Comment on The Value of NVIDIA Now Exceeds an Unprecedented 16% of U.S. GDP
scarabic@lemmy.world 5 days ago
I’m not going to spend time on how dumb it is to compare a speculative total valuation to the real economic output of a single year.
If we zoom out, it’s not that surprising that emerging tech is going to require greater and greater computing power. We thought that our desire for our laptops to be faster was driving this, Moore’s Law, whatever. But now there’s a new technology that seems to raise the requirements by an order of magnitude. In the short term, this is fantastic news for the makers of computer chips. We’re living in the late Information Age. Is it all that surprising that there would be moments like this where our ability to consume computing power outstrips our ability to produce it? So Nvidia has a high valuation. BFD. Investors are confident in its future. That doesn’t make it 16% of the US economy.
unit327@lemmy.zip 5 days ago
I have similar concerns, comparing gdp to valuation seems nonsensical. But at the same time the valuation is still ludicrous. Nvidia designs chips, TSMC makes them, datacenters buy them, datacenters sell the compute to AI vendors like openai who sell services to customers for a price that doesn’t cover even a fraction their costs, let alone being profitable.
In my book, either two things will happen. Before the money runs out, the AI companies will hit their stated goal of AGI, but without doing any of the safety work, and then everybody dies. The money running out and GFC 2.0 is the “good” ending. If I was even remotely confident in my ability to guess the timing of how it would all play out I’d be shorting up to my eyeballs.
scarabic@lemmy.world 4 days ago
Don’t feel bad. I don’t think shorting can do any good. Betting we won’t need powerful chips in the future seems like a bad bet. The main scenario where we won’t is if we’re all dead, in which case all stock market bets are worthless anyway.
unit327@lemmy.zip 3 days ago
I can say that nvidia is way overvalued and that it’s share price is going to go down without saying that we won’t need powerful chips.
scarabic@lemmy.world 3 days ago
Don’t tell me. Go short the stock and make a million.