I think they talked about this being general purpose chip but I would think that Anthropic/OpenAI are at the scale now they could bake LLM weights into chips themselves.
For example, GPT Sol baked into a custom chip run for $100M that runs 10x as fast and 10x as cheap should pay for itself as long as the chip is useful for long enough.
While 2 years ago nothing was useful more than 1 year long, there are many older models in use now (e.g. Haiku 4.5, GPT-OSS 120b), and I expect this trend to continue.
I know this is what Taalas was doing (acquired by AMD), here was their demo, https://chatjimmy.ai/ which is based on Llama 3.1 8B. It feels like this should start to happen soon.
Probably! But not viable yet; the chips would be about a year behind SOTA. Note the ~16 months that the article quotes as being insanely fast to get this chip to tape-out (read: start producing). We'll have to bootstrap our way there: AI is actively being used to get us closer to viable lead times for this.
Unfortunately, there's some real physical constraints: IIRC, manufacturing a wafer takes on the order of a month, start to finish, for the physical processing.
My guess is we only see this once they start saturating computer use benchmarks. That's a use case which would be extremely valuable at the right costs/speed, but the current models just aren't there yet.
I love how now you have to consider the possible s** posting motivation behind analysis of a trillion dollar industry being conducted at a world-class level by a bunch of ex Reddit and 4Chan adjacent mods -- it's one of the best stories in AI that SemiAnalysis is not cut from the same cloth as Gartner McKinsey et al
The semianalysis people have scripts which incorrectly count their numerators and Denominators all the time. All their benchmarks are flawed. It is such a slipshod operation and they charge exorbitant amounts of money for it.
> I love how now you have to consider the possible s*** posting motivation behind analysis of a trillion dollar industry being conducted at a world-class level by a bunch of ex Reddit and 4Chan adjacent mods
I mean, previously you could have said something much the same except substitute "frat boys".
I hadn't seen the token/Joules comparison with human speech before. Humans are still 22x more efficient, which is not that far considering the rate of progress in this area.
The 20W number includes EVERYTHING else the brain does. The chips/models are literally only producing tokens. Let's see an LLM drive a robot harness and have the robot produce speech, as well as move through 3D space, keep track of metabolic needs, etc. etc. etc. before we compare efficiencies. That is even assuming the tokens are of equal quality. This comparison is currently Apples and Oranges.
In short, better hardware will drive down token cost in the near-term, but will drive up the demand for tokens as it gets cheap enough for other sectors to start to use it heavily.
It comes from steam engines where economists originally thought that coal demand would plummet with more efficient engines, but it actually just meant that we found more uses for steam engines.
I cannot fathom tbe mindspace that leads to this being anythning but a simple observation. It might even make it all the way to obscure trivia or interesting observation, but paradox? Certainly not.
If you make the thing more accessible, more people are going to use it. If it consumes a resource, the use of that resource will increase in relation to the increased adoption.
Hydrogen engines use hydrogen. Making hydrogen engines cheaper will increase adoption. Increased adoption will increase consumption of hydrogen.
Like, who'd have ever thought "oh wow, we've gotten to the point that people can have a computer in their own home, surely electricity use will plummet." or "oh wow, more than 50% of the population can now feasibly purchase an internal combustion engine, surely fuel demand will plummet."
In the original context they'd decreased the cost and complexity of steam engines. Anyone who'd seen the amount of money people were making with the old steam engines would be clearly incentivized now that they have the same economic opportunity available for less capital up front. Therefore more steam engines, therefore more fuel demand. Who in their right mind would really be surprised that resource consumption went up when people could and did build more machines?
If we are applying Jevons paradox to this then the unit being consumed is not tokens but the inputs for token production - power, capex, something else. To draw an analogy to the steam engine, coal:electricity::mechanical-work:tokens. Jevons paradox does not talk about mechanical work becoming cheaper in the short term setting up a sort of rubber band of demand creating spiking prices for mechanical work. Compared to the renaissance, mechanical work was much cheaper throughout the industrial revolution and remains cheaper to this day. We can still definitely say that the easier it is to produce tokens, the cheaper they will be.
I think you're reducing a very complex thing (the global economy) into a very simplistic model (Jevons' paradox) and thinking both are the same thing. This has no predictive power or rigor. You're just wishing things would happen as they did before, without considering that conditions and situations change significantly, and instead of Jevon's paradox, we look back at today 50 years from now and talk about Jensen's paradox.
This doesn't mean the concept is BS, but one single concept cannot explain away everything in such a system.
There is just so much downward pressure on token price, from every direction. We would need a completely new understanding of economics to explain why the price shouldn’t go down. Or market collusion/regulatory manipulation.
The demand for them is growing _per person_, not just across the wider economy, if tokens cost half as much but you want to use 3 times as much you're going to have to pay more.
Maybe 1000s of tokens per second unlocks realtime robotic decision making, and now every robot needs to continuously stream tokens to and from the cloud to operate. That could 1000x demand overnight, just to speculate :)
I would very much like it if anything that moves with appreciable mass is governed locally just in case the link drops and/or latency suddenly goes up. Motion is very unforgiving and accidents will happen if that's not taken into account.
Hopefully this also means billionaires can stop trying to drop data centers into residential neighborhoods with zero noise control and polluting on-site generators, signing local politicians on with NDAs, calling for eminent domain to seize homes to build power lines to data centers, etc. etc. etc. Not to mention the water use controversy.
Token prices plummeting is probably a good thing, but not without the regulatory backstops that prevent these effectively industrial facilities from being operated with no regard for the externalities they impose on people who live near them.
Nah, Jevon’s Paradox says that cheaper tokens will mean increased overall energy consumption.
If we can’t even build data centers, the least disruptive industrial use possible, there’s no hope to reindustrialize the US or anywhere outside of China.
this is a story about a proprietary accelerator being built/designed by a token provider. and you think they're going to return the efficiency gains to the customer instead of capture the value for themselves? interesting take.
We should be mindful of the context that many of these providers VERY likely have been selling their subscriptions at a substantial loss
So as much as i agree “more profits to stakeholders screw the customer”, i think its more of an emergency to get to profitability before the music stops.
It's so funny to see FP4.... I remember 20 years ago being asked what sort of HPC we needed in genomics, and the answer was basically, "lower precision, faster" for the stuff I was working on. But FP4 is, well, almost comical.
One thing not on that comparison table: die size. If I'm understanding that correctly, it's about the same as the Rubin, but at 1/3 the number of NVFP4 PFLOPs. (The text disagrees with the table, I'm taking the table as truth, perhaps that's wrong...)
Agree, I remember when even half precision made its way into C# sometime around 2020 (I didn’t know much about ML then) and I thought, well I guess that’s a worthwhile tradeoff but I can’t imagine going lower. Lo and behold (1-bit Bonsai) how much lower you could go.
This is most impressive. The interesting question to me, is outside of the LLM accelerator space: will generalized chips have massive leaps in performance once LLM technology is used to create the next generation? In general, will we see rapid advances while we extract the value of these models in creating architectures? I'm so far removed from the space that this is a very naive interpretation of all this, but I'm curious.
Well Sam Altman finally has built a moat against Chinese open weight AI. Well done. But what will this mean for Cerebras?
I remember when Tesla was building its own inference chips, and after about 2 years and billions spent, the whole effort was scuttled b/c they simply could not keep up with the iteration and R&D cycles of dedicated chip companies. I suspect the same will be the case with OpenAI vs Cerebras + Nvidia/Groq
> Well Sam Altman finally has built a moat against Chinese open weight AI
Hes got a press release.
The issue is, baking something to silicon requires discipline and about 2 years.
This isn't something you can just change your mind on halfway through. Trust me, I know. You need a clear vision of what you want to support, why and what bits of a chip you need to achieve that.
Cerebras is targeting a distinctly different point on the cost/latency curve. They are betting that there will be some high value applications where latency and not just throughput is super important.
> and after about 2 years and billions spent, the whole effort was scuttled b/c they simply could not keep up with the iteration and R&D cycles of dedicated chip companies
That sounds quite like...nonsense?
Chip companies work on years-long cycles. They know today what are they launching 4-5 years from now.
When people talk about the commodification of inferencing, they imagine a future where everyone has access to frontier models and can run them at the same cost, and what will actually happen is closer to the commodification of _oil_, where only a few companies have the scale to produce it at a competitive price, and advances like this are _why_.
Once models are more or less interchangeable, the price of LLMs will drop to essentially the price of energy required to run them, and the big labs will be able to run them cheaper than anyone else.
I don't believe models will be commodified because each model is unique with strengths and weaknesses. Its not like Steel which is more or less the same no matter where you purchase it from.
If what you said were true, you would hardly see people complaining about the quality of Opus 5 or good writing from Sol. But people do.
The same level of intelligence gets roughly 10x cheaper per year. So you might both be correct where a large part are commodity tasks but frontier is hard and valuable and not commodities.
This depends heavily on what the use-case is. Yes, if it's a coder making software and having to read LLM output then writing style matters. If the LLM is used in an automated data processing pipeline with a capped level of complexity, entirely different aspects matter and LLMs become more interchangeable.
How can OpenAI mass produce this chip at scale more economically than Nvidia which has experience in the supply chain and scale efficiencies to do it efficiently?
NVidia has enormous operating margins, so a competitive solution doesn't have to match or beat NVidia's scale efficiencies; it just has to beat delivered cost.
One objective of the project might be simply to provide credible negotiating leverage when dealing with existing suppliers like NVidia. You don't have to deploy at scale for that to work, but you do have to look like you could if pushed hard enough.
> NVidia has enormous operating margins, so a competitive solution doesn't have to match or beat NVidia's scale efficiencies; it just has to beat delivered cost.
But then that means you have no actual moat against the behemot, right? Your competitor can move into the market as soon as they want to, at much better cost (so at slightly better price)... and Nvidia certainly can adapt much faster around hard hardware specs innovation than a new entrant ever could.
In the short and medium term, it probably won't be more economical to produce for OpenAI. Where OpenAI is benefitting from their own chip is being able to tailor it to their models and workloads. When you buy off the shelf Nvidia, its not perfectly tailored and OpenAI has to spend marginally more to run off that chip. At the scale OpenAI is operating at and plans to operate at, that margin becomes pretty big $$
Story says they're power limited. That's half-true. Actually they're water-limited. To generate power, you need water. To cool chips, you need water. If you try to use less water on one side, you need more water on the other side (it's physics ya'll, making and using energy generates heat which requires dissipation). The world's freshwater is diminishing while also being consumed at an alarming rate. The future AI oligarchs are whoever controls the most water.
The other side of the conversation is the idea that large models in DCs on custom silicon is the future. Maybe for enterprise? But consumers will eventually (10 yrs) have affordable hardware designed to run crazy-good local models (more RAM + higher bandwidth). That will take pressure off of datacenters, but also reduce AI profits, and move that money to consumer chip/device makers. Apple is once again the biggest winner. Nvidia consumer chips might get cheaper, but nerfed, to encourage datacenter use where they make more money. I'm hoping AMD can stop being terrible at software so that when we finally have their better hardware we can actually use it.
For datacenters specifically I've never understood what specifically consumes the water. Arent the water-cooling loops closed, so the water just cycles around and around and around?
Nvidia buys the memory it uses on its GPUs, same as all other ASICs.
To give some context, Intel started making DRAM, I think they were actually the company that came up with modern memory techniques. They exited the market and pursued a more lucrative moat with CPUs.
People keep saying stuff like this without understanding what it takes to make RAM. It's one of, if not the most, heavily patented things in the world. The second you dip your toes into those waters the lawsuits begin.
If somehow you get around the patent issues, you're now faced with huge research and development costs, fabs to build, processes to sort out and all of that has very high failure rates.
Last time I checked Micron was the largest patent holder in the world and even for them this is a hard area where they are number 3 in the market.
RAM chips are not hard to produce compared to many other types of semiconductors; Intel started in the memory game and left because the margins weren't great and they were going to fold. The failure rates on these chips are actually very tolerable; you can have a very bad yield and still have a viable chip due to things like ECC.
I think they talked about this being general purpose chip but I would think that Anthropic/OpenAI are at the scale now they could bake LLM weights into chips themselves.
For example, GPT Sol baked into a custom chip run for $100M that runs 10x as fast and 10x as cheap should pay for itself as long as the chip is useful for long enough.
While 2 years ago nothing was useful more than 1 year long, there are many older models in use now (e.g. Haiku 4.5, GPT-OSS 120b), and I expect this trend to continue.
I know this is what Taalas was doing (acquired by AMD), here was their demo, https://chatjimmy.ai/ which is based on Llama 3.1 8B. It feels like this should start to happen soon.
Probably! But not viable yet; the chips would be about a year behind SOTA. Note the ~16 months that the article quotes as being insanely fast to get this chip to tape-out (read: start producing). We'll have to bootstrap our way there: AI is actively being used to get us closer to viable lead times for this.
Unfortunately, there's some real physical constraints: IIRC, manufacturing a wafer takes on the order of a month, start to finish, for the physical processing.
Maybe once LLM improvements asymptote further?
tapeout could shrink but days per mask layer (DPML) does not have much margin..
My guess is we only see this once they start saturating computer use benchmarks. That's a use case which would be extremely valuable at the right costs/speed, but the current models just aren't there yet.
etched tried this.... it didn't go very well
I love how now you have to consider the possible s** posting motivation behind analysis of a trillion dollar industry being conducted at a world-class level by a bunch of ex Reddit and 4Chan adjacent mods -- it's one of the best stories in AI that SemiAnalysis is not cut from the same cloth as Gartner McKinsey et al
SemiAnalysis’ founder was roommates with Anthropic people, not OpenAI, so he may be slightly (very slightly) more objective here.
s** posting? sex posting?
shit posting
Thats what I thought too but then it would be s**?
i see 'hunter2'
s**?
Edit: OK, hn is removing one *
If it's trying to convert it to italics, you may have to use a backslash to escape them
Or double them up: s****** gives s***.
semianalysis is pretty good
Why censor yourself?
Bots do that because other platforms remove or hide posts with bad words
The semianalysis people have scripts which incorrectly count their numerators and Denominators all the time. All their benchmarks are flawed. It is such a slipshod operation and they charge exorbitant amounts of money for it.
"not cut from the same cloth as Gartner McKinsey et al"
Yeah, those guys aren't biased at all.
> I love how now you have to consider the possible s*** posting motivation behind analysis of a trillion dollar industry being conducted at a world-class level by a bunch of ex Reddit and 4Chan adjacent mods
I mean, previously you could have said something much the same except substitute "frat boys".
I hadn't seen the token/Joules comparison with human speech before. Humans are still 22x more efficient, which is not that far considering the rate of progress in this area.
The 20W number includes EVERYTHING else the brain does. The chips/models are literally only producing tokens. Let's see an LLM drive a robot harness and have the robot produce speech, as well as move through 3D space, keep track of metabolic needs, etc. etc. etc. before we compare efficiencies. That is even assuming the tokens are of equal quality. This comparison is currently Apples and Oranges.
kind of a moot point if you can't get your brain to not do everything else. I think it's a fun comparison, even if it's not a 100% equivalence.
Probably not when you consider the training cost and upkeep expenses, not to mention the depreciation…
I mean, surely when quality is accounted for the difference is significantly higher
Or maybe significantly lower.
This means that they're going to want to IPO soon - this is good news for investors + they need the capital.
No, this is because they want to IPO soon.
If the chips weren't this compelling they would have something different to announce.
These are paperclip maximizers who just happen to wear human skin - there is no underlying premise nor ideological goal.
Continued hardware improvements really make it hard for me to believe token prices will not continue to plummet.
This may just be a classic case of Jevons paradox: https://en.wikipedia.org/wiki/Jevons_paradox
In short, better hardware will drive down token cost in the near-term, but will drive up the demand for tokens as it gets cheap enough for other sectors to start to use it heavily.
It comes from steam engines where economists originally thought that coal demand would plummet with more efficient engines, but it actually just meant that we found more uses for steam engines.
I cannot fathom tbe mindspace that leads to this being anythning but a simple observation. It might even make it all the way to obscure trivia or interesting observation, but paradox? Certainly not.
If you make the thing more accessible, more people are going to use it. If it consumes a resource, the use of that resource will increase in relation to the increased adoption.
Hydrogen engines use hydrogen. Making hydrogen engines cheaper will increase adoption. Increased adoption will increase consumption of hydrogen.
Like, who'd have ever thought "oh wow, we've gotten to the point that people can have a computer in their own home, surely electricity use will plummet." or "oh wow, more than 50% of the population can now feasibly purchase an internal combustion engine, surely fuel demand will plummet."
In the original context they'd decreased the cost and complexity of steam engines. Anyone who'd seen the amount of money people were making with the old steam engines would be clearly incentivized now that they have the same economic opportunity available for less capital up front. Therefore more steam engines, therefore more fuel demand. Who in their right mind would really be surprised that resource consumption went up when people could and did build more machines?
This is exactly what I see happening now.
Codex keeps doing these usage resets. What do I do? Burn even more tokens than ever before. I know I'm not the only one.
If we are applying Jevons paradox to this then the unit being consumed is not tokens but the inputs for token production - power, capex, something else. To draw an analogy to the steam engine, coal:electricity::mechanical-work:tokens. Jevons paradox does not talk about mechanical work becoming cheaper in the short term setting up a sort of rubber band of demand creating spiking prices for mechanical work. Compared to the renaissance, mechanical work was much cheaper throughout the industrial revolution and remains cheaper to this day. We can still definitely say that the easier it is to produce tokens, the cheaper they will be.
the total cost spent on tokens may go up, but i just cant imagine per token costs going up
Depends on compute capacity. If we become supply constrained on tokens, then prices will necessarily go up.
no they dont because inference stacks are getting more efficient and models are getting more intelligent per parameter.
I think you're reducing a very complex thing (the global economy) into a very simplistic model (Jevons' paradox) and thinking both are the same thing. This has no predictive power or rigor. You're just wishing things would happen as they did before, without considering that conditions and situations change significantly, and instead of Jevon's paradox, we look back at today 50 years from now and talk about Jensen's paradox.
This doesn't mean the concept is BS, but one single concept cannot explain away everything in such a system.
There is just so much downward pressure on token price, from every direction. We would need a completely new understanding of economics to explain why the price shouldn’t go down. Or market collusion/regulatory manipulation.
The demand for them is growing _per person_, not just across the wider economy, if tokens cost half as much but you want to use 3 times as much you're going to have to pay more.
Maybe 1000s of tokens per second unlocks realtime robotic decision making, and now every robot needs to continuously stream tokens to and from the cloud to operate. That could 1000x demand overnight, just to speculate :)
I would very much like it if anything that moves with appreciable mass is governed locally just in case the link drops and/or latency suddenly goes up. Motion is very unforgiving and accidents will happen if that's not taken into account.
Think about the agents buying computers for their agents. /s
The price has been going down for ages, its not clear what you are pointing at
Token prices coming down means nothing if the models keep wasting them
Yeah but is it really even as good as Rubin? Seems just competitive.
Hopefully this also means billionaires can stop trying to drop data centers into residential neighborhoods with zero noise control and polluting on-site generators, signing local politicians on with NDAs, calling for eminent domain to seize homes to build power lines to data centers, etc. etc. etc. Not to mention the water use controversy.
Token prices plummeting is probably a good thing, but not without the regulatory backstops that prevent these effectively industrial facilities from being operated with no regard for the externalities they impose on people who live near them.
>polluting on-site generators
how much pollution do you believe modern gas-turbine engines to produce?
>Not to mention the water use controversy.
what percentage of US water usage do you believe is by AI data centers?
Nah, Jevon’s Paradox says that cheaper tokens will mean increased overall energy consumption.
If we can’t even build data centers, the least disruptive industrial use possible, there’s no hope to reindustrialize the US or anywhere outside of China.
this is a story about a proprietary accelerator being built/designed by a token provider. and you think they're going to return the efficiency gains to the customer instead of capture the value for themselves? interesting take.
OpenAI just dropped the price of Luna by 80% and Sol by 20-30%
and amazon shipping used to be free without prime, and uber used to be cheaper than taxis, and airbnb used to be cheaper than hotels.
you really don't get it?
almost every pure tech commodity has gone down in price
- gpus
- retail computers
- laptops
- ~gpu~ appliances like washing machines
- cloud computing
i think you don't get how economy usually works in tech
GPUs and laptops and memory and storage are all crazy expensive
listing gpu's here is crazy considering the current prices
I'm especially enjoying how RAM and SSDs are going down in price.
We should be mindful of the context that many of these providers VERY likely have been selling their subscriptions at a substantial loss
So as much as i agree “more profits to stakeholders screw the customer”, i think its more of an emergency to get to profitability before the music stops.
> We should be mindful of the context that many of these providers VERY likely have been selling their subscriptions at a substantial loss.
what makes you think this?
Because everyone keeps saying this so it must be true. Real "it is known" kind of vibe with these statements.
Yes, I can bet on this happening. If anything, this is a net gain for consumers as it is a competitive market.
go ahead and bet: alibaba is a publicly traded company
I guess special hardware is the new moat in AI.
Maybe the money will still flow into this industry after all
It's so funny to see FP4.... I remember 20 years ago being asked what sort of HPC we needed in genomics, and the answer was basically, "lower precision, faster" for the stuff I was working on. But FP4 is, well, almost comical.
One thing not on that comparison table: die size. If I'm understanding that correctly, it's about the same as the Rubin, but at 1/3 the number of NVFP4 PFLOPs. (The text disagrees with the table, I'm taking the table as truth, perhaps that's wrong...)
Agree, I remember when even half precision made its way into C# sometime around 2020 (I didn’t know much about ML then) and I thought, well I guess that’s a worthwhile tradeoff but I can’t imagine going lower. Lo and behold (1-bit Bonsai) how much lower you could go.
Ternary?
This is most impressive. The interesting question to me, is outside of the LLM accelerator space: will generalized chips have massive leaps in performance once LLM technology is used to create the next generation? In general, will we see rapid advances while we extract the value of these models in creating architectures? I'm so far removed from the space that this is a very naive interpretation of all this, but I'm curious.
All of these words spilled and no mention of the ISA.
Well Sam Altman finally has built a moat against Chinese open weight AI. Well done. But what will this mean for Cerebras?
I remember when Tesla was building its own inference chips, and after about 2 years and billions spent, the whole effort was scuttled b/c they simply could not keep up with the iteration and R&D cycles of dedicated chip companies. I suspect the same will be the case with OpenAI vs Cerebras + Nvidia/Groq
> Well Sam Altman finally has built a moat against Chinese open weight AI
Hes got a press release.
The issue is, baking something to silicon requires discipline and about 2 years.
This isn't something you can just change your mind on halfway through. Trust me, I know. You need a clear vision of what you want to support, why and what bits of a chip you need to achieve that.
Cerebras is targeting a distinctly different point on the cost/latency curve. They are betting that there will be some high value applications where latency and not just throughput is super important.
> and after about 2 years and billions spent, the whole effort was scuttled b/c they simply could not keep up with the iteration and R&D cycles of dedicated chip companies
That sounds quite like...nonsense?
Chip companies work on years-long cycles. They know today what are they launching 4-5 years from now.
Competition is good for all of us, we will get better and faster chips.
Or at least Nvidia GPUs will become slightly cheaper for regular consumers again
That's if any datacenters are allowed to be built with them.
There is probably a ~50% chance that the next Dem candidate for presidency runs on a national datacenter moratorium or something equally as crippling.
The pricing of GPUs themselves aren't really the problem: it's the VRAM that comes with them.
When people talk about the commodification of inferencing, they imagine a future where everyone has access to frontier models and can run them at the same cost, and what will actually happen is closer to the commodification of _oil_, where only a few companies have the scale to produce it at a competitive price, and advances like this are _why_.
Once models are more or less interchangeable, the price of LLMs will drop to essentially the price of energy required to run them, and the big labs will be able to run them cheaper than anyone else.
I don't believe models will be commodified because each model is unique with strengths and weaknesses. Its not like Steel which is more or less the same no matter where you purchase it from.
If what you said were true, you would hardly see people complaining about the quality of Opus 5 or good writing from Sol. But people do.
The same level of intelligence gets roughly 10x cheaper per year. So you might both be correct where a large part are commodity tasks but frontier is hard and valuable and not commodities.
> I don't believe models will be commodified because each model is unique with strengths and weaknesses.
They are all converging.
This depends heavily on what the use-case is. Yes, if it's a coder making software and having to read LLM output then writing style matters. If the LLM is used in an automated data processing pipeline with a capped level of complexity, entirely different aspects matter and LLMs become more interchangeable.
How can OpenAI mass produce this chip at scale more economically than Nvidia which has experience in the supply chain and scale efficiencies to do it efficiently?
NVidia has enormous operating margins, so a competitive solution doesn't have to match or beat NVidia's scale efficiencies; it just has to beat delivered cost.
One objective of the project might be simply to provide credible negotiating leverage when dealing with existing suppliers like NVidia. You don't have to deploy at scale for that to work, but you do have to look like you could if pushed hard enough.
> NVidia has enormous operating margins, so a competitive solution doesn't have to match or beat NVidia's scale efficiencies; it just has to beat delivered cost.
But then that means you have no actual moat against the behemot, right? Your competitor can move into the market as soon as they want to, at much better cost (so at slightly better price)... and Nvidia certainly can adapt much faster around hard hardware specs innovation than a new entrant ever could.
In the short and medium term, it probably won't be more economical to produce for OpenAI. Where OpenAI is benefitting from their own chip is being able to tailor it to their models and workloads. When you buy off the shelf Nvidia, its not perfectly tailored and OpenAI has to spend marginally more to run off that chip. At the scale OpenAI is operating at and plans to operate at, that margin becomes pretty big $$
By leveraging the experience Broadcom has in this area. Still remains to be seen how that goes when they want to scale production.
Replace OpenAI with Apple and Nvidia with Intel.
Story says they're power limited. That's half-true. Actually they're water-limited. To generate power, you need water. To cool chips, you need water. If you try to use less water on one side, you need more water on the other side (it's physics ya'll, making and using energy generates heat which requires dissipation). The world's freshwater is diminishing while also being consumed at an alarming rate. The future AI oligarchs are whoever controls the most water.
The other side of the conversation is the idea that large models in DCs on custom silicon is the future. Maybe for enterprise? But consumers will eventually (10 yrs) have affordable hardware designed to run crazy-good local models (more RAM + higher bandwidth). That will take pressure off of datacenters, but also reduce AI profits, and move that money to consumer chip/device makers. Apple is once again the biggest winner. Nvidia consumer chips might get cheaper, but nerfed, to encourage datacenter use where they make more money. I'm hoping AMD can stop being terrible at software so that when we finally have their better hardware we can actually use it.
For datacenters specifically I've never understood what specifically consumes the water. Arent the water-cooling loops closed, so the water just cycles around and around and around?
They evaporate the water which is what makes it cool so effeciently.
Evaporative cooling does not necessitate an open loop system
Yes they are for water cooling.
This only makes sense if you never looked at comparative water usage rates and available water.
Why they don't research how to make their own RAM and they have to buy it from the common market?
They should GTFO with this crap.
Create barriers to computing for ordinary people while milking businesses for tokens.
Building a custom-designed ASIC is much easier than producing state of the art memory chips.
There's a reason why Micron and Nvidia are the crown jewels of American technology right now and for the foreseeable future.
Nvidia buys the memory it uses on its GPUs, same as all other ASICs.
To give some context, Intel started making DRAM, I think they were actually the company that came up with modern memory techniques. They exited the market and pursued a more lucrative moat with CPUs.
Nvidia does not make RAM
That doesn't excuse them from wrecking the market for ordinary person.
NVIDIA produces memory?
Fabless AFAIK. And that's the actual problem - drawing up CAD diagrams doesn't help if the factories are fully booked out.
A state of the art GPU is much harder to design & produce at scale and than an internal ASIC.
People keep saying stuff like this without understanding what it takes to make RAM. It's one of, if not the most, heavily patented things in the world. The second you dip your toes into those waters the lawsuits begin.
If somehow you get around the patent issues, you're now faced with huge research and development costs, fabs to build, processes to sort out and all of that has very high failure rates.
Last time I checked Micron was the largest patent holder in the world and even for them this is a hard area where they are number 3 in the market.
RAM chips are not hard to produce compared to many other types of semiconductors; Intel started in the memory game and left because the margins weren't great and they were going to fold. The failure rates on these chips are actually very tolerable; you can have a very bad yield and still have a viable chip due to things like ECC.
Intel entered the memory space because they partnered with Micron. They left the memory space when Micron pulled out of the partnership.
Intel started making DRAM in 1970, Micron was founded in 1978.
Yes, it is difficult, but shafting working class is easy, therefor it is okay.
If the rich decided to buy all drinking water, you would probably be saying that's okay, making water is difficult, shortly before dying.