The $500 billion data center can now be $50 billion. That is excellent news, unless you were the company that was expected to sell $450 billion of GPUs with a 95% gross margin to that project.
$50 billion can be afforded by WAY WAY more sites and companies so Nvidia will simply delivered to >10x more data centers. Or instead of shipping 100k GPUs to Meta, they will ship 100k GPUs to 10 different customers.
For Nvidia, it is great news because now finally, the concentration of GPUs at Hyperscalers will end and every Fortune company can finally get their local data center to train their AI Models.
Because if training AI models becomes more efficient and easier then the ones being that business are at risk so basically Big Tech. Nvidia isn't in that business but in the business of providing tools to train.
Fortunately, Big Tech can easily do something to prevent ANYONE for competing. They simply buy all available GPUs. Oh wait, haven't they been doing it for years? Excatly!
People really don't get what an arms race and market competition race is.
How do I prevent disruption? I simply buy all the tools the competition needs to disrupt me.
See, if Fortune 500 companies want to build large data centers but can't because all Hyperscalers buy the GPUs then eventually they will rent from cloud as otherwise they can't get the GPUs.
> $50 billion can be afforded by WAY WAY more sites and companies
Spending $50 billion to do $6 million worth of Ai training seems like a good way to trigger a golden parachute and "spend more time with your family" as a CEO.
Inference can be more easily offloaded to other kinds of processing units, which also probably are more efficient, like TPUs.
That makes both NVDA stock and big AI infrastructure spending less compelling, as those needs are scaled down via software efficiency and chip alternatives.
