I do feel there might be a day of reckoning where Nvidia bet the farm too hard on this AI bubble and it ends up blowing up in their face.
I hope gamers, systems integrators, and regular PC enthusiasts don't have memories of goldfish and go back to business as usual. It needs to hurt Nvidia in the pocketbook.
Will this happen? Unlikely, but hope springs eternal.
NVidias share price will take a hit when consolidation starts in AI, because their business won't be growing as fast as their PE ratio implies. Also the circular deals could hurt them if one of the AI providers they've invested in goes bust.[1],[2]. They won't go out of business but holders of their shares may lose lots of money. But will this happen after Anthropic and OpenAI have their IPOs, possibly next year? NVidia stands to make a lot on paper if those IPOs do well.
If OpenAI has their IPO, this is likely going to result in retail getting fleeced, given how their return on their investments to date has been absolutely pitiful. They are seeing revenues of around $13 billion for 2025, with an alleged over $100 billion or more by 2030, but the investments they are making are orders of magnitude greater. Who is ultimately going to pay for this?
Surely OpenAI has customers buying their pro packages for ChatGPT, but that can't really be it. And businesses are starting to realize that AI can't replace the workforce that easily either.
Hardly taking this personally. Just calling out how I see it going most likely. Also... Nvidia has done quite a bit unethically. Namely violating anti-monopoly laws (though with our current US administration - they may as well be not worth the paper they are printed on), screwing with product reviewers, pulling a 90s-era Microsoft to obliterate their competition at all costs, and screwing over their board partners, like EVGA. GamersNexus on Youtube has covered plenty of this.
That said, although AI has some uniquely good applications, this AI mania is feeding into some ridiculous corporate feedback loop that is having a negative impact on the consumer.
Having to pay several thousands of dollars for a top tier consumer GeForce when it was possible to do the same with only a few hundred dollars less than a decade ago is telling me the customer is being taken for a ride. It stinks.
I don't get this. Nvidia didn't "bet the farm" on AI. They are simply allocating limited resources (in this case memory) to their most profitable products. Yes, it sucks for gamers, but I see Nvidia more reacting to the current marketplace than driving that change.
If/when the AI bubble bursts, Nvidia will just readjust their resource allocation accordingly.
I also don't understand common sentiment that if/when the AI bubble pops and hardware manufacturers come crawling back, we consumers are going to make manufacturers regret their decision.
Isn't the whole problem that all the manufacturers are pivoting away from consumers and toward AI? How are we going to "hurt Nvidia in the pocketbook?" Buy from their competitors? But they are also making these pivots/"turning their backs on us." Just abstain from buying hardware out of protest? As soon as prices go down there's gonna be a buying frenzy from everyone who's been waiting this whole time.
If/when the bubble pops, manufacturers will find that they can't butter their bread like they could when the datacenter craze was booming. In a world that is paved by growth, companies aren't very good at shrinking.
It doesn't matter what consumers do or don't do -- we plebians are a tiny portion of their present market. We can buy the same GPUs from the same folks as before, or we can do something different, and it won't matter.
Whatever we do will be a rounding error in the jagged, gaping, infected hole where the AI market once was.
This is an even-handed take. I still think consumers in general should vote with their wallets, even if all of them put together won't hold a candle to their datacenter customers. If nothing else, it can grant the competition more market share, and maybe AMD and Intel can invest more into Radeon and Arc, respectively. That can only be a good thing, since I'd love to see more broad support for FSR and XeSS technologies on games, and ROCm and oneAPI for compute.
I certainly have no delusions of Nvidia going bankrupt. In fact, they will certainly make it to the other side without much issue. That said, I do foresee Nvidia taking a reputational hit, with AMD and (possibly) Intel gaining more mindshare among consumers.
I hope gamers, systems integrators, and regular PC enthusiasts don't have memories of goldfish and go back to business as usual. It needs to hurt Nvidia in the pocketbook.
Will this happen? Unlikely, but hope springs eternal.