Photo of a crater by Hanson Lu on Unsplash
OpenAI’s cost shenanigans exposed
By now people should be catching on to the huge fraud that's the valuation of generative AI companies like OpenAI, as well as the gross overestimation of the cost of hardware (mostly done to bait more VCs into dumping money into the bottomless pit while people like Altman gets to personally pocket a hefty portion, raise trillions / pocket billions) all thanks to DeepSeek. That company managed similar results with a fraction of the cost while using lesser hardware.
Software eats hardware for breakfast, and this time it's no exception with genAI. Just get a bit more clever with software and boom, down goes the stupid brute-force approaches.
I don't think the OpenAI ponzi scheme is going to come crashing down any time soon, but it sure would be nice if it does. It's good to have the Samster sweat at least a little over this.
Nvidia’s stock went down a little
I've seen this reaction of "Nvidia stock should have went up and not down because lower requirements will drive demand" over and over.
People don't understand how the hardware market works.
The threat of moving to lower hardware requirements for a hardware company isn't "less compute" but "lower margin."
Who needs top tier GPU when an A100 or lower would do?
Remember... the price delta between Nvidia A100 and H100 is big. The A100 is priced around $7,899, while the H100 is significantly more expensive, with prices starting at approximately $30,970.
The profit margin on A100 is about 65% while the H100 is nearly 1000%.
"Cratering" wouldn't describe what happens to Nvidia's margins on these things should the world just switch over... A measly 17% drop in its stock price today is nothing in comparison.