cross-posted from: https://lemm.ee/post/53805638
Bizarre story. China building better LLMs and LLMs being cheaper to train does not mean that nVidia will sell less GPUs when people like Elon Musk and Donald Trump can’t shut up about how important “AI” is.
I’m all for the collapse of the AI bubble, though. It’s cool and all that all the bankers know IT terms now, but the massive influx of money towards LLMs and the datacenters that run them has not been healthy to the industry or the broader economy.
It literally defeats NVIDIA’s entire business model of “I shit golden eggs and I’m the only one that does and I can charge any price I want for them because you need my golden eggs”
Turns out no one actually even needs a golden egg anyway.
And… same goes for OpenAI, who were already losing money on every subscription. Now they’ve lost the ability to charge a premium for their service (anyone can train a GPT4 equivalent model cheaply, or use DeepSeek’s existing open models) and subscription prices will need to come down, so they’ll be losing money even faster
Nvidia cards were the only GPUs used to train DeepSeek v3 and R1. So, that narrative still superficially holds. Other stocks like TSMC, ASML, and AMD are also down in pre-market.
US economy has been running on bubbles for decades, and using bubbles to fuel innovation and growth. It has survived telecom bubble, housing bubble, bubble in the oil sector for multiple times (how do you think fracking came to be?) etc. This is just the start of the AI bubble because its innovations have yet to have a broad-based impact on the economy. Once AI becomes commonplace in aiding in everything we do, that’s when valuations will look “normal”.
