But the trillion dollar valued Nvidia…
I’m not sure, these companies are building data centers with so many gpus that they have to be geo located with respect to the power grid because if it were all done in one place it would take the grid down.
And they are just building more.
But the company doesn’t have the money. Stock value means investor valuation, not company funds.
Once a company goes public for the very first time, it’s getting money into its account, but from then on forward, that’s just investors speculating and hoping on a nice return when they sell again.
Of course there should be some correlation between the company’s profitability and the stock price, so ideally they do have quite some money, but in an investment craze like this, the correlation is far from 1:1. So whether they can still afford to build the data centers remains to be seen.
They’re not building them for themselves, they’re selling GPU time and SuperPods. Their valuation is because there’s STILL a lineup a mile long for their flagship GPUs. I get that people think AI is a fad, and it’s public form may be, but there’s thousands of GPU powered projects going on behind closed doors that are going to consume whatever GPUs get made for a long time.
Yeah, someone else commented with their financials and they look really good, so while I certainly agree that they are overvalued because we are in an AI training bubble, I don’t see it popping for a few years, especially given that they are selling the shovels. every big player in the space is set on orders of magnitude of additional compute for the next 2 years or more. It doesn’t matter if the company they sold gpus to fails if they already sold them. Something big that unexpected would have to happen to upset that trajectory right now and I don’t see it because companies are in the exploratory stage of ai tech so no one knows what doesn’t work until they get the computer they need. I could be wrong, but that’s what I see as a watcher of ai news channels on YouTube.
The co founder of open AI just got a billion dollars for his new 3 month old AI start up. They are going to spend that money on talent and compute. X just announced a data center with 100,000 gpus for grok2 and plans to build the largest in the world I think? But that’s Elon, so grains of salt and all that are required there. Nvidia are working with robotics companies to make AI that can train robots virtually to do a task and in the real world a robot will succeed first try. No more Boston dynamics abuse compilation videos. Right now agentic ai workflow is supposed to be the next step, so there will be overseer ai algorithms to develop and train.
All that is to say there is a ton of work that requires compute for the next few years.
{Opinion here} – I feel like a lot of people are seeing grifters and a wobbly gpt4o launch and calling the game too soon. It takes time to deliver the next product when it’s a new invention in its infancy and the training parameters are scaling nearly logarithmically from gen to gen.
I’m sure the structuring of payment for the compute devices isn’t as simple as my purchase of a gaming GPU from microcenter, but Nvidia are still financially sound. I could see a lot of companies suffering from this long term but nvidia will be The player in AI compute, whatever that looks like, so they are going to bounce back and be fine.
I think they’re going to be bankrupt within 5 years. They have way too much invested in this bubble.
NVIDIA uses of AI technology aren’t going to pop, things like DLSS are here to stay. The value of the company and their sales are inflated by the bubble, but the core technology of NVIDIA is applicable way beyond the chat bot hype.
Bubbles don’t mean there’s no underlying value. The dot com bubble didn’t take down the internet.
I highly doubt that. If the AI bubble pops, they’ll probably be worth a lot less relative to other tech companies, but hardly bankrupt. They still have a very strong GPU business, they probably have an agreement with Nintendo on the next Switch (like they did with the OG Switch), and they could probably repurpose the AI tech in a lot of different ways, not to mention various other projects where they package GPUs into SOCs.
