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Jensen Huang Admitted He Was Facing an "Avalanche" of Excess Wafers and Memory

37 points oscarfr 37 minutes ago 21 comments

jimnotgym 29 minutes ago | parent

Did the 'can't keep it in his trousers' crisis actually give him the perfect way out?

dzonga 21 minutes ago | parent

r u saying there's potentially b200s sitting out there in warehouses that could be sold at 80%+ discounts ?

cyanydeez 20 minutes ago | parent

no, probably just contracts to build, and he's forcing his circular economics to force partners to agree to buy them at some point in the future.

There are, however, reports that there are a bunch of "dark chips" that data centers can't bring online because of missing power requirements.

ddxv 20 minutes ago | parent

> In an August meeting, Huang belittled Kress for questioning the deals, calling her “a deer in the headlights”. To justify why Nvidia needed to financially backstop OpenAI and smaller cloud providers to keep buying its GPUs, Huang admitted that Nvidia was caught in a massive squeeze.

Are these two sentences related? Is it saying Jensen questioned her on the circular financing? Or was she questioning him? A bit lost on that

oscarfr 19 minutes ago | parent

There seems to be some evidence of "GPUs sitting in warehouses awaiting to be plugged in". But it seems to be mostly/only Ed Zitron pushing the agenda that it's not as planned and that there is oversupply of GPUs.

All hyperscalers have in the last 2 months stated that they have more demand for AI compute (I guess GPUs & their own chips) than they can supply.

Nvidia might have been trying to spread the demand over more providers (neoclouds, and seemingly China) and provided financing to enable that.

It's not clear that this means there is an oversupply of reserved wafer capacity and Nvidia GPUs. But if datacenter construction slows down it might affect the GPU demand as they can't be plugged in.

watwut 10 minutes ago | parent

> There seems to be some evidence of "GPUs sitting in warehouses awaiting to be plugged in". But it seems to be mostly/only Ed Zitron pushing the agenda that it's not as planned and that there is oversupply of GPUs. > All hyperscalers have in the last 2 months stated that they have more demand for AI computing (I guess GPUs & their own chips) than they can supply.

The two things are not in the opposition at all. You need datacenter to plug the chip in. If you dont have the datacenter already build, you cant use the chip.

oscarfr 5 minutes ago | parent

Agreed.

The question is if it's planned by the purchasers. That they have datacenter capacity coming online according to plan and any "GPUs in warehouses" is just the plan to ensure there are chips to install when the datacenters are ready.

Or that they purchased out of fear, to corner the market, or expecting datacenter capacity that is delayed; and will soon stop purchasing as they don't have datacenter capacity coming online to install the chips they already bought. And noone else neither has that datacenter capacity.

esseph 8 minutes ago | parent

[delayed]

happymellon 4 minutes ago | parent

> [...] pushing the agenda that it's not as planned and that there is oversupply of GPUs.

I don't read that it is not as planned, there is high demand from everyone but it appears to be similar to the over recruitment of engineers. They have FOMO, and they also want to block competitors.

> All hyperscalers have in the last 2 months stated that they have more demand for AI compute (I guess GPUs & their own chips) than they can supply.

I certainly have not had any issues getting as much access as I would like. It just costs. Which would imply that the scarcity is manufactured to drive up pricing rather than availability.

> if datacenter construction slows down it might affect the GPU demand as they can't be plugged in.

I think this is the crux of the matter from Nvidia's point of view, that's if they weren't already impacted by the power limitations for customer installations.

maxerickson 3 minutes ago | parent

There was a post about how growth in the data center space was slowing, so AI must be over. The evidence seems to be that we've reached whatever growth capacity existed or was planned, rather than any drop off in demand.

infecto 3 minutes ago | parent

I could never track Zitrons argument. I would not be surprised if there are gpus sitting around, we have known for at least the past year that hyperscalers have been unable to build enough data centers. They continue to state demand exceeding supply, that’s kind of why the neoclouds have even become a thing. It does not indicate to me that those gpus are not going to be used or even if companies overpaid for them.

LoganDark 18 minutes ago | parent

Of course they were. They bought up literally as much as they could manage, because anything they didn't would be bought up by someone else. It's literally a use it or lose it market right now. This is not a problem. Just stockpile it.

rconti 7 minutes ago | parent

…. But they’re not using it? Why not buy when you’re ready?

Unless you’re convinced you’re going to be able to build faster than you can buy _in the future_ of further increased AI demand and easy painless data center construction.

wongarsu 16 minutes ago | parent

I'm sure Nvidia would have no issue selling this "avalanche" if they just dropped prices a bit

We went with AMD for our $300k AI server, then after two months of delays were told it will be delayed another 10 months. Getting the same amount of VRAM from Nvidia remains out of our budget

Meanwhile "reasonably-sized" cards like a RTX 6000 Pro Blackwell or even a consumer RTX 5080 still trade for twice what they cost in January

oscarfr 11 minutes ago | parent

And secondarily, other chip manufacturers (e.g. hyperscalers, frontier labs, AMD) are likely interested in "purchasing" any excess wafer capacity.

Potentially less revenue and lower margins for Nvidia, but not necessarily supply they cannot get rid off.

Neywiny 6 minutes ago | parent

Honestly agreed. I would gladly switch back from AMD if Nvidia lost their multiplier over how it was a few years ago (and got rid of that new power connector). But my few thousand is nothing to Oracle and co's hundreds of billions. Even your $300k. So if the circular financing does pay off, it'll pay off big.

Stevvo 7 minutes ago | parent

[delayed]

bix6 4 minutes ago | parent

Nobody ever listens to the CFO and they should. The one person who actually keeps a company on track is the person who looks at the actual numbers. I have seen this over and over it’s a freaking meme.