The AI Bubble Is Profitable, For Those Selling The Shovels
NVIDIA is the first company to ever be valued at $4 trillion on the stock market after shares saw a 2% jump in value yesterday. Microsoft and Apple might have hit $3 trillion long before NVIDIA did, but neither are anywhere near as valuable as NVIDIA is now. Thanks to the huge boom in the LLM market NVIDIA hit the $2 trillion mark in February 2024, and surpassed $3 trillion in June. There was a brief downturn a few months back, but overall the value of NVIDIA has been trending sharply upward.
The majority of LLM developers aren’t seeing profits from their products, but since NVIDIA provides the hardware they benefit from every single start up or expansion undertaken by an existing LLM provider. The sad part is that this success comes at the cost of the segment that we, as gamers, care about. GPUs for enthusiasts used to be NVIDIA’s reason for existence, and both the market and customers benefited greatly from the competition between ATI/AMD and NVIDIA.
In this new world, GPUs for gamers make up a minuscule part of NVIDIA’s income. Hopefully this will not mean they will abandon us completely, but it seems possible we will start seeing less low to middle range cards as NVIDIA can make far more money by changing those production lines to HPC cards. It could mean that NVIDIA’s gaming GPUs will remain very powerful, but also very expensive.