Jensen Huang says Nvidia is pulling back from OpenAI and Anthropic(techcrunch.com)

101 pointsby jnord4 hours ago9 comments

whynotminotan hour ago
As long as both companies remain stable and viable, there's probably limited upside to pouring more money into them. If they fail, and bring down the AI ecosystem with them, that is very bad news for Nvidia. So they've been there nurturing their success and providing capital to backstop their exponential growth.
You can see Nvidia stepping in throughout the ecosystem with confidence boosting investments where needed. They haven't just supported Anthropic and OpenAI.
If OpenAI and Anthropic succeed, and get their business fly-wheels fully spinning, they don't necessarily need more capital from Huang. Ultimately the goal of Nvidia is to profit from their long-term success by selling them GPUs for a long, long time. The goal isn't to keep plowing money into them forever.
- adventured31 minutes ago
  These days Nvidia has more money than it knows what to do with. They could certainly push $5b+ into each company annually and never miss it. They're tracking toward an astounding $200b in operating income (maybe over the next four quarters if the music doesn't suddenly stop).
  - locusofself12 minutes ago
    5 billion doesn't look like much when OpenAI just raised $110b though. And how sustainable is NVDA's immense profits if this bubble actually bursts?
codemac13 minutes ago
> Nvidia CEO Jensen Huang said his company’s recent investments in OpenAI and Anthropic are likely to be its last in both, saying that once they go public as anticipated later this year, the opportunity to invest closes
ok, sounds obvious
> Nvidia, for its part, isn’t offering much more on the matter
ok, so no more news from nvidia
> Still, a few other dynamics might also explain the pullback..
Wait it's a pullback?
This is terrible reporting, right?
tl2do2 hours ago
Instead of pouring more money into OpenAI and Anthropic, Nvidia should invest more in expanding production capacity for the RTX 5000 series and future generations. High-end consumer GPU availability is still constrained, especially for the RTX 5090, and street prices remain elevated. Nvidia should come back to the consumer side.
- wingmanjd2 hours ago
  Datacenter income for nVidia last quarter was something like 62B vs the gaming market of <4B. While not quite a rounding error, it feels like the gaming market is just too small for them to put more resources toward it for us consumer folks.
  https://nvidianews.nvidia.com/news/nvidia-announces-financia...
  - SirMaster31 minutes ago
    But so many gamers want to buy GPUs and can’t because they are sold out or won’t because they are super price inflated. Wouldn’t the gaming market be larger if the products were actually available and at their actual MSRP?
    danpalmer20 minutes ago
    Nvidia can't sell 10x the number of GPUs they sell. As much as the supply issues are discussed, it would likely take them a long time to just double the market. They could try to become the vendor of choice for the PS6/next xbox, but that's a big strategy shift for again maybe double the market, not 10x the market.
    On the other hand right now the market doesn't seem to think that the >60bn of datacenter revenue is going away or even going to slow down _growing_ any time soon. Just adding 10% more revenue there is worth more than doubling their GPU business which they likely can't do.
  - PenguinCoder2 hours ago
    It is insanely stupid that '4B' with a B, is 'too small' of an operating space.
    chii2 hours ago
    The absolute value is irrelevant - it's the opportunity cost that determines this.
    It doesn't matter if the consumer market is 4T, if the AI market is 60T!
  - yndoendo2 hours ago
    That is not substantiable. AI bubble is wealthy hype like a single drop of blood can be used to validate 100 different diagnostic test. Reality is parts per million fails this along with reusable medium. Wealth latches to idiocy.
    Gaming and CAD market are real expectations that latch to reality. Grow the education systems and grow both. So is matrix math, such as hashing.
    AI has reached a state of software issue, not hardware. And the divergence of AI hardware does not equate to CAD and Gaming math.
    SR2Zan hour ago
    How many of the last ten years have had some kind of "temporary" GPU shortage? It was crypto, now it's LLMs, who knows what's next?
    The only winning strategy for these guys is to exploit the market for all it's worth during shortages and carefully control production to manage the inevitable gluts.
    TheDongan hour ago
    > AI has reached a state of software issue, not hardware
    Citation very much needed.
    At the very least, OpenAI seems to believe more and larger datacenters is the path to better models... and they've been right about that every time so far.
    eitally34 minutes ago
    Moreover, all the frontier labs and hyperscalers are capacity constrained, and will be for the foreseeable future.
    dylan604an hour ago
    Great, when the AI bubble bursts, they can repackage their AI chips into consumer cards! /s
- eitally35 minutes ago
  Why would they do that? They launched the DGX Spark last year with multiple hardware OEMs selling flavors of the reference device (Dell, Lenovo, Asus). That contains a desktop-sized Grace Blackwell architecture GPU (GB10), and word on the street is that they're moving into laptops this year. Their market is the same market Apple is pitching the MacBook 5 Pro/Max, too: devs wanting local models. It's not currently a large market, but it's growing quickly. It makes far more sense for Nvidia to build hardware to service this market than to overly focus on their gaming lines. RTX GPUs are sell once. GB-containing consumer devices are "sell once, but then collect recurring revenue when the workloads those developers build hit production on a cloud somewhere."
- reilly300044 minutes ago
  This leaves an opening for Intel to get in the game. Their new lines have a pretty decent value proposition for mid-tier gaming. If they focused on the higher end they would could own it. There is massive latent demand because of the NVidia situation. It’s easier to make money from than the R&D to build the next Blackwell but there is just as much demand for local/private models on the prosumer level.
- returnInfinity2 hours ago
  And why should a business do that? Limited chip production capacity be spent on most profitable ventures.
  - bigstrat2003an hour ago
    If I were Nvidia, I would give more attention to consumer GPUs to hedge my bets. When (not if) this AI bubble pops, their AI customers will become worthless to them very quickly as they won't be buying more GPUs. And when that day comes, I would want to still have consumers to sell to, rather than have them all buying from AMD because I ignored them.
  - fishcrackers2 hours ago
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  - tl2do2 hours ago
    I should admit this is partly my personal preference. That said, gaming has been a durable market for decades, and there’s a strong cycle where better chips enable better games, which then drives more demand for better chips.
    ravst3s2 hours ago
    That same virtuous cycle works for their data center segment
    Every GW of Blackwell generates more revenue than the entire gaming business does in 1 year.
- chii2 hours ago
  nvidia will come back to the consumer side when the AI side stops being as profitable. Right now, it still seems like the margins for AI hardware is way higher than the same consumer product would sell for.
011000112 hours ago
Nvidia could flip a switch and start competing with former customers. They have the talent, the models, the HW, and they know how to quickly build out DCs.
- y1n02 hours ago
  That would not go well for nvidia. Why would they want to enter and compete in a market where everybody is losing money? And in so doing alienate the people that make them profitable?
  - eitally41 minutes ago
    They don't, not directly. That's why they've generally been winding down DGX Cloud. However, lots of folks dramatically underestimate their frontier models (Nemotron family), and they license those models (free) for embedding in MANY other, large tech companies' own products and platforms, which either directly or indirectly consume massive quantities of GPU time.
    Nvidia is best known for selling huge volumes of GPUs to the hyperscalers & neoclouds, but I don't think lots of folks appreciate how many GPUs ISVs like Snowflake, Databricks, Teradata, etc consume, too, just by virtue of designing much of their internal products around CUDA & Nemotron.
  - mlyle2 hours ago
    If those customers end up profitable, it could be tempting for nVidia to vertically integrate.
    I don't think it's as easy as others say, though.
  - estimator729218 minutes ago
    Presumably Nvidia would have a significant advantage on hardware costs, and could run custom hardware that the rest of the market will never see
- credditan hour ago
  They don't have the talent.
  - iso-logian hour ago
    Are you suggesting Nvidia doesn't have talent in the AI industry?
    NVIDIA has released NVIDIA Deep Learning Super Sampling (DLSS) and a Frame Generation model, NVIDIA Super Resolution (VSR) being the most popular/well known models. (DLSS is outstanding technology, despite the sometimes misleading marketing).
    Nvidia has released countless models:
    Alpamayo 1 (Car navigation model) Cosmos-Reason2 (reasoning vision language model) Nemotron 3 (Large Language Model series) Llama-Nemotron (Large Language Model series) Isaac GR00T (VLA Models) Nemotron OCR (Optical Character Recognition models)
    Take a look at their HuggingFace Collections, almost 100 different collections with countless models inside each collection: https://huggingface.co/nvidia/collections
  - rl3an hour ago
    NV has a massive amount of AI talent, and a lot of them have PhDs.
    Are you suggesting they're lacking on the ultra-high-end? That is: 5-10M+ in comp to sign a single researcher/IC; industry rock star territory.
    Major frontier AI labs do tend to have that type of talent in abundance. I'm sure NV has the equivalent when it comes to hardware design. Surely in AI research too, but perhaps not in the same quantities.
- LarsDu8842 minutes ago
  That's not how a smart business runs and that's now how Nvidia operates.
  Jensen is smart. He's gone through over 30 years of tech cycles.
  Nvidia actively commoditizes the LLM models. Look at Nemotron. They've avoided making a SOTA model solely to keep the hyperscalers (aka crack addicts) coming back for more GPUs.
  As soon as the bubble bursts, they can release some open weight NemoMambaDiffusiontron and keep folks buying GPUs to run the damn thing.
  It still wouldn't be smart to do so, as this would fall into the common business pitfall of thinking you could easily do the next stack layer of work.
- paradoxylan hour ago
  And maybe TSMC should make cellphones? If you're higher up the supply chain why go downstream into risk? It's financially irresponsible.
  - stackghost2 minutes ago
    > If you're higher up the supply chain why go downstream into risk? It's financially irresponsible.
    Well, classically, to capture more margin for yourself. In business school they call this Vertical Integration. Samsung did exactly this. AWS too.
- wood_spirit2 hours ago
  And they have a moat - they can control the quantity and quality of hardware flowing to their competitions?
SamDc732 hours ago
The Stargate money didn’t show up I guess, and now the whole gridlock is collapsing?
dmix2 hours ago
A better headline:
Nvidia rushed some investments in both companies just before they went public and are now are just waiting to get paid.
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shablulman3 hours ago
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