They would be insane to prop up OpenAI beyond at cost hardware or cuda integration support / tooling.
The steam is running out on funding. It was a one time event, like crypto.
They will regress to what they were before. Pushing horridly overpriced workstation cards and price gouging gamers and pumping out substandard garbage cards for prebuilt “gaming” pcs assembled by others with a shitload of flashy lights and no substance.
You can bet they will continue to develop proprietary standards akin to Sony to try and accomplish another big win that makes them quadrillionaires.
They have already leveraged their stock beyond their entire pre-AI market cap. There is no return to the old days now. If the AI boom goes bust on them, they have left themselves impossibly exposed. They will owe more money than they can possibly pay back.
They took what should have been a slam dunk to sell shovels for a gold rush with a nice fallback to previous viable business into an existential threat to their business.
I think a good non-tech comparison is moderna. They made a shitload of cash from covid vaccines being state subsidized and then once the initial backlog of orders cleared they reduced to next to no cash flow. They’re still better off than they were before (and nvidia will be too, there will always be some demand… but not years of backorders.) Moderna is still downsizing heavily though and can only have more layoffs unless something changes.
I’d say they will end up around 2-4x their original revenue, in ~5 years.
Let’s say the COVID vaccinne triggered a whole lot of new pharmarcies that specialized only in vacinnes. Still good news for Moderna. Except those new pharmacies can’t quite afford the vaccines they set up their business to work in. Moderna’s stock is so high though, that they can leverage that stock to get money to invest in those new pharmacies to give them money so they can buy the vacinnes.
Then the pandemic passes and those pharmacies have no business and fold and their market cap collapses to zero and Moderna spent a bunch of money they didn’t actually have on now worthless equity, and their revenue and perceived value drops back to pre-bubble levels. Except even lower because they incurred liabilities that they didn’t have pre-bubble.
For the crypto bubble, nVidia went out of their way to keep their financials out of it. But for AI they’ve been giving their biggest customers the money they need to buy nVidia’s product. Basically a cyclone of big top line numbers self-funded but enough to drive the markets wild for nVidia stock. The big players have likely already ensured billions of more secure assets that won’t pop as hard and so “why not?” to play with the extra ‘free’ money to see how big the numbers can go.
They would be insane to prop up OpenAI beyond at cost hardware or cuda integration support / tooling.
The steam is running out on funding. It was a one time event, like crypto.
They will regress to what they were before. Pushing horridly overpriced workstation cards and price gouging gamers and pumping out substandard garbage cards for prebuilt “gaming” pcs assembled by others with a shitload of flashy lights and no substance.
You can bet they will continue to develop proprietary standards akin to Sony to try and accomplish another big win that makes them quadrillionaires.
They have already leveraged their stock beyond their entire pre-AI market cap. There is no return to the old days now. If the AI boom goes bust on them, they have left themselves impossibly exposed. They will owe more money than they can possibly pay back.
They took what should have been a slam dunk to sell shovels for a gold rush with a nice fallback to previous viable business into an existential threat to their business.
I think a good non-tech comparison is moderna. They made a shitload of cash from covid vaccines being state subsidized and then once the initial backlog of orders cleared they reduced to next to no cash flow. They’re still better off than they were before (and nvidia will be too, there will always be some demand… but not years of backorders.) Moderna is still downsizing heavily though and can only have more layoffs unless something changes.
I’d say they will end up around 2-4x their original revenue, in ~5 years.
But then there are the differences.
Let’s say the COVID vaccinne triggered a whole lot of new pharmarcies that specialized only in vacinnes. Still good news for Moderna. Except those new pharmacies can’t quite afford the vaccines they set up their business to work in. Moderna’s stock is so high though, that they can leverage that stock to get money to invest in those new pharmacies to give them money so they can buy the vacinnes.
Then the pandemic passes and those pharmacies have no business and fold and their market cap collapses to zero and Moderna spent a bunch of money they didn’t actually have on now worthless equity, and their revenue and perceived value drops back to pre-bubble levels. Except even lower because they incurred liabilities that they didn’t have pre-bubble.
For the crypto bubble, nVidia went out of their way to keep their financials out of it. But for AI they’ve been giving their biggest customers the money they need to buy nVidia’s product. Basically a cyclone of big top line numbers self-funded but enough to drive the markets wild for nVidia stock. The big players have likely already ensured billions of more secure assets that won’t pop as hard and so “why not?” to play with the extra ‘free’ money to see how big the numbers can go.