Nvidia pushes further into cloud with GPU marketplace

It's just another kind of leverage. There's no problem, until there is, and then it's bigger than it would have been. Once all of their sales are leasebacks, you'll know it's about to go boom (of course they won't announce that in their reports).

While I don't dispute that they're objectively the most desirable at the current moment - I do think your comment implies that they deserve it, or that people WANT Nvidia to be the best.

It almost sounds like you're cheering on Nvidia, framing it as "everyone else trying to reduce the value of Nvidia", meanwhile they have a long, long history of closed-source drivers, proprietary & patented cost-inflated technology that would be identical if not inferior to alternatives - if it weren't for their market share and vendor lock-in strategies.

"Well, what are they gonna do about it?" When dealing with a bully, you go find friends. They're going to fund other chip manufacturers and push for diversity, fund better drivers and compatibility. That's the best possible future anyone could hope for.

> Nvidia’s true moat is the CUDA ecosystem.

it is true, but also not. nvidia is certainly producing a chip that nobody else can replicate (unless they're the likes of google, and even they are not interested in doing so).

The CUDA moat is the same type of moat as intel's x86 instruction set. Plenty of existing programs/software stack have been written against it, and the cost to migrate away is high. These LLM pipelines are similar, and even more costly to migrate away.

But because LLM is still immature right now (it's only been approx. 3 yrs!), there's still room to move the instruction set. And middleware libraries can help (pytorch, for example, has more than just the CUDA backend, even if they're a bit less mature).

The real moat that nvidia has is their hardware capability, and CUDA is the disguised moat.

[Genuine question!] Does NVidia have patents etc on CUDA that prevent a competitor from reverse engineering and producing a compatible clone, or is it just that competitors are incompetent (hey AMD)? Or is it that the task is enormous and rapidly changing, like you have to be bug-for-bug compatible with a large, ill-documented API (the Microsoft Windows moat)?

Google has already mostly exited the CUDA and Nvidia ecosystem. They only offer it for their customers at this point.

Ask Google: TPUs.

> Well, what are they gonna do about it?

Ironically, the most effective thing they can do is probably haul up the AMD rep and yell at them.

I've always felt that the business model is nickel & diming for things like storage/bandwidth and locking in customers with value-add black box services that you can't easily replace with open source solutions.

Just took a random server: https://instances.vantage.sh/aws/ec2/m5d.8xlarge?duration=mo... - to get a decent price on it you need to commit to three years at $570 per month(no storage or bandwidth included). Over the course of 3 years that's $20520 for a server that's ~10K to buy outright, and even with colo costs over the same time frame you'll spend a lot less, so not exactly crushing those margins to dust.

Cloud is propped up by the tax laws.

Cloud bills can be written off in the month in which they are paid; while buying hardware has to be depreciated over years.

TPU's have serious compatibility problems with a good chunk of the ML ecosystem.

That alone means many users will want to use Nvidia hardware even at a decent price premium when the alternative is an extra few months of engineering time in a very fast moving market.

That’s a beautiful conclusion

> AMD's increased funding towards compatability and TPU development

no investor is going to bet on the second-place horse. Because they would've done the betting _before_ nvidia became the winning powerhouse that it has become!

The fact is, AMD's hardware capability is just insufficient to compete, and they're not getting there fast enough - unlike the games industry, there's not a lot of low budget buyers here.