This article inaccurately paraphrases actual journalism at the WSJ. That article does not use the word “excess” once. They can have an avalanche of wafers coming at them without it being excessive. You can make that inference but that exact statement cannot be attributed to Huang, per the actual reporting.
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."”
There seems to be some evidence of "GPUs sitting in warehouses awaiting to be plugged in". But it seems to be mostly/only Ed Zitron pushing the agenda that it's not as planned and that there is oversupply of GPUs.
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.
This whole buildout is one of the largest construction projects ever - there will definitely be oversupply hotspots even for items that are in super short supply. I could easily imagine $1B+ of top-tier chips just sitting around in a warehouse for months on end because of difficult planning problems. That's not a sign of any sort of crisis.
> [...] pushing the agenda that it's not as planned and that there is oversupply of GPUs.
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.
I could never track Zitrons argument. I would not be surprised if there are gpus sitting around, we have known for at least the past year that hyperscalers have been unable to build enough data centers. They continue to state demand exceeding supply, that’s kind of why the neoclouds have even become a thing. It does not indicate to me that those gpus are not going to be used or even if companies overpaid for them.
There was a post about how growth in the data center space was slowing, so AI must be over. The evidence seems to be that we've reached whatever growth capacity existed or was planned, rather than any drop off in demand.
> There seems to be some evidence of "GPUs sitting in warehouses awaiting to be plugged in". But it seems to be mostly/only Ed Zitron pushing the agenda that it's not as planned and that there is oversupply of GPUs.
> All hyperscalers have in the last 2 months stated that they have more demand for AI computing (I guess GPUs & their own chips) than they can supply.
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.
Nobody ever listens to the CFO and they should. The one person who actually keeps a company on track is the person who looks at the actual numbers. I have seen this over and over it’s a freaking meme.
> In an August meeting, Huang belittled Kress for questioning the deals, calling her “a deer in the headlights”. To justify why Nvidia needed to financially backstop OpenAI and smaller cloud providers to keep buying its GPUs, Huang admitted that Nvidia was caught in a massive squeeze.
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
I'm sure Nvidia would have no issue selling this "avalanche" if they just dropped prices a bit
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
Honestly agreed. I would gladly switch back from AMD if Nvidia lost their multiplier over how it was a few years ago (and got rid of that new power connector). But my few thousand is nothing to Oracle and co's hundreds of billions. Even your $300k. So if the circular financing does pay off, it'll pay off big.
Of course they were. They bought up literally as much as they could manage, because anything they didn't would be bought up by someone else. It's literally a use it or lose it market right now. This is not a problem. Just stockpile it.
"It's literally a use it or lose it market right now."
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.
…. But they’re not using it? Why not buy when you’re ready?
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.
This AI investment boom has always been about obsession with the exponential growth of the future, and trying to get ahead of it. So absolutely they were getting as much as they could possibly have in preparation for a future where they can't get any more. They didn't wanna give up any of that ground.
If you wanted in early you’re competing against companies that have what, 1/4 of the worlds resources at their disposal, in a regulation free political environment, with the only downside being if you never get space to plug them in you can likely sell them to someone else at a profit. It’s just crypto 2.0 economics but with bigger players.
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."”
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.
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.
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
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.
It is all utter nonsense.
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.
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.
There are, however, reports that there are a bunch of "dark chips" that data centers can't bring online because of missing power requirements.