Nvidia shows signs in [2023]

[GhostofWar]

Insane numbers but unsustainable long term. Once the datacenters are full of AI hardware they’ll go back to normal upgrade cycles. Only question is how long will it take to get there. Nvidia’s best chance at sustaining this sort of revenue is to get into the AI cloud services game. Hardware alone won’t do it.

Maybe they might try to add some AI services to omniverse in the future.

 

[Seanspeed]

Nvidia could give away their GPU and still have obscene margins

No no no, dont you know, they HAVE to sell at their current insane prices! It's not just sheer and utter greed...

 

[Seanspeed]

Their GPUs are the basis for all of their revenue and margins. They don't sell anything else.
And if you mean just GeForces then sure they can do it, and then they'll just stop making them altogether because the only point in making any product is in getting profits from it.

Talk about missing the point. They aren't seriously suggesting Nvidia offer their GPU's for free. Nvidia could still make a nice, healthy profit on 40 series GPU's while offering us more reasonable prices.

 

[DegustatoR]

Talk about missing the point. They aren't seriously suggesting Nvidia offer their GPU's for free. Nvidia could still make a nice, healthy profit on 40 series GPU's while offering us more reasonable prices.

What are you basing this on? Where are the numbers which prove this?

 

[entity279]

Nvidia could still make a nice, healthy profit on 40 series GPU's while offering us more reasonable prices.

Not really, no. Investors would (rightfully) sue if profit is being thrown away

 

[DavidGraham]

Crazy world!

an insider from the Chinese Baidu Forums has revealed that specialized factories are being formed all across China that are receiving these GeForce RTX 4090 shipments (sent prior to the ban)

Each card is a 3 or 4-slot design which means it takes up extra-ordinary space which isn't a great fit for a server AI environment. So the workers in these factories are taking each card apart. First, the massive coolers are disassembled and then everything including the GPU and GDDR6X memory is removed from the main PCB

It is stated that a specialized "reference" PCB has been designed that gives these AD102 GPUs and GDDR6X memory a new life

Each card is then equipped with a more tamer dual-slot cooler using a blower-style design

After assembling the new unit, the newly born NVIDIA GeForce RTX 4090 AI solution is taken through a rigorous testing spree in the testing labs where we can see Furmark, 3DMark, & a host of AI applications being run on them to ensure that they are meeting the demands of AI customers

Once everything checks out, these GPUs are packaged and sent off to China's AI companies

Chinese Factories Dismantling Thousands of NVIDIA GeForce RTX 4090 "Gaming" GPUs & Turning Them Into "AI" Solutions With Blower-Style Coolers

NVIDIA's GeForce RTX 4090 "Gaming" GPUs are being turned into "AI" solutions in the thousands to cater to the growing demand within China.

wccftech.com

 

[trinibwoy]

Talk about missing the point. They aren't seriously suggesting Nvidia offer their GPU's for free. Nvidia could still make a nice, healthy profit on 40 series GPU's while offering us more reasonable prices.

Why would they do that?

 

[Deleted member 2197]

Valeo is suing Nvidia alleging theft of trade secrets - KitGuru

We've covered a few stories on the theft of trade secrets in the tech industry in the past but usual

www.kitguru.net

 

[Bludd]

Why would they do that?

yup, a few things has to happen: nv gpus dont sell anymore, or amd gpus outclass nv gpus in performance (and also maybe price), or intel does the same

 

[Seanspeed]

Why would they do that?

That's a fantastic question, and it's really the crux of the whole thing, isn't it?

If it cost them enough sales to where they saw a notable decline in income, they would be forced to reduce prices.

However, if enough people still bought them anyways, they would not feel any need to change pricing at all. And they might even feel emboldened to raise them further in the future thanks to the new raised pricing expectations they've conditions consumers to have.

Basically, Nvidia's pricing is determined primarily by consumers. If consumers let Nvidia get away with being insanely greedy, then Nvidia will roll with that and they'd be silly not to. Doesn't mean some of us wont be extremely bitter about the situation, though. And yes, this means not just at Nvidia, but also all the people giving in and buying these GPU's at these absolute extortionate prices. Cuz they are literally ruining the GPU market for everybody, permanently. Nvidia has effectively raised prices by more than 100% in one generation, and they will gain the benefits of that for every generation going forward. They got like 10 years of normal pricing increases locked in in a single generation.

 

[arandomguy]

Why would they do that?

Nvidia already does give away GPUs albeit not at mass scale with their academic grant program for those doing ML research. You could argue this has been a pillar in establishing Nvidia's platform in the AI space and keeping it there.

An interesting strategy would be to increase proliferation of their GPUs for consumer ML usage to shore up their AI moat. Not necessarily giving them away but at least giving increased access at the grass roots level essentially.

This would of course need to involve artificial product segmentation that introduces limitations and prevents scalability that would lead to commercial or likely even prosumer usage due to the opportunity cost. As well as likely gaming limitations so it doesn't impact that segment either.

 

[trinibwoy]

That's a fantastic question, and it's really the crux of the whole thing, isn't it?

If it cost them enough sales to where they saw a notable decline in income, they would be forced to reduce prices.

However, if enough people still bought them anyways, they would not feel any need to change pricing at all. And they might even feel emboldened to raise them further in the future thanks to the new raised pricing expectations they've conditions consumers to have.

Basically, Nvidia's pricing is determined primarily by consumers. If consumers let Nvidia get away with being insanely greedy, then Nvidia will roll with that and they'd be silly not to. Doesn't mean some of us wont be extremely bitter about the situation, though. And yes, this means not just at Nvidia, but also all the people giving in and buying these GPU's at these absolute extortionate prices. Cuz they are literally ruining the GPU market for everybody, permanently. Nvidia has effectively raised prices by more than 100% in one generation, and they will gain the benefits of that for every generation going forward. They got like 10 years of normal pricing increases locked in in a single generation.

It’s true that Nvidia’s pricing is supported by consumer behavior. If people don't pay then prices will drop. The conclusion then is that the market is clearly not ruined for “everybody”. It’s only ruined for the people who aren’t willing to pay the higher prices. That’s how markets work.

Nvidia has an obligation to ship products at a price and volume that maximizes profit. That is their only obligation. It has nothing to do with greed.

 

[techuse]

That's a fantastic question, and it's really the crux of the whole thing, isn't it?

If it cost them enough sales to where they saw a notable decline in income, they would be forced to reduce prices.

However, if enough people still bought them anyways, they would not feel any need to change pricing at all. And they might even feel emboldened to raise them further in the future thanks to the new raised pricing expectations they've conditions consumers to have.

Basically, Nvidia's pricing is determined primarily by consumers. If consumers let Nvidia get away with being insanely greedy, then Nvidia will roll with that and they'd be silly not to. Doesn't mean some of us wont be extremely bitter about the situation, though. And yes, this means not just at Nvidia, but also all the people giving in and buying these GPU's at these absolute extortionate prices. Cuz they are literally ruining the GPU market for everybody, permanently. Nvidia has effectively raised prices by more than 100% in one generation, and they will gain the benefits of that for every generation going forward. They got like 10 years of normal pricing increases locked in in a single generation.

Customers have answered.

https://www.newegg.com/p/pl?N=100007709%20601408874%204814%204131&Order=1

 

[entity279]

Customers have answered.

https://www.newegg.com/p/pl?N=100007709%20601408874%204814%204131&Order=1

the 4090 price is likely to be impacted by the card being repurposed for AI , so it's not exactly "customers", is it?

 

[troyan]

All AIBs have their manufactories in china. nVidia cant ship AD102 chips to them to build 4090 cards.

 

[DegustatoR]

the 4090 price is likely to be impacted by the card being repurposed for AI , so it's not exactly "customers", is it?

In US? Highly unlikely. Even in Asia I wouldn't expect that to have any impact.

 

[Deleted member 2197]

Customers have answered.

https://www.newegg.com/p/pl?N=100007709%20601408874%204814%204131&Order=1

You should have also included out-of-stock items.

 

[Seanspeed]

It’s true that Nvidia’s pricing is supported by consumer behavior. If people don't pay then prices will drop. The conclusion then is that the market is clearly not ruined for “everybody”. It’s only ruined for the people who aren’t willing to pay the higher prices. That’s how markets work.

Nvidia has an obligation to ship products at a price and volume that maximizes profit. That is their only obligation. It has nothing to do with greed.

Oh no, it is ruined for everybody. People are paying higher prices, but it doesn't mean they're happy about it. They still get hurt from this. As does everybody. Most people are just too selfish or short-sighted to understand the damage they do by giving in and cementing these higher prices forever.

 

[DegustatoR]

Oh no, it is ruined for everybody. People are paying higher prices, but it doesn't mean they're happy about it. They still get hurt from this. As does everybody. Most people are just too selfish or short-sighted to understand the damage they do by giving in and cementing these higher prices forever.

There are no higher prices though.

 

[Silent_Buddha]

Oh no, it is ruined for everybody. People are paying higher prices, but it doesn't mean they're happy about it. They still get hurt from this. As does everybody. Most people are just too selfish or short-sighted to understand the damage they do by giving in and cementing these higher prices forever.

Keep in mind, I'm also at the point where 1000+ USD graphics cards are WAY too expensive for me to comfortably include in my budget so I just don't buy them.

However, you are attributing your own feelings to everyone buying those cards when not everyone is either unhappy or hurt by it. For some of my friends with 4090's, even 3k for the GPU would still be pocket change. They aren't hurt by it and they don't bat an eye at it. Anything less than 5k USD in price is in impulse buy territory.

Yes, I also have friends who had to budget for their 4k series RTX card, while some have bitched about the costs most of them are happy with their cards. So yeah, they'd like cheaper cards, but while some were unhappy with the price others just considered it the price you pay for gaming on PC. /shrug.

I hate it, you hate, other consumers hate it, but not all consumers hate it or are hurt by it.

NVidia on their part are happy to ship less consumer GPUs as demand cools due to high pricing since they are getting higher margins. Revenue and profits are up while GPU shipments are down. That's fine for them as a company. It only hurts them if a competitor can come in to take advantage of the the fact that NV are willing to sell less GPUs to less customers are a higher price.

The problem is that AMD aren't currently interested in that (they'd rather shift their wafer starts from GPU to CPU and keep across the board higher margins and pricing) and Intel while forced to sell at a lower price point are only doing so because their hardware is quite far behind.

I guess the other potential problem with going with lower shipment/higher pricing (margin) strategy is that you reduce the amount of GPUs in the PC gaming space with new tech which reduces the incentive for developers to try to fully take advantage of those newer features while also pushing them towards console first programming WRT to features and tech. But that's a longer term problem that NV might be willing to push into the future as long as they can continue to maintain high margins and enough people are willing to pay those high prices.

Regards,
SB