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Cake day: July 11th, 2023

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  • The principal of supply and demand still applies, they will cut prices up until the point they either go out of business or they find a sufficient number of buyers.

    Companies like Nvidia, Micron and Samsung are currently chasing massive profits off enterprise customers, but will come crawling back to consumers once the AI bubble bursts (assuming they survive the resulting market collapse).

    As an example, if Nvidia can turn one TSMC wafter into one AI accelerator that they can sell for $40K, or into ~5 RTX 5090s they can sell for $2K/ea - they will sell as many of the $40K cards as they can, and only use failed wafers to try and satiate RTX 5090 demand.

    But if there are no more AI customers, they will be forced to drop prices in order to shift more volume. If they can’t drop prices further due to wafer costs, then they will pass up wafer allocations from TSMC.

    If TSMC sees too many wafers free up - they will be forced to drop prices to all customers (AMD, Apple etc.) to try and pick up the slack. They in turn will need to drop prices in order to try and increase sales volumes.

    This will have a downwards pressure on prices and a “return to the mean” moment for tech prices. It will just be a painful couple of years until we get to that point, and honestly with the way things are currently going - it will be the least of our worries.








  • It’s not as much a “feel-good” story as comments who haven’t read beyond the headline might make you believe:

    The PIF values its total investments at nearly $1 trillion in assets, but a significant percentage of these are hard-to-sell assets with no public valuation; as a result, the NYT reports that the PIF reps have told international investors that it is “unable to allocate” for the near future.

    Despite this, a spokesperson for the PIF, Marwan Bakrali, told the newspaper that it had $60 billion in cash and “similar financial instruments”.

    ETA: Its not as though they’ve lost a significant chunk of the fund, but rather that a sizeable portion of it is tied up in illiquid assets that can’t be readily sold, or valued and loaned against.

    Though there is some mention of some of their investments being in “distress”, so there is at least some good news?





  • IP/trademarks/copyrights/etc.

    This is likely going to be the main reason for the takedown notices, Sony will be exercising their legal rights in order to defend their trademarks & copyrights on Concord assets.

    If a company doesn’t defend them vigorously, then any unlicensed works that are allowed to exist are then used as legal precedent moving forward to null/void such copyrights and trademarks.

    As an aside, Sony is a global corporation and can likely choose to write down these losses in the most preferred region to maximise the tax offset - so likely either the US, or Ireland.




  • The best way to think of them is as cousins; they are similar - but not exactly the same.

    They focus more on higher VRAM and CUDA cores compared to GPUs, while forgoing 3d acceleration capabilities.

    But they both come out of the same factories; so when the demand for AI cards is as high as it is now - and Nvidia can sell as many as it produces with a higher margin than GPUs, there is little incentive for them to produce more GPUs and sell them at a competitive price.

    So when the AI bubble bursts, demand for AI cards will crater - and there will be no financial incentive to mass produce them in such high quantities. This frees up production capacity at the TSMC factories, incentivising production of lower margin products like GPUs.

    Economics is largely a game of supply & demand; when supply outstrips demand, prices fall as sellers search for buyers. When demand outstrips supply prices go up as buyers search for sellers.



  • Assuming the AI bubble bursts before then, we might actually see somewhat reasonable pricing for next-gen consoles.

    A major reason why prices have remained so inflated for so long post-COVID is because data centres have been sucking up every bit of silicon that TSMC has been able to pump out for both Nvidia and AMD.

    But that would be honestly a very small upside, compared to what would likely be the Mother of All Stockmarket Crashes. The market cap of the Top 10 AI-related stocks is greater than the current US national debt, they aren’t in a position to be able to reasonably bail out those companies when it all eventually goes to shit, like they do in 2008.