huang belittled Kress for questioning the deals, calling her “a deer in the headlights”. To justify why Nvidia needed to financially backstop OpenAI and smaller cloud providers to keep buying its GPUs, Huang admitted that Nvidia was caught in a massive squeeze.
Are these two sentences related? Is it saying Jensen questioned her on the circular financing? Or was she questioning him? A bit lost on that
Nobody ever listens to the CFO and they should. The one person who actually keeps a company on track is the person who looks at the actual numbers. I have seen this over and over it’s a freaking meme.
If NVIDIA kept on track, it might not be $4 trillion.
CEOs make the call, and I expect they do listen to the CFO.
The people that keep the company on track are the workers, not management
I would say the CFO keeps it on track and the workers make it all happen.
That's not how an organization works.
Depends where you work. If you work at Dinosaur org. Then yes, you will need to fill 3 documents just to move a table into the warehouse
Is there a way to buy any of this excess inventory?
Of course they were. They bought up literally as much as they could manage, because anything they didn't would be bought up by someone else. It's literally a use it or lose it market right now. This is not a problem. Just stockpile it.
"It's literally a use it or lose it market right now."
Are you sure? The point of this stockpiling was to create that impression. Now that you have data that that foundation behind that impression is manufactured and faked, you need to reconsider everything that was resting on that foundation. The demand is just so incredible needs to be reexamined from scratch now in light of the active attempts to forge that signal.
It is also worth remembering that this is a prime example of a situation that is not black or white. The absolute size of the demand, however large it may be, is not the question. It's the size relative to the supply, supply which includes all the pumping shenanigans that are coming into the light. The "AI bubble" has never been if there is demand or if the tech has real use, it has always been a relative question about if the build out could possibly make economic sense.
Given that you practically cannot buy memory or storage right now because all of the capacity is taken up by hyperscalers... even if it was a self-fulfilling prophecy, it's still currently fulfilled
That just represents the inertia of the whole system operating on old assumptions, given that it's only still early in the process of coming to light in a public way how much of the frantic purchasing has literally been sitting in a warehouse, depreciating. I mean, I've been pretty suspicious of this for literally years now, but it's been a "conspiracy theory" that this amazing demand is manufactured by a variety of financial hacks rather than just pure demand that the system as a whole has not paid attention to because number was going up, do not question number going up lest the number stop going up.
You need to apply first-principles thinking to this sort of scenario. Beliefs like the demand is crazy do not just exist floating through space; they exist on top of a specific set of facts and deductions from those facts, which can be very easy to forget when a fact seems to be true for a long period of time. When the set of facts and deductions a conclusion rests on are found to be faulty, the conclusions need to be re-examined from scratch. It is not generally impossible that a fact could still end up being true, just for different reasons.
However in this specific case, it strikes me as extraordinarily unlikely. If the shortage has been manufactured, then all assumptions around demand and possible profitability have to be completely re-examined. Once the system digests this, because these things do take some time, it can cease to be a "use it or lose it" market very, very quickly, and turn incredibly quickly into a "liquidate everything you can while it still has some sort of value" because of massive, massive oversupply. What is the value of a rack of nVidia processors that nobody can turn on? What is the value of a rack of nVidia processors that nobody can turn on when there are warehouses' worth of the things? Anyone who blind operates on "it's a use it or lose it market" will lose their shirts on the transactions. "It's a use it or lose it market" is not a foundation; it is contingent on a lot of things, some of which are being shown to be false.
To be fair I did say "right now". The demand hasn't stopped quite yet.
I look forward to the next R710 where you can just buy enterprise grade servers for a few hundred bucks and as long as you have somewhere to put a hurricane level of noise, you can Just Have terabytes of memory at home. Or many-GPU in this case.
signed closed source drivers for hardware that can restrict which algorithms can be run on it locally... temporally...
edit: i'd willingly bet that AMD has a backroom deal to tank their performance and options to encourage this homogenous deployment overseas. swallow the hook.
…. But they’re not using it? Why not buy when you’re ready?
Unless you’re convinced you’re going to be able to build faster than you can buy _in the future_ of further increased AI demand and easy painless data center construction.
This AI investment boom has always been about obsession with the exponential growth of the future, trying to get ahead of it. So absolutely they were getting as much as they could possibly have in preparation for a future where they can't get any more. They didn't wanna give up any of that ground.
If you wanted in early you’re competing against companies that have what, 1/4 of the worlds resources at their disposal, in a regulation free political environment, with the only downside being if you never get space to plug them in you can likely sell them to someone else at a profit. It’s just crypto 2.0 economics but with bigger players.
Paywall free link to the article that this article is reporting on: https://www.tovima.com/wsj/before-his-ouster-jensen-huang-be...
I'm sure Nvidia would have no issue selling this "avalanche" if they just dropped prices a bit
We went with AMD for our $300k AI server, then after two months of delays were told it will be delayed another 10 months. Getting the same amount of VRAM from Nvidia remains out of our budget
Meanwhile "reasonably-sized" cards like a RTX 6000 Pro Blackwell or even a consumer RTX 5080 still trade for twice what they cost in January
And secondarily, other chip manufacturers (e.g. hyperscalers, frontier labs, AMD) are likely interested in "purchasing" any excess wafer capacity.
Potentially less revenue and lower margins for Nvidia, but not necessarily supply they cannot get rid off.
Honestly agreed. I would gladly switch back from AMD if Nvidia lost their multiplier over how it was a few years ago (and got rid of that new power connector). But my few thousand is nothing to Oracle and co's hundreds of billions. Even your $300k. So if the circular financing does pay off, it'll pay off big.
Dropping prices would be a scary signal about demand and their stock would likely drop.
Yes this is 100% about stock price/perception. Every single piece of Nvidia hardware is being scalped at the moment; they must be averaging 2x MSRP, upping supply is not real problem.
Radeon AI PRO R9700 32G gpu with the recent CUDA-free LLM software... now punches way above its budget class. They are cheap as most folks haven't figured out the recent performance hacks yet.
They are still everywhere, and who cares if it takes 14 hours instead of 6 hours if the task gets done. =3
https://www.youtube.com/watch?v=Ty4lTwykmKY
https://www.pugetsystems.com/labs/articles/amd-radeon-ai-pro...
Can they afford to drop the prices without causing investor panic? Feels like Nvidia needs to constantly exceed all expectations to justify their share value. And if their share value drops, it might have a negative impact on their ability to finance their own customers, and if their customers run out of funding, they’re gonna have even more trouble shifting units.
Did the 'can't keep it in his trousers' crisis actually give him the perfect way out?
It sure is tempting to make it seem like a plan. Nvidia had been through cyclical financial situations before, most recently with crypto mining. Jensen had had to know he was riding a tiger. I doubt he planned his exit, but he must be a little relieved. It will be interesting to see what Elon does. I don't think Elon can let go.
If the ai bubble pops even harder, I just hope it will not bring other parts of the economy with it.
I think it should not.
I am also hoping companies would move a bit away from AI and start hiring more developers instead.
(yes I am unemployed)
Why not just learn AI? It goes hand in hand with dev work.
You can become skilled in using AI tools, sure. But that has become (very ironically) disconnected from actually landing a job.
(Unless you’re an actual, bona fide expert in specific AI/ML fields, which isn’t the same as being able to effectively use any given kind of tool.)
Most if not all dev jobs require strong AI skills now.
You can use AI to fully automate the job search and application process and spam job apps at a pace you would never be able to do by hand.
You can do a project with AI and build an AI native app that you can demo during an interview to prove you have AI skills.
It works and if you're not doing this as a dev because you think AI will just "blow over", that's not going to happen and you're just putting yourself in a weaker position every day.
I’m always surprised by this: doesn’t EVERYONE have AI skills?
r u saying there's potentially b200s sitting out there in warehouses that could be sold at 80%+ discounts ?
no, probably just contracts to build, and he's forcing his circular economics to force partners to agree to buy them at some point in the future.
There are, however, reports that there are a bunch of "dark chips" that data centers can't bring online because of missing power requirements.
Look, you can believe in some contrived conspiracy that he used to sit on a big pile of gpus like Smaug in The Hobbit.
But far simpler explanation is just supply and demand. There is no need to craft some elaborate theories when the simplest one checks all the boxes.
[dead]
Now the whole “chinese spy” angle is looking dubious we have to switch to “he was going to sink the ship anyway”.
It is all utter nonsense.
I mean, even if the ship were sinking, it's not like the plan is stupid per se.
It's a neat plan. Keep prices high, circularly finance so that you still have customers, getting ownership of other firms and effectively having lower prices.
It's a superb plan for NVIDIA, and then of course, people try to get around that plan: we Europeans obviously want to be able to do AI, and if we aren't getting the circular financing will of course want to make our own chips and do our own circular financing, or at least have normal prices. Google, Amazon, etc. obviously don't want to pay with equity, so they make their own chips.
I don't think it has to be nonsense. I think it's a good plan, it's just that anybody who wants to exist or be their own thing is fighting against it as they of course should.
In the end I hope for a competitive DL accelerator market with prices 1/5th or less of what they are now. High prices tend to lead to high prices though.
I am saying the cultivated hysteria is nonsense, not that nvidia’s strategy is.
Nvidia were notorious assholes to work with 20 years ago, but people persisted in doing so because they needed to. It would not be remotely surprising if their strategies involved concepts many fond unpalatable even if highly effective.
Ah, cultivated hysteria, but you don't per se doubt that NVIDIA tried the claimed plan?
Eh? Nvidia being hypercompetitive assholes does not mean they are simply up to whatever some random game site grifter is imagining.
This whole thing is a mud slinging exercise.
In that case I both agree and disagree.
I think the plan sounds like a normal, sound business idea which has a chance of working but which involves beating both us Europeans, Google, Amazon and many others, and I think it's plausible that it's actually what they were trying to do.
But I agree that there may be some mud slinging involved too, and I suppose I see the mud in this case as a plausible and reasonable plan over which there's internal conflict because it's a big plan that involves beating so many capable people.
I also think the plan, if it's real, is a hard plan to beat. For us Europeans to beat it, the politicians would basically have to pick capable people and tasking them with doing the technically correct thing, and I suspect that people are prodding them to do that, but that they can't tell prodding from the right person from prodding from a person who wants them to pick his guys to do it. So I think the plan still has a chance against us, and who knows whether it has a chance against the others. Maybe with lower prices.