In a hypothetical market with 100% ETFs, you’d have a status quo.
Edit: maybe not, since you have ETFs that invest in, say, Nasdaq only, which is tech oriented and would influence S&P500.
If you ever played Risk, or most other games, once the snowball starts, it's hard to stop it.
Of course, since the market has never been like this before, it's a speculation...
For example, if they are only two companies, say with 1T and 4T market cap. If one invests 5M into a total market ETF, 1M is allocated to company A and 4M to company B. But since company B is 4x bigger than company A, the upward price pressure is the same for both companies.
in five years, NVDA's business strategy will be like CocaCola's, forcing bottlers to buy their syrups.
Nvidia is using its revenues to quickly invest in bets that are simultaneously customers.
If anything, it's a triple win.
- taking advantage of cash it needs to deploy
- making new investments in areas NVidia wants to shape
- making new customers that continue to buy Nvidia GPUs, especially if they're successful
Some of these ventures may fail, but it's better than distributing dividends or issuing stock buybacks if you believe this technology will be useful in the future.
Companies doing this purely off of equity, stock valuation, and product/services agreements are even smarter as they're using pure hype to fund strategy.
Nokia today is sort of “everybody who was making networks in Europe and North America except Ericsson”.
It's like "if your going to sell chips to China, you have to spend some of the money funding non-Chinese tech".
Nokia's capabilities to deliver 5G networks is a direct competitor to Huawei, right?
Is Nvidia functionally an strategic hedge fund of the US Government? Would this fall under Jeffrey Sach's realm?
If you wanted something in the x86 space it was either Intel or AMD. AMD is a direct competitor. If I was Nvidia I'd have done something about Intel. At least stop them from crashing further.
They definitely did, Intel existing is probably an issue of national security at this point, if Intel fell then there'd be the risk of some other nation's company being part of the duopoly.
Mind elaborating? Who are the players in the duopoly?
SMIC has a DUV multi-patterning 7 nm node which is already economically uncompetitive with EUV 7 nm nodes (except for PRC subsidies) and the economics of DUV only get worse further down, but at least they're trying and will certainly be the first client to use the Chinese EUV machines, whenever those come online.
There's hardly any non-American CPU designers out there
Risc-V moved HQs to be a non-American CPU designer, but perhaps you don't find them credible (yet).
https://en.wikipedia.org/wiki/Concerns_over_Chinese_involvem...
https://www.bloomberg.com/news/features/2020-07-01/did-china...
https://www.politico.com/news/2020/02/13/us-charges-huawei-w...
Let's see if this investment leads to the final elimination of an EU tech company. Why does Finland permit this?
Pretty sure Nokia was glad to offload the handset business so they could feed money into markets they were still competitive in.
However you have not read the links, not all models were alike.
> The Nokia 7710 is a mobile phone developed by Nokia and announced on 2 November 2004.[1] It was the first Nokia device with a touchscreen
Granted, it was going to happen anyway, probably through Microsoft if Google hadn't commoditized that market first.
This line of thought really needs to die.
The Nokia board hired Elop from Microsoft because they wanted to bet the company on the Microsoft phone, full stop.
If you want to assign blame, then its on Nokia for wanting to pursue that strategy.
Also there are some errors there, Windows Phone only became an alternative after the burning platform memo, that wasn't at all well received neither internally, nor by the 3rd party devs that had just started to migrate their Symbian tooling yet again, this time to Qt + PIPS + Carbide.
The biggest blame with the board, as revealed on the Finish press, was the bonus clause on Elop contract to sell Nokia Mobile business.
There was just no way Nokia could match Apple on the OS who spent years prior to the idea of a smartphone making it a good match for the hardware of the time. And MSFT deservedly got punished for not investing in creating a better OS and Apple deservedly rewarded for doing so.
They have substantial operations in North America. T-Mobile uses primarily their hardware. Nokia still operates Bell Labs which came originally from AT&T via Lucent.
As the other global options for network hardware are Ericsson, Samsung and Huawei, Nokia is the closest to a “Made in USA” solution. Its HQ is in Finland but at least it’s a NATO country now.
So they’re more important to US infrastructure than might appear at first glance.
I was part of the Nokia => NSN transition, and saw that S change back from Siemens into Solutions, with the money they got back from selling Nokia Mobile to Microsoft.
But why is Ericsson(swedish), Samsung(south korean) not considered made in US in the sense that atleast south korea has strong relations with america iirc and also I just recently checked and it seems that sweden has also become a part of nato. So some of these can be just as good.
Although I still agree that Nokia might be important in general but I just wanted to point/question it out I suppose.
Per Wikipedia [1], Lucent's factories and offices are^W were situated in places like Murray Hill and Mount Olive, NJ, North Andover, MA, Reading, PA, and a bunch of other places in the US.
I think it makes^W made Nokia, which owns Lucent properties, "more US" than, say Ericsson and Samsung, until these facilities were closed.
[1]: https://en.wikipedia.org/wiki/Lucent_Technologies#Divisions
That's an amazing trove of IP!
Also, why is Nokia closer to the US than Ericsson?
While there's probably a little overlap in all of their product lines with Nokia (I mean Nokia makes simple ethernet switches so that carriers can buy all their gear from one vendor), most of those companies don't really compete in the same markets as Nokia
Cisco isn't selling into T-Mobile and AT&T's customer networks. Nokia isn't selling into JPMorgan's or Walmart's IP networks
Hence my comment :)
Nokia does in fact compete with Cisco and the others, but less so than in the past.
AI on IoT devices?
Nvidia just made graphics cards, at a time when games were still being written for MS-DOS. Nobody was to imagine the real money to be made from repurposing these graphics cards for crypto and now this AI 'application'.
It's a potential 6G architecture.
AI-RAN uses AI/ML for adaptive behaviors and optimizations in all these links.
For example, fine-grained RF and modulation details, called the channel state information (CSI), is constantly being exchanged between a phone and a base station. The volume of information creates transmission latencies. Using autoencoder models, this information can be semantically compressed to reduce its volume and decoded with high fidelity on the other side.
That's just one example. In the upcoming 6G, RAN will be "AI-native", using AI/ML everywhere. The standards may require AI accelerator chips in most base stations, NTN satellites, phones, and other elements.
edit: highlight: "not not". I think it's very smart.
Buying a stake in Nokia is admittedly different than taking it over and managing it, but the danger there is very clear. Distracted management that strays away from core competence can easily kill the golden goose driving revenue.
The contrarian view is that Berkshire Hathaway is able to hold an array of successful manufacturing and service businesses (Kirby vacuum cleaners, Dairy Queen, Clayton Homes, and the prominent Sees Candy) without losing management control of GEICO and their other insurance holdings.
Hopefully, Nvidia sees the example of RCA and Gulf Western, and will not lose focus on their core competence.
RCA famously birthed the semiconductor industry in Taiwan. I think that focused trade regulation would prevent a repeat of that event in modern times.
When that investment firehouse gets turned off, the AI providers will stop building new data centers. Likely for some years. That revenue stream for NVIDIA will go to zero so fast…
The unknown, as with any bubble, is timing.
the current "bubble" hasn't surpassed the dot-com boom yet.
sherinjosephroy•12h ago
mrweasel•10h ago