I've laid out my thesis at length in past comments, which I don't care to repeat, but the gist is: During the ~2010-2014 period (the time where the ecosystem gap really widened), Nvidia purposfully didn't implement OpenCL 2.0 while pushing CUDA, which made cross-platform solutions uncompetitive.
Nvidia dreams of a world where there are lots of "open" alternatives to OpenAI, like there are lots of open game engines and lots open software in general. All buying closed Nvidia chips.
- Monopsony is the inverse of Monopoly -- one buyer. Walmart is often a monopsony for suppliers (exclusive or near exclusive).
- Desire for vertical integration and value extraction, related to #1 but with some additional nuances
They really need to avoid the situation in the console market, where the fact there's only 3 customers means almost no margins on console chips.
In 2025 (fiscal year), Nvidia only reported two revenue segments: compute and networking ($116B revenue) and graphics ($14.3B revenue). Within the compute and networking segment, three customers represented 34% of all revenue. Nvidia's gross margins for fiscal 2025 were 75% [2].
In other words, this hypothesis doesn't fit at all. In this case, having more concentration in extremely deep pocketed customers competing over a constrained supply of product has caused margins to sky rocket. Moreover, GP's claim of monopsony doesn't make any sense. Nvidia is not at any risk of having a single buyer, and with the recent news that sales to China will be allowed, the customer base is going to become more diverse, creating even more demand for their products.
[1] https://s201.q4cdn.com/141608511/files/doc_financials/annual...
[2] https://s201.q4cdn.com/141608511/files/doc_financials/2025/a...
The only example I used was the console market which has been ruined because of this issue. They generally left that market because it was that horrible.
AMD however has to design new special APUs for Xbox and PS. Why do they do that? They could just decide to step away from the tender but they won't because they seem to be desperate for any business. Jensen was like that 20 years ago but he has learned that some business you simply step away from.
Prior to the AI boom, the quality of GPUs slightly favored NVidia but AMD was a viable alternative. Also, there are scale differences between 2025 and before the AI boom -- simply put, there was more competition in the market for a smaller bucket and favorable winds on supplier production costs. Further, they just have better software tooling through CUDA.
Since 2022 and the rise of multi-billion parameter models, NVidia's CUDA has had a lock on the business side, but face rising costs due to terrible trade policy by the US, significant rebound from COVID as well as geopolitical realignments, inflation on the workforce, and rushed/buggy power supplies as their default supply options have made their position quite untenable -- mostly CUDA is their saving grace. If AMD got their druthers about them and focused they'd potentially unseat NVidia. But until ROCm is at least _easy_ nothing will happen there.
> "rising costs"
Nvidia's margin expansion would suggest otherwise. Or at least, the costs are not scaling with volume/pricing. Again, all we need to do is look at the margins.
> "their position quite untenable ... But until ROCm is at least _easy_ nothing will happen there"
Seems like you're contradicting yourself. Not sure what point you're trying to make. Bottom line is, there is absolutely no concern about monopsony as suggested by the GP. Revenue is booming and margins are expanding. Will it last? Who knows. Fat margins tend to invite competition.
Feels like a modern euphemism for “subjugate their neighbors”.
Still it feels awful black and white to phrase it that way when this is a clear net good and better alignment of incentives than before.
Meanwhile, the companies running data centers will look for ways to support alternatives to Nvidia. That’s how they keep costs down.
It’s a good way to play companies off each other, when it works.
A company like Cerebras (founded in 2015) proves that this is true.
The moat is not in computer architecture. I'd say the real moat is in semiconductor fabrication.
Semiconductor fabrication is a high risk business.
Nvidia invested heavily in CUDA and out-competed AMD (and Intel). They are working hard to keep their edge in developer mindshare, while chasing hardware profits at the same time.
No, but seeing how easily they run on Apple hardware, I don't understand your point, to be honest.
Yes. I'd never touched any of that stuff and then one day decided to give it a shot. Some how-to told me how to run something on Linux which had a choice of a few different LLMs. I picked one of the small ones (under 10B) and had it running on my AMD APU inside of 15 minutes. The weights were IIRC downloaded from huggingface. The wrapper was not. Anyway, what's the problem?
BTW that convinced me that small LLMs are basically worthless. IMA need to go bigger next time. BTW my "old" 5700G has 64GB of RAM, next build I'll go at least double that.
Oh my.
Please people, try to think back to your engineering classes. Remember the project where you worked with a group to design a processor? I do. Worst semester of my life. (Screw whoever even came up with that damn real analysis math class.) And here's the kicker, I know I'll be dating myself here, but all I had to do for my part was tape it out. Still sucked.
Not sure I'd call the necessary processor design work here "relatively easy"? Even for highly experienced, extremely bright people, this is not "relatively easy".
Far more easy to make the software a commodity. Believe me.
I mean this is like saying that a class for building compilers sucked. Still, companies make compilers, and they aren't all >$1B companies. In fact, hobbyists make compilers.
That you are comparing designing and writing a compiler with designing and manufacturing a neural processor is only testimony to the futility of my attempt to impress on everyone the difference. So I'll take my leave.
You have a good day sir or ma'am.
In the longer run, anything that is very capital intensive, affects entire industries, and can be improved with large amounts of simulation will not be a moat for long. That's because you can increasingly use AI to explore the design space.
Compute not a commodity yet but may be in a few years. Semiconductor fab will take longer, but I wouldn't be surprised to see parts of the fabrication process democratized in a few years.
Physical commodities like copper or oil can't be improved with simulation so they don't fall under this idea.
It's like trying to take on UPS with some new, not quite drop-in logistics network. Theoretically its just a bunch of empty tubs shuffling around, but not so easy in practice. You have to be multiples better than the incumbent to be in contention. Keep in mind for the startups we don't really know who is setting money on fire running models in unprofitable configurations for revenue.
CUDA is what they sell, it makes more sense for them to charge for hardware and give the hardware-locked software away for free.
We have dozens of companies building foundational models and they all target a single vendor to supply all the hardware? Make it make sense! Yes, I know models run on AMD too, but the fact is, Nvidia, who's clearly doing a great job, is a literal monopoly. We need viable alternatives.
This deal was done with CirraScale, who are great people. It is important to point out that they are also one of the 13 official AMD Cloud Partners. I'm on the list too.
Being open is great, but if over the course of 6 months 3 different entities (including 2 well known universities) apply and send more than a dozen follow ups to 3 different "Reach out to us!" emails with exactly 0 response, the "open" starts sounding like it's coming from Facebook.
Any country tries to dominate any field if they can do it, it's just human nature. Why is that a bad thing?
That constant competition for superiority between nations is how humanity has evolved from hunter gatherer to having tractors, microwave ovens, airplanes, internet and penicillin.
[Insert xkcd new standard image here]
So what? Does that change anything in how things work in reality? Everyone knows it, so why pussyfoot around it?.
Why are people nowadays so sensitive about saying the truth of how things work? Have people been coddled that much that they've can't handle reality? A good life lesson is that the world does not revolve around your feelings.
So what do you propose? Should the US stop development till other countries catch up?
Again, go have this discussion with the LLM you trust, it's much more informative.
India also has an advanced space program despite many of its people starving and not having running water.
If you decide to invest in advanced tech development only when all your citizens don't have any issues, tech development would stand still.
The stated "US dominance" goal just pays lip service to what appeals to the funders, kind of like how supercomputing projects traditionally claim that they contribute to curing disease or producing clean energy. (Even if it's something far removed from concrete applications, like high fidelity numerical simulations of aqueous solutions.)
Oops, sorry that’s next year’s news. Anyway, this is all ringing very familiar.
Imagine running a model trained by the degenerates on 4chan. Models that encourage you to cheat on your homework, happily crank out photos of world leaders banging farm animals, and gleefully generate the worst gore imaginable. And best of all, any junior high schooler on the planet can do it.
That’s how you know this technology has arrived. None of this sanitized, lawyer approved, safety weenie certified, three letter agency authorized nonsense we have now. Until it’s all local, it’s just an extension of the existing regime.
It has been done before:
Congratulations to the team at Ai2!
I'm surprised we haven't heard about OpenAI pushing a facebook style OpenCompute project or ARM (acorn, apple, VLSI) or similar for the stack below them.
[1]: https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/
I don’t want to be cynical, it’s just that the world has left very few options otherwise.
datadrivenangel•5mo ago
NSF and NVIDIA award Ai2 $152M to support building a fully open AI ecosystem
To better indicate that this is not related to OpenAI and that the group intends to release everything needed to train their models.
nativeit•5mo ago