I still think NVIDIA is a bad bet--where is their moat in the long term? Doesn't the sort of work NVIDIA engineers do look vulnerable to AI-assisted automation? NVIDIA engineers code against a well-defined test suite/specification, right?
Their moat is cuda and cuda libraries and everything built on top.
When a new architecture drops, it's always PyTorch running on CUDA, other PyTorch backends are best effort, even if they reach feature parity, many industry power users went closer to the metal to squeeze performance and that stuff is too specific to Nvidia stuff.
if there is something that will beat Nvidia, it won't be something reaching feature parity with slightly better economics (like AMD, also Nvidia could just reduce their margins), it needs to be a novel approach worth rewriting the codebase for (maybe Cerebras, maybe a new player).
At some point there will be models that are ‘good enough’ and run on chinese chips, mobile processors, and run of the mill chips from Apple. Whether this is a one bit ternary model, innovations to limit the size of the context, or something else it is coming. The balance has already shifted to making these systems less
resource intensive which is a clear need based on the enormous data center cost.
I don't understand why AMD can't offer a drop-in replacement for cuda which implements an identical API.
How much actual diversity is there among standard AI workloads? I would expect this is an 80/20 thing where 80% of the workload uses 20% of the features.
The most reasonable story you can tell for a nVidia moat is their know-how in designing datacenter-scale hardware and getting it fabbed and deployed. That's inherently hard to replicate. CUDA itself can be replicated in theory (it's basically just a compute API) but that turns out not to be worth it since the nVidia ecosystem really is higher quality for the cost.
I admit I'm not too knowledgeable about the semiconductor industry. But it seems to me that there two likely scenarios: AI Bear or AI Bull.
In the AI Bear scenario, NVIDIA is obviously overvalued.
In the AI Bull scenario, we get full automation of software engineering. With "just a few clicks", an AMD employee can extract and replicate whatever subset of the spec is needed for AI workloads. Didn't the Google vs Oracle case find that copying an API can be fair use? And NVIDIA's patents haven't stopped Google from training on TPUs have they?
Prices for both companies are already very forward looking, and assume best case scenario of insane growth for at least a decade while assuming no risk or competition.
But tech is also one of the fields that is more prone to disruption.
Nvidia is consistently one product away from it's competitors to eat highly into their margins.
Google may have a stronger moat. No company in Italy I'm aware of is using anything but copilot or Gemini/notebooklm (talking legal, insurance, etc, not tech) because they are natural extension to the cloud and Microsoft 365 existing plans.
Recency bias seem to push investors to ignore those risks and plenty reason like you: they use recent hindsight to project future growth.
There isn’t in time what will happen is that they will be designed around be it the Chinese or someone else, see Intel another company that will also be designed around will be ASML its just a matter of time.
I have a suspicion that when China will roll out their NVIDIA capable chips - and that is a question of when, not if - NVIDIA stock will plummet as it is heavily overvalued atm.
I still think NVIDIA is a bad bet--where is their moat in the long term? Doesn't the sort of work NVIDIA engineers do look vulnerable to AI-assisted automation? NVIDIA engineers code against a well-defined test suite/specification, right?
Their moat is cuda and cuda libraries and everything built on top.
When a new architecture drops, it's always PyTorch running on CUDA, other PyTorch backends are best effort, even if they reach feature parity, many industry power users went closer to the metal to squeeze performance and that stuff is too specific to Nvidia stuff.
if there is something that will beat Nvidia, it won't be something reaching feature parity with slightly better economics (like AMD, also Nvidia could just reduce their margins), it needs to be a novel approach worth rewriting the codebase for (maybe Cerebras, maybe a new player).
At some point there will be models that are ‘good enough’ and run on chinese chips, mobile processors, and run of the mill chips from Apple. Whether this is a one bit ternary model, innovations to limit the size of the context, or something else it is coming. The balance has already shifted to making these systems less resource intensive which is a clear need based on the enormous data center cost.
I don't understand why AMD can't offer a drop-in replacement for cuda which implements an identical API.
How much actual diversity is there among standard AI workloads? I would expect this is an 80/20 thing where 80% of the workload uses 20% of the features.
>Nvidia could just reduce their margins
Commoditization is great for stock prices ;-)
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The most reasonable story you can tell for a nVidia moat is their know-how in designing datacenter-scale hardware and getting it fabbed and deployed. That's inherently hard to replicate. CUDA itself can be replicated in theory (it's basically just a compute API) but that turns out not to be worth it since the nVidia ecosystem really is higher quality for the cost.
AMD should have been ideally placed to compete with them, and haven't.
> NVIDIA engineers code against a well-defined test suite/specification, right?
The spec is the value. And the patents.
I admit I'm not too knowledgeable about the semiconductor industry. But it seems to me that there two likely scenarios: AI Bear or AI Bull.
In the AI Bear scenario, NVIDIA is obviously overvalued.
In the AI Bull scenario, we get full automation of software engineering. With "just a few clicks", an AMD employee can extract and replicate whatever subset of the spec is needed for AI workloads. Didn't the Google vs Oracle case find that copying an API can be fair use? And NVIDIA's patents haven't stopped Google from training on TPUs have they?
I dont think that holds since the core cuda toolkit is proprietary
You are probably too late for both. But if you buy the AGI line, then yeah, those are the ones to go to.
Im more into buying Shovels. NVIDIA is arguably one of them, and I already have some.
But I recently added POET, CBRS and similar. I think whatever happens, "shovel sellers" will be the main winners in this bubble.
They will exist, but at what valuation? Can NVIDIA really continue to raise?
Google is a lot more recession proof than NVIDIA is my intuition here
Google the ads company? That's not very recession proof.
Prices for both companies are already very forward looking, and assume best case scenario of insane growth for at least a decade while assuming no risk or competition.
But tech is also one of the fields that is more prone to disruption.
Nvidia is consistently one product away from it's competitors to eat highly into their margins.
Google may have a stronger moat. No company in Italy I'm aware of is using anything but copilot or Gemini/notebooklm (talking legal, insurance, etc, not tech) because they are natural extension to the cloud and Microsoft 365 existing plans.
Recency bias seem to push investors to ignore those risks and plenty reason like you: they use recent hindsight to project future growth.
I think that NVIDIA is quite risky. I still don't understand what is their moat. There is nothing in their hardware to make them irreplaceable.
There isn’t in time what will happen is that they will be designed around be it the Chinese or someone else, see Intel another company that will also be designed around will be ASML its just a matter of time.
I have a suspicion that when China will roll out their NVIDIA capable chips - and that is a question of when, not if - NVIDIA stock will plummet as it is heavily overvalued atm.