News Nvidia Makes 1,000% Profit on H100 GPUs: Report

[DSzymborski]

I'm no expert and was just paraphrasing it in terms of financial returns only. Stll, I think any software or r/d costs are irrelevant to the fact that they can earn 10x on every h100. what they do with the proceeds is another thing.

How are costs like employees, software, and R&D irrelevant? Prices for *anything* that's even remotely complex are far, far more than the cost of the basic, raw materials and it's absurd to single this out as something meaningful. Do you also think publishing houses are raking in it because the physical cost of paper is extremely cheap?

 

[Peter Ferrari]

How are costs like employees, software, and R&D irrelevant? Prices for *anything* that's even remotely complex are far, far more than the cost of the basic, raw materials and it's absurd to single this out as something meaningful. Do you also think publishing houses are raking in it because the physical cost of paper is extremely cheap?

so they can't sell a h100 at 10x production cost because of the employee salary,software and r/d has to be added ?
boy, are they losing money on those h100s.....
I think the title is misleading to begin with, should be h100 sells at 10x production cost, I see a lot of people get lost here.

 

[DSzymborski]

so they can't sell a h100 at 10x production cost because of the employee salary,software and r/d has to be added ?
boy, are they losing money on those h100s.....
I think the title is misleading to begin with, should be h100 sells at 10x production cost, I see a lot of people get lost here.

No, they can sell an h100 at 10x the cost of the parts. But again, the parts are not the only thing that is part of the cost of making the GPU.

Your baker who owns a shop that sells you a $40 cake might have $4 of sugar, flour, eggs, butter, and oven power going into it. But that doesn't mean they get ten times their cost in return for the cake they sell you. You're also paying for the salaries of the staff, and the rent on the store and the utilities the store loses, you're paying for the time the the baker is using that could have been used on something else. And you're paying for their expertise, which was acquired through training and experience and possibly education; you don't pay for the mechanic to turn a wrench, you play for a mechanic to know *where* to turn a wrench.

Nvidia makes a solid profit, but it's not in the same galaxy as 1000%. The GPU can't exist without the investment in all of those other things that Nvidia needs for raw materials to become GPUs.

And yeah, the title is misleading because the premise is overblown.

 

[Peter Ferrari]

No, they can sell an h100 at 10x the cost of the parts.

That's all this thread claims, if you read the article actually, which you did not it seems. Article says it costs roughly 3,000 to make, sells at up to 30,000.

 

[vehekos]

Except, is your memory so short that you forgot about the latest crypto boom?

Your argument is wrong, because is impossible to predict the future.

You make the fallacy called Hindsight bias. You are conceited claiming that "you knew it all along", as if you had a crystal ball.
You claim that NOW you "know the right choices", because OTHER people made bad choices IN THE PAST. That's pure narcissist conceit.

The free market is a search algorithm, that optimizes resources. It takes time to find which investments are good, and which ones are bad. Finding the good investments has the unavoidable cost of also finding the bad investments. It's called RISK. Risk is part of the cost, which socialist arbitrarily ignore, but is impossible to make good investments without also making bad investments, hence the cost of a success, includes the costs of failures.

The free market is better than anything else, because the free market punished bad investors, and forces them to stop malinvesting resources, meanwhile also rewarding good investors giving to them more resources.

That self correction is impossible in socialism, because socialism does not have the guidance of prices, profits and loses.

The loses in the crypto market are the virtue of the free market: it's the self correcting mechanism. Socialism never corrects his errors.

 

[thestryker]

Your argument is wrong, because is impossible to predict the future.

You make the fallacy called Hindsight bias. You are conceited claiming that "you knew it all along", as if you had a crystal ball.
You claim that NOW you "know the right choices", because OTHER people made bad choices IN THE PAST. That's pure narcissist conceit.

The free market is a search algorithm, that optimizes resources. It takes time to find which investments are good, and which ones are bad. Finding the good investments has the unavoidable cost of also finding the bad investments. It's called RISK. Risk is part of the cost, which socialist arbitrarily ignore, but is impossible to make good investments without also making bad investments, hence the cost of a success, includes the costs of failures.

The free market is better than anything else, because the free market punished bad investors, and forces them to stop malinvesting resources, meanwhile also rewarding good investors giving to them more resources.

That self correction is impossible in socialism, because socialism does not have the guidance of prices, profits and loses.

The loses in the crypto market are the virtue of the free market: it's the self correcting mechanism. Socialism never corrects his errors.

What free market is that? Last time I checked companies like nvidia rely on government protection of IP otherwise their business model wouldn't be viable. This is hardly the only business where that happens to be the case. No capitalist system currently in existence runs on a free market despite using some tenets of one.

I'd also like to note you conveniently ignored the entire explanation to make your own point that has nothing to do with what was said.

 

[bit_user]

Your argument is wrong, because is impossible to predict the future.

You make the fallacy called Hindsight bias. You are conceited claiming that "you knew it all along", as if you had a crystal ball.
You claim that NOW you "know the right choices", because OTHER people made bad choices IN THE PAST. That's pure narcissist conceit.

I'm not sure how you got that idea from my post. I didn't claim to know anything about the future. I even went so far as to say:

​

"There's a lot yet to be written about the story of this AI boom, but it will have echos and implications on the hardware business for years to come"​

​

I don't know what that is, if not open-ended! In fact, my examples of examples of the crypto boom and the pandemic-fueled PC buying frenzy were actually meant to evoke a sense of humility, since it's hard to know the knock-on effects a given market swing will have.

The main point I was trying to make is that the concept of "value" is fluid, and changes over time and with circumstances. This concept of the market "discovering" the value of H100 GPUs makes it sound as if it's a static fact. The reality is that this process of discovery, if that how you want to describe it, is a continuous one. So much so, that I think its a misleading analogy.

My secondary point was that, just as value can be created, it can also be destroyed. We shouldn't celebrate one, without acknowledging the other.

The free market is better than anything else,

I didn't say otherwise. At worst, all I showed was that it's not perfect. It does tend to be reactionary and prone to boom & bust, but that's hardly news and one can take the bad with the good.

That self correction is impossible in socialism,

That you feel the need to defend it against socialism says more about you than me. I didn't advocate price controls or anything remotely socialistic.

I would like to think that we can have mature discussions about things, where we can examine the benefits and drawbacks, without being cast as taking one side or the other. But, that can't happen as long as you're so sensitive to any perceived slight and so quick to lob allegations and accusations.