I am skeptical of this because they can’t just scale up data centers on a dime. And signaling that they are trying to become the new biggest hyperscaler would be risky for their existing sales: big tech and frontier labs will go even harder for custom chips than they are now.
To make this happen Nvidia would probably need to partner with neoclouds like CoreWeave that have weaker affiliations with frontier labs. Nvidia is actively incubating neoclouds and does have very strong relationships here, to be sure, but the neoclouds still have fewer data centers and less technical expertise than the more established hyperscalers.
And I think algorithms and talent are very important.
And signaling that they are trying to become the biggest new hyperscaler would be risky for their existing sales: big tech and frontier labs will go even harder for custom chips than they are now.
In the world that I see Bogdan as pointing to, ‘when AI becomes much more valuable because it can replace larger portions of human workers’, I’d expect revenue from supplying AGIs to strongly outweigh revenue from chip sales.
I’m saying it would be challenging for Nvidia to preserve its high share of AI compute production in the first place while trying to execute this strategy. Nvidia is fabless, and its dominance will erode if labs/hyperscalers/Broadcom create satisfactory designs and are willing to place sufficient large orders with TSMC.
Nvidia already has an AI cloud division that is not negligible but small compared to the big players. But they appear to not even own their own chips: they lease from Oracle.
I am skeptical of this because they can’t just scale up data centers on a dime. And signaling that they are trying to become the new biggest hyperscaler would be risky for their existing sales: big tech and frontier labs will go even harder for custom chips than they are now.
To make this happen Nvidia would probably need to partner with neoclouds like CoreWeave that have weaker affiliations with frontier labs. Nvidia is actively incubating neoclouds and does have very strong relationships here, to be sure, but the neoclouds still have fewer data centers and less technical expertise than the more established hyperscalers.
And I think algorithms and talent are very important.
In the world that I see Bogdan as pointing to, ‘when AI becomes much more valuable because it can replace larger portions of human workers’, I’d expect revenue from supplying AGIs to strongly outweigh revenue from chip sales.EDIT: I misunderstood Josh’s point.
I’m saying it would be challenging for Nvidia to preserve its high share of AI compute production in the first place while trying to execute this strategy. Nvidia is fabless, and its dominance will erode if labs/hyperscalers/Broadcom create satisfactory designs and are willing to place sufficient large orders with TSMC.
Got it! I misunderstood you.
Nvidia already has an AI cloud division that is not negligible but small compared to the big players. But they appear to not even own their own chips: they lease from Oracle.