Jensen Huang Admitted He Was Facing an "Avalanche" of Excess Wafers and Memory
respawnfirst.com
respawnfirst.com
The actual quote from the actual article: “ Then he went on to describe the situation the company was in. Major cloud providers were running away from Nvidia, making plans to use alternative chips and lessen their reliance on the firm. Even worse, Huang said, the vast supply of chip wafers and memory Nvidia had committed to buying were coming at him like an "avalanche."”
Or so I hope. More likely is people will continue to engage with low-quality information and come to believe all sorts of nonsense, misquotes? Conspiracy theories, and more as they always have…
There is nothing good to go back to because there was nothing good about journalism at any point in the history of mankind.
These freaks don't actually coldly manipulate you with sensationalist headlines, they are exactly as excited to write pages about gruesome family murder as the text suggests.
Now that they compete with TikTok sending you tragedy after tragedy right into your pineal gland, it has been a rough patch to be a traditional corpse picture snatcher.
The job of a journalist is not to be a "scribe" or "scribbler".
The job is to investigate, corroborate, and report. Journalism is what has exposed corruption in governments all over the world.
To reduce a profession down to its worst participants is an action rooted in emotion over reason.
The more recent spate of sensationalist journalists however are less remarkable. The ones that parrot headlines from other places, or worse paraphrase to make them get more views.
My pushback stems from what I perceive as a lopsided amount of ire directed at "journalists" without nuance.
I don't think most people make any sort of distinction when they voice this ire, as we see above with the commenter I initially responded to decrying "journalism" as the "lowest of vocations" and claiming it has never had any value.
Clickbait/yellow journalism has always been the cost of having a free press. We should shame those people when we see them, but should not throw the baby out with the bathwater.
Ouch! Sounds like they have an avalanche of excess chips coming their way and no customers to buy them.
It is the circle of clowns man... People have every right to also be annoyed with the blitz-scaling corporate collusion. =3
All hyperscalers have in the last 2 months stated that they have more demand for AI compute (I guess GPUs & their own chips) than they can supply.
Nvidia might have been trying to spread the demand over more providers (neoclouds, and seemingly China) and provided financing to enable that.
It's not clear that this means there is an oversupply of reserved wafer capacity and Nvidia GPUs. But if datacenter construction slows down it might affect the GPU demand as they can't be plugged in.
I don't read that it is not as planned, there is high demand from everyone but it appears to be similar to the over recruitment of engineers. They have FOMO, and they also want to block competitors.
> All hyperscalers have in the last 2 months stated that they have more demand for AI compute (I guess GPUs & their own chips) than they can supply.
I certainly have not had any issues getting as much access as I would like. It just costs. Which would imply that the scarcity is manufactured to drive up pricing rather than availability.
> if datacenter construction slows down it might affect the GPU demand as they can't be plugged in.
I think this is the crux of the matter from Nvidia's point of view, that's if they weren't already impacted by the power limitations for customer installations.
It just costs, because demand is high, supply is low, if it was opposite, it would have been like in 2018s, you could get 128Gb RAM server from Hetzner for 50-80 EUR, now it starts at 170 EUR (3x)
Zitrons thesis is half baked.
This has always been my theory for why we see more GPU sales than we see coming online.
I do think that things like this muddy the demand signal a lot, which may have much, much broader repercussions than just Nvidia. Have Nvidia been doing enough shady stuff that they end up like Enron? Unlikely, but it's entirely possible that they end up like Cisco, still there but not back to their current stock price for ~20 years.
That just means the price point is wrong. They might say they want to buy more racks to increase supply and increase profit, but turning away customers is not what they're doing in a market where prices turn on a dime.
So I don't buy the "GPUs waiting in warehouses" thing.
They're getting stolen from trucks on the highway!
The two things are not in the opposition at all. You need datacenter to plug the chip in. If you dont have the datacenter already build, you cant use the chip.
The question is if it's planned by the purchasers. That they have datacenter capacity coming online according to plan and any "GPUs in warehouses" is just the plan to ensure there are chips to install when the datacenters are ready.
Or that they purchased out of fear, to corner the market, or expecting datacenter capacity that is delayed; and will soon stop purchasing as they don't have datacenter capacity coming online to install the chips they already bought. And noone else neither has that datacenter capacity.
They will be selling better chips in 4 months.
Are these two sentences related? Is it saying Jensen questioned her on the circular financing? Or was she questioning him? A bit lost on that
CEOs make the call, and I expect they do listen to the CFO.
I think it should not.
I am also hoping companies would move a bit away from AI and start hiring more developers instead.
(yes I am unemployed)
(Unless you’re an actual, bona fide expert in specific AI/ML fields, which isn’t the same as being able to effectively use any given kind of tool.)
You can use AI to fully automate the job search and application process and spam job apps at a pace you would never be able to do by hand.
You can do a project with AI and build an AI native app that you can demo during an interview to prove you have AI skills.
It works and if you're not doing this as a dev because you think AI will just "blow over", that's not going to happen and you're just putting yourself in a weaker position every day.
Level -1: People who are completely against AI and don't use it on principle (anti-AI). You see some people like this on HN and Reddit.
Level 0: People who use ChatGPT/Claude for personal stuff, maybe even some work, but mostly chatting. Usually they've used free accounts or Copilot.
Level 1: People who use Cowork/Claude Code/Codex for work in non-IT.
Level 2 and up: People who use Claude Code/Codex for work in IT. Then it's a matter of what you've created, how many users you support, and so on.
Of course people who are researchers for Anthropic/OpenAI and other labs are in their own category, far ahead of anyone else just because they have access to stuff the public doesn't.
There are, however, reports that there are a bunch of "dark chips" that data centers can't bring online because of missing power requirements.
We went with AMD for our $300k AI server, then after two months of delays were told it will be delayed another 10 months. Getting the same amount of VRAM from Nvidia remains out of our budget
Meanwhile "reasonably-sized" cards like a RTX 6000 Pro Blackwell or even a consumer RTX 5080 still trade for twice what they cost in January
Potentially less revenue and lower margins for Nvidia, but not necessarily supply they cannot get rid off.
They are still everywhere, and who cares if it takes 14 hours instead of 6 hours if the task gets done. =3
https://www.youtube.com/watch?v=Ty4lTwykmKY
https://www.pugetsystems.com/labs/articles/amd-radeon-ai-pro...
I suspect that this massive supply-chain advantage, locked in by Nvidia's massive monopoly cash flow, is a huge factor in keeping other competitors like TPUs and Trainium etc catching on; they simply cannot acquire the necessary volume of memory at a competitive enough price-point.
Are you sure? The point of this stockpiling was to create that impression. Now that you have data that that foundation behind that impression is manufactured and faked, you need to reconsider everything that was resting on that foundation. The demand is just so incredible needs to be reexamined from scratch now in light of the active attempts to forge that signal.
It is also worth remembering that this is a prime example of a situation that is not black or white. The absolute size of the demand, however large it may be, is not the question. It's the size relative to the supply, supply which includes all the pumping shenanigans that are coming into the light. The "AI bubble" has never been if there is demand or if the tech has real use, it has always been a relative question about if the build out could possibly make economic sense.
You need to apply first-principles thinking to this sort of scenario. Beliefs like the demand is crazy do not just exist floating through space; they exist on top of a specific set of facts and deductions from those facts, which can be very easy to forget when a fact seems to be true for a long period of time. When the set of facts and deductions a conclusion rests on are found to be faulty, the conclusions need to be re-examined from scratch. It is not generally impossible that a fact could still end up being true, just for different reasons.
However in this specific case, it strikes me as extraordinarily unlikely. If the shortage has been manufactured, then all assumptions around demand and possible profitability have to be completely re-examined. Once the system digests this, because these things do take some time, it can cease to be a "use it or lose it" market very, very quickly, and turn incredibly quickly into a "liquidate everything you can while it still has some sort of value" because of massive, massive oversupply. What is the value of a rack of nVidia processors that nobody can turn on? What is the value of a rack of nVidia processors that nobody can turn on when there are warehouses' worth of the things? Anyone who blind operates on "it's a use it or lose it market" will lose their shirts on the transactions. "It's a use it or lose it market" is not a foundation; it is contingent on a lot of things, some of which are being shown to be false.
I look forward to the next R710 where you can just buy enterprise grade servers for a few hundred bucks and as long as you have somewhere to put a hurricane level of noise, you can Just Have terabytes of memory at home. Or many-GPU in this case.
edit: i'd willingly bet that AMD has a backroom deal to tank their performance and options to encourage this homogenous deployment overseas. swallow the hook.
Unless you’re convinced you’re going to be able to build faster than you can buy _in the future_ of further increased AI demand and easy painless data center construction.
But far simpler explanation is just supply and demand. There is no need to craft some elaborate theories when the simplest one checks all the boxes.
It is all utter nonsense.
It's a neat plan. Keep prices high, circularly finance so that you still have customers, getting ownership of other firms and effectively having lower prices.
It's a superb plan for NVIDIA, and then of course, people try to get around that plan: we Europeans obviously want to be able to do AI, and if we aren't getting the circular financing will of course want to make our own chips and do our own circular financing, or at least have normal prices. Google, Amazon, etc. obviously don't want to pay with equity, so they make their own chips.
I don't think it has to be nonsense. I think it's a good plan, it's just that anybody who wants to exist or be their own thing is fighting against it as they of course should.
In the end I hope for a competitive DL accelerator market with prices 1/5th or less of what they are now. High prices tend to lead to high prices though.
Nvidia were notorious assholes to work with 20 years ago, but people persisted in doing so because they needed to. It would not be remotely surprising if their strategies involved concepts many fond unpalatable even if highly effective.
This whole thing is a mud slinging exercise.
I think the plan sounds like a normal, sound business idea which has a chance of working but which involves beating both us Europeans, Google, Amazon and many others, and I think it's plausible that it's actually what they were trying to do.
But I agree that there may be some mud slinging involved too, and I suppose I see the mud in this case as a plausible and reasonable plan over which there's internal conflict because it's a big plan that involves beating so many capable people.
I also think the plan, if it's real, is a hard plan to beat. For us Europeans to beat it, the politicians would basically have to pick capable people and tasking them with doing the technically correct thing, and I suspect that people are prodding them to do that, but that they can't tell prodding from the right person from prodding from a person who wants them to pick his guys to do it. So I think the plan still has a chance against us, and who knows whether it has a chance against the others. Maybe with lower prices.