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Comment by nijave | Hacker News Reader

I talked to someone at Nvidia ~2019 or ~2020 and their plan at the time was to completely vertically integrate and sell compute as a service via their own managed data centers with their own software, drivers, firmware, and hardware so this seems like just another incremental step in that direction.

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Maybe in 2019, but I find it hard to believe nvidia looks at google’s TPU business model enviously these days.

Are TPU’s a bad business model?

Customers are increasingly wary of building their business on someone else's land because they've seen it happen too many times that once you're locked in the price goes up, or the company who is now your only viable supplier decides to enter your own market.

And at least if anyone can buy the hardware you'll have your own or have multiple competing providers you can lease it from. If you can only lease it and only from one company, who would want to touch that? It's like purposely walking into a trap.

This might be the source of the AI bubble burst, just like the 2000 bubble. Eventually someone's gonna raise the price to cover a bill and suddenly everyone looks at actual revenue and power bills , calculates within 6 months they'll not get their MBA turnip squeezed bonus and walk away

Lock-in is a valid concern, but on the other hand, for many apps, it seems like this can be fairly easily mitigated? If you can swap in a different LLM, I don't think it matters if it's running on Google TPU's or NVidia?

Meanwhile, at the hardware level, TPU's provide some competition for NVidia.

But then what's the case for making them Google-exclusive instead of selling the hardware to anyone who wants to buy one?

That's one way to arrive at an IBM Mainframe like model I guess.

It'll work until you can buy comparable expansion cards for open systems (if history is any guide).

Yep, tech is incredibly circular. Once Nvidia gets there is highly probable that "disruptive" competition will apear due to mere desire/pressure for more freedom and options (and knowing NVDA, also costs).

AMD is already knocking on the same door. If they had focused more on drivers it'd be an equal comparison.

> vertically integrate

Sounds like they are going the Apple way. How long until we have to pay 30% to get our apps in their AI-Store?

We already pay a 100% premium on AWS.

At least that premium is not directly proportional to our revenue.

Good callout. However, nothing says Nvidia would adopt this margin tactic either.

More like IBM

In 2019 or 2020 that probably seemed reasonable.

Now? You would have to tell me nVidia was also building multiple nuclear power plants to get the scale to make sense.

They're invested in nuclear power. Pairing datacenters with small modular reactors is at least on the minds of all the AI companies.

One day they will build AI out of radioactive source material directly and skip the reactor. Maybe.

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