I have also moved some money to nvidia every time it falls.
nVidia is making certain investments that are indicative of a strategy.
Note “NVIDIA CSP program”. Yes. Nvidia is moving to cloud services. How? By investing/partnering in companies that are showing the most promise/capability.
CoreWeave today announced that it raised $221 million in a Series B funding round led by Magnetar Capital with participation from Nvidia, former GitHub CEO Nat Friedman and ex-Apple exec Daniel Gross. Magnetar contributed $111 million, with the remainder of the investment being split between Nvidia, Friedman and Gross. An Nvidia spokesperson said that the investment represents a “deepening” of its partnership with CoreWeave.
nVidia is playing the kingmaker. “API is ready. No one else has it. Build on it. You get sure shot market + preferential treatment from me will help you against large CSPs”.
This is basically creating a market for nVidia AI services. They get to make > 70% gross margins from their H100 machines and then they invest in upstream companies and get a share in their pie too (forward integration is the term?). What this also does is when the subscription money kicks in, the cyclicality of nvidia semi biz is taken care of. This part is something even Ashwatch Damodaran did not talk about in his nVidia valuation. Atleast not specifically though. He did mention he is confident nvidia will make the next technology leap when everything else it is doing appears saturated with many players.
Nvidia is known for its stranglehold over the market for the data center chips that power ChatGPT and other artificial intelligence software. But in a matter of a few months, Nvidia has also become one of the biggest venture capital investors in an important class of customers who need its chips: cloud and AI software startups.
They are moving at blitzing pace. They are far ahead of everyone else. In 2013, they brought in volta with tensor cores. We are seeing the impact now after 9 years. They are moving to “premium AI services” today. Competition is AWS/Google/Meta. They are customers too!
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