Note that the Fed has a $6.7tn balance sheet [1]. (This is a silly comparison. But still fun.)
The real comparison: Nvidia's $500+ billion of investments and commitments [2] is substantially more than any easing the Fed has done in the same time [3]. Monetarily, Nvidia is creating a lot of money in our economy.
The good news: I have seen no evidence Nvidia has borrowed against its stock or otherwise linked its equity value to these commitments. Its stock could crash without causing–as long as its cash flows continue–a credit crisis through its investments and commitments.
It would also follow that by increasing the money supply significantly they’re also contributing to inflation a great deal correct? (Given the rest of the economy is not growing at near the same rate as the AI industry)
Maybe a dumb question but how is NVIDIA increasing the total supply of money? Only the fed can actually order more money to be "created". Private companies can only work with the existing supply, that is, their reserves, no?
I've always found it interesting when corporations start acting like public institutions. When traditionally philosophical, social contract ideas apply to things like corporate governance. Or like here, where private structures get powerful and important enough to resemble government structures.
The ideas we deal with when we discuss society and organization aren't exclusive to government, they relate to human nature in general. I wonder if in the future we will have more discussion of power and how to organize it in corporations, similar to what we discuss today about government.
I wonder when they will give up on the gaming market because that could take down several publishers and developers. I really don't think it's an if question but a when because it almost feels like an afterthought at this point (they removed the standalone gaming revenue report from the financial reports this summer). Also I don't think AMD and Intel is capable "to step in" to replace them.
AMD would step in, they where behind nvidia but they've been closing that gap for a while and the 9070XT is the current value king (in this fucked up market) for mid-high gaming and you can actually buy them.
Demand for Nvidia cards has outstripped supply even on the mid-high cards.
Nvidia had the mind share among gamers but so did Intel once, inertia only lasts so long they've thoroughly been intent on burning that to the ground for a while.
If RDNA5 is good (and four was it closed the gap on RT) they'll been in a solid place to take the spot if Nvidia do cede the ground.
I have a 7900XTX the last flagship card AMD did and it has been and is a stellar card for gaming (let down only if you care about RT and the games I play don't have it).
> I really don't think it's an if question but a when because it almost feels like an afterthought
I feel your reasoning is very weird. Are they losing money by selling consumer GPU? Just because the profit isn't that much compared to AI it doesn't mean that it's negative, and for-profit companies are not known for leaving money on the table. Apple doesn't reveal how much Apple TV+ makes for them either but I don't see it be gone anytime soon.
NVidia is limited by the number of chips they can produce.
If you can fab 1000 chips, and can sell some for $500 and some for $80000 what are you going to do?
The game GPU is at once profitable, but causes them to give up far more profits than they're gaining from it.
They're maintaining the game market to have multiple markets and not go all in, but it's strategic hedging at this point. When NVidia makes a gaming GPU instead of a data center GPU they are leaving money on the table in the short term since they're constrained at the fab level.
Nvidia is limited by the number of engineers they have. It might turn out that the AI market is so lucrative that it’s best to reallocate their gaming-focused engineers to AI.
Apple TV is at least a growth market for them, whereas gaming is sort of capped and clearly a tiny piece of nvidia’s revenue atm.
Which is distinctly different both in purpose and technology than the previous versions. DLSS 5 is no longer about frame improvements. It’s about increasing graphical fidelity with active AI rendering.
DLSS 5 is trying to relight and retexture the scene using AI. DLSS 4 is just trying to take a lower quality image and upscale it using AI
> Also I don't think AMD and Intel is capable "to step in" to replace them.
It's kind of weird. nVidia kind of has the PC market cornered, but AMD has had the last couple of generations of Xbox and Playstation. Also, they power the Steam Deck/Machine, and Valve has been contributing a lot of AMD graphics features into the Linux drivers. There is a world where AMD (and maybe even Linux on AMD specifically) becomes the de facto standard for gaming.
Maybe this is silly of me, but maybe gaming would enjoy an era of hardware upgrades being rather unviable so the focus turns to optimization and aesthetic.
It will be interesting times but I don't think anyone will enjoy a plateau because it's expensive. Even replacing existing hardware is expensive now. Hardly enjoyabe.
It’s not silly. games use far more hardware than they really need. It also pushes out release dates of aggressive console schedules like ps6 because even if it’s a massive upgrade and you have IP locked into your console, no one is going to pay $4000 to play a game like wolverine.
A retraction from the gaming market wouldn't necessarily mean they'd still even produce the current crop of products. I could (and I would argue would) involve a complete shuttering of the GeForce brand, halting current production. On the assumption that Intel and AMD would follow, that wouldn't be an end of upgrades, but an end to the market.
Gaming is a larger market than Hollywood. Maybe it becomes a distraction for Nvidia, but someone will step in. That might actually be a good thing and why Nvidia wont do that: it creates an under served market in which newcomers can cut their teeth.
That seems a bit overzealous, most consoles[0] run on AMD chips today.
Both PS 5 and Xbox are based on AMD APUs and both serve the AAA market quite well. GTA 6, Assassin's Creed and CoD are probably good enough indicators that the performance is enough, even if there is always room for more (as PC ports show). The PC market will also probably be fine even if stagnation in perfomance gains has been creeping in for a few years now.
[0]: except Nintendo which relies on NVIDIA although their APU there focuses more on efficiency than top performance.
You must not be paying attention, they already have.
Intel is going nowhere but we all knew that anyways.
And again, you must not be paying attention, AMD is doing exactly what they said they would. No flagship for RDNA4 (just like RDNA2), RDNA5 flagship (10900 XT) coming right on schedule
It's still a 15B market for Nvidia, it's not nothing. But I'm curious how they're going to turn Rubin into a gaming GPU. I think at this point consumer GPU upgrades are going to be AI-related upgrades that happen to also help raster capabilities. Blackwell was already kind of a dud on performance uplift from Ada beyond the new LLM features.
I think they'll keep the gaming market alive for a while because renting gaming hardware from the cloud (GeForce NOW) is very congruous with AI keeping consumer hardware prices sky-high.
It continues modern trend of chow companies don't want consumers to truly own anything. Finance a car, pay a monthly subscription fee for heated seats, rent a phone, stream a movie, get rid of physical media, rent a GPU.
But if GeForce NOW doesn't take off, and they get convinced that the AI bubble will not pop, I could see them pulling a Micron and ending their consumer product lines.
> I really don't think it's an if question but a when
Nvidia still will ship gaming products. The upcoming RTX Spark laptop APUs are still gaming-capable - we also have Blackwell gaming GPUs and the Nvidia-powered Nintendo Switch 2.
People echoed this sentiment during the crypto mining crunch, and we still got gaming hardware designs after that blew over. One of CUDA's core value props is the consumer market, and Nvidia probably won't surrender it unless hardware becomes unreasonably scarce.
I don't think crypto is comparable. They barely made some dedicated crypto GPUs that market was always fickle due to ASCIs.
Look at the nvidia revenue breakdown chart, the AI boom looks quite different.
The GPU crunch came because cards like the 3060 were extremely cheap and could outrun most sub-$1000 ASICs at the time. The dedicated crypto GPUs were too-little too-late; hundreds of thousands of ordinary CUDA-capable GPUs had already been repurposed for mining by the time they launched.
They may allocate different number of resources every year based on market conditions but they'll never give up on gaming, that would be extremely silly.
The Japanese economy and yen carry trade is a close second.Rising oul prices and reduced output due to the conflicts in the Middle East could filter through to increasing yields on Japanese debt. In turn, the yen interventions have to continue to keep it lower than 160, which seems to be the psychological barrier for the yen carry trade.
Realistically, they're worse than a central bank, because they can't exactly expand supply monotonically like a normal central bank. Nor do they realistically control rates.
Okay, but at some point these investments need to start turning profits; the financing NVDA has arranged is temporary, and private credit needs returns at some point. The overinvestment in AI will lead to a downturn in the capital cycle.
Imagine a scenario where the AI bubble bursts and AI companies and neoclouds go bankrupt en masse, and then a huge rebound occurs when AI has a delayed takeoff. Nvidia ends up with a massive amount of compute on its hands from its backstop deals, and it also owns assets from failed companies when profits start to grow. New startups running using Hugging take the place of OpenAI and Anthropic when their compute assets are divided between survivors like Nvidia, Microsoft, Alphabet, Meta.
If/when there is an AI crash, any number of small startups can buy compute for the price of electricity without anyone wanting to buy them. That is when the real innovation happens. The top of the hype cycle is usually more about getting rich quick and buying and shutting down competition.
While I dislike this take, when the dust settles we will have compute clusters orders of magnitude larger than anything that existed in 2023.
If demand vanishes for the 3 million cards Amazon just bought, then something will be done with them. The AI market may end up in a bizarre jepson's paradox of rotation between inference use cases and model training.
I find "bro" and "dudebro" to be such fascinating slurs. The previous incarnation was "neckbeard" / "obese dude living in mom's basement", so "dudebro" comes across almost like a compliment.
I think we can go even further and say that IBM, Zeiss, several Japanese companies, and even the US Department of Energy are the actual foundation since ASML is largely just an integrator of many different technologies they license from elsewhere.
Note that the Fed has a $6.7tn balance sheet [1]. (This is a silly comparison. But still fun.)
The real comparison: Nvidia's $500+ billion of investments and commitments [2] is substantially more than any easing the Fed has done in the same time [3]. Monetarily, Nvidia is creating a lot of money in our economy.
The good news: I have seen no evidence Nvidia has borrowed against its stock or otherwise linked its equity value to these commitments. Its stock could crash without causing–as long as its cash flows continue–a credit crisis through its investments and commitments.
[1] https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
[2] https://www.sec.gov/Archives/edgar/data/1045810/000104581026...
[3] https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
The ideas we deal with when we discuss society and organization aren't exclusive to government, they relate to human nature in general. I wonder if in the future we will have more discussion of power and how to organize it in corporations, similar to what we discuss today about government.
Demand for Nvidia cards has outstripped supply even on the mid-high cards.
Nvidia had the mind share among gamers but so did Intel once, inertia only lasts so long they've thoroughly been intent on burning that to the ground for a while.
If RDNA5 is good (and four was it closed the gap on RT) they'll been in a solid place to take the spot if Nvidia do cede the ground.
I have a 7900XTX the last flagship card AMD did and it has been and is a stellar card for gaming (let down only if you care about RT and the games I play don't have it).
> I really don't think it's an if question but a when because it almost feels like an afterthought
I feel your reasoning is very weird. Are they losing money by selling consumer GPU? Just because the profit isn't that much compared to AI it doesn't mean that it's negative, and for-profit companies are not known for leaving money on the table. Apple doesn't reveal how much Apple TV+ makes for them either but I don't see it be gone anytime soon.
If you can fab 1000 chips, and can sell some for $500 and some for $80000 what are you going to do?
The game GPU is at once profitable, but causes them to give up far more profits than they're gaining from it.
They're maintaining the game market to have multiple markets and not go all in, but it's strategic hedging at this point. When NVidia makes a gaming GPU instead of a data center GPU they are leaving money on the table in the short term since they're constrained at the fab level.
Apple TV is at least a growth market for them, whereas gaming is sort of capped and clearly a tiny piece of nvidia’s revenue atm.
DLSS 5 is trying to relight and retexture the scene using AI. DLSS 4 is just trying to take a lower quality image and upscale it using AI
It's kind of weird. nVidia kind of has the PC market cornered, but AMD has had the last couple of generations of Xbox and Playstation. Also, they power the Steam Deck/Machine, and Valve has been contributing a lot of AMD graphics features into the Linux drivers. There is a world where AMD (and maybe even Linux on AMD specifically) becomes the de facto standard for gaming.
Both PS 5 and Xbox are based on AMD APUs and both serve the AAA market quite well. GTA 6, Assassin's Creed and CoD are probably good enough indicators that the performance is enough, even if there is always room for more (as PC ports show). The PC market will also probably be fine even if stagnation in perfomance gains has been creeping in for a few years now.
[0]: except Nintendo which relies on NVIDIA although their APU there focuses more on efficiency than top performance.
Intel is going nowhere but we all knew that anyways.
And again, you must not be paying attention, AMD is doing exactly what they said they would. No flagship for RDNA4 (just like RDNA2), RDNA5 flagship (10900 XT) coming right on schedule
And it’s maybe 5-10% of their revenue at lower profit margins.
Consumer cards just don’t matter very much to nVidia anymore.
In 2020 it was half of their revenue.
It continues modern trend of chow companies don't want consumers to truly own anything. Finance a car, pay a monthly subscription fee for heated seats, rent a phone, stream a movie, get rid of physical media, rent a GPU.
But if GeForce NOW doesn't take off, and they get convinced that the AI bubble will not pop, I could see them pulling a Micron and ending their consumer product lines.
Nvidia still will ship gaming products. The upcoming RTX Spark laptop APUs are still gaming-capable - we also have Blackwell gaming GPUs and the Nvidia-powered Nintendo Switch 2.
People echoed this sentiment during the crypto mining crunch, and we still got gaming hardware designs after that blew over. One of CUDA's core value props is the consumer market, and Nvidia probably won't surrender it unless hardware becomes unreasonably scarce.
https://ourworldindata.org/data-insights/nvidias-revenue-fro...
The GPU crunch came because cards like the 3060 were extremely cheap and could outrun most sub-$1000 ASICs at the time. The dedicated crypto GPUs were too-little too-late; hundreds of thousands of ordinary CUDA-capable GPUs had already been repurposed for mining by the time they launched.
Everything influences each other with varying gravitational pull
At one point the mental model was more like a web, but spacetime with mass matches the model more closely
Realistically, they're worse than a central bank, because they can't exactly expand supply monotonically like a normal central bank. Nor do they realistically control rates.
https://en.wikipedia.org/wiki/Islamic_banking_and_finance
Imagine a scenario where the AI bubble bursts and AI companies and neoclouds go bankrupt en masse, and then a huge rebound occurs when AI has a delayed takeoff. Nvidia ends up with a massive amount of compute on its hands from its backstop deals, and it also owns assets from failed companies when profits start to grow. New startups running using Hugging take the place of OpenAI and Anthropic when their compute assets are divided between survivors like Nvidia, Microsoft, Alphabet, Meta.
If/when there is an AI crash, any number of small startups can buy compute for the price of electricity without anyone wanting to buy them. That is when the real innovation happens. The top of the hype cycle is usually more about getting rich quick and buying and shutting down competition.
Nvidia booked $496 million in interest income in Q2 alone [1].
[1] https://www.sec.gov/Archives/edgar/data/1045810/000104581026... page 15
If demand vanishes for the 3 million cards Amazon just bought, then something will be done with them. The AI market may end up in a bizarre jepson's paradox of rotation between inference use cases and model training.
The mint?
The material cement that allows chips to exist above it.
And the platform is made of time: ours.
Let’s look to the past:
https://www.history.com/articles/1929-stock-market-crash-war...