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Comment by matwood | Hacker News Reader

It's not about unseating. When NVDAs revenues are so concentrated from just a few customers, it only takes one to slow down and NVDAs multiple will contract.

https://finance.yahoo.com/news/single-customer-made-19-nvidi...

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NVDA is making out like a bandit because they are selling the shovels (graphics cards) in this goldrush.

MSFT is hosting and investing in Open AI, but other than offering AI in Azure and O356 products, what is the business model and future for AI?

GOOG, META, and TSLA now have their own AI LLMs and chat gpts, but only GOOG has sort of a plan for AI, which is to replace search with it.

AMZN is the only competitor to Open AI and MSFT with Claude.

Again, what is the business model and plan for revenue?

I don't think google has a plan, I think its panicing.

Meta is sorta trying to make an AI assistant that lives on your glasses. I'm not sure they are going to make it practical before instgram dies.

I think this is a really poor analysis of both plans. Google and Meta have had AI-specific research labs for almost a decade now; TPUs, Llama and Tensorflow/Pytorch didn't materialize from nothing. They were part of a long-term, dedicated plan to explore AI capabilities. Both Google and Meta have Github accounts with thousands of open-source AI experiments.

You don't have to ascribe a business strategy to that any more than you ascribe a business strategy to whatever wack technology Apple patents next. These companies are using their R&D to test new technology, it's not hard to believe they do it for kicks since they already write-off hundreds of non-product developments a year.

You're making my point. If any of META, GOOG, AMZN, or MSFT decide maybe they can spend 20% less on GPUs, then NVDA will take a huge hit. It's not going to destroy NVDA or signal the end of LLMs, but will quickly put a damper on NVDAs multiple.

Or GOOG just uses their own chips: https://www.techradar.com/pro/google-is-rapidly-turning-into...

Exactly. Same with Meta.

Isn't Nvidia overbooked though? If a few of their customers bail, who's to say that others won't take their place?

Sure, but overbooked leads to pricing power (there's also the question of who has billions to spend on GPUs). Stock price is about growth multiple, and NVDA is priced for perfection. Some say they are already priced for what's next after AI.

hardware sales to datacenters is cyclical.

80% datacenter sales are to less than 8 customers.

marginal buyers - coreweave and xai are funded with speculative monies to the tune of $15B

so, expect pain.

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