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387 points reaperducer | 8 comments | | HN request time: 0.22s | source | bottom
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vmg12 ◴[] No.45772274[source]
Here is a charitable perspective on what's happening:

- Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally.

- Nvidia instead invests in other companies that use their gpus by providing them deals that must be spent on nvidia products.

- This accelerates the growth of these companies, drives further lock in to nvidia's platform, and gives nvidia an equity stake in these companies.

- Since growth for these companies is accelerated, future revenue will be brought forward for nvidia and since these investments must be spent on nvidia gpus it drives further lock in to their platform.

- Nvidia also benefits from growth due to the equity they own.

This is all dependent on token economics being or becoming profitable. Everything seems to indicate that once the models are trained, they are extremely profitable and that training is the big money drain. If these models become massively profitable (or at least break even) then I don't see how this doesn't benefit Nvidia massively.

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moogly ◴[] No.45775007[source]
> Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally.

Here's an idea: they could make actual GPUs used for games affordable again, and not have Jensen Huang lie on stage about their performance to justify their astronomical prices. Sure, companies might want to buy them for ML/AI and crash the market again but I'm sure a company of their caliber could solve that if they _really_ wanted to.

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HDThoreaun ◴[] No.45775071[source]
Why would they want to do that? The only sector that matter to nvidia is datacenter, its where 90%+ of their profits are. Making their consumer sector even less profitable just seems like a waste of time
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1. moogly ◴[] No.45776969[source]
How about positive mindshare? Regular people not growing up absolutely hating nvidia's guts and only begrudgingly buying their products. Also ensuring that a pretty big industry won't die from becoming too expensive.

Plus, diversification is good for when the bubble inevitably bursts.

But that's long-term thinking and we can't have that. People give Huang credit for having had a long-term vision on AI, but it feels like he definitely has blinders on right now.

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2. senordevnyc ◴[] No.45777258[source]
The consumer gaming card market is minuscule in comparison to their primary market now, to the point where worrying about diversifying there probably doesn’t make sense. Nor does it really matter whether consumer gamers hate them. That is likely to have zero effect on their core customer now.
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3. Eisenstein ◴[] No.45777433[source]
Underestimating compounding and secondary effects, especially while rationalizing the abandonment of their core market and capability is one of the most famous ways that big companies provide evidence of their downward spiral. I can feel the MBA energy from here.
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4. senordevnyc ◴[] No.45777588{3}[source]
Can you name any companies that suffered by switching focus away from one market where they dominate in order to also dominate a market that is 10x the size of the first market already, and growing faster?
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5. ◴[] No.45778106{4}[source]
6. Eisenstein ◴[] No.45778180{4}[source]
Every specific situation is different, but the pattern I mentioned is easy to find. Here are three examples: RCA, GE, HP.
7. creer ◴[] No.45778331[source]
> How about positive mindshare?

Does anyone who can afford an nvidia card actually buy something else? Yes some people hate nvidia, but it's not like they have a hard time selling cards.

8. rangestransform ◴[] No.45785786[source]
CUDA is where it is today because some years ago, people in grad school screwed around with CUDA on their personal gaming PCs