Not buying that this is enough to kill off AI but … an interesting question
Huang says Moore’s Law is dead because Nvidia’s price-performance is increasing well ahead of what Moore’s Law could predict.
To accomplish this, however, Nvidia is rewriting rules around chip design. A single Blackwell chip will draw 1,875 watts of power. That’s nearly twice what the current Hopper chips consume.
That means 1 million Blackwell chips, which Nvidia plans to produce, will be drawing twice the power of a nuclear power plant.
The capability of Nvidia hardware is also off the charts. A single server rack equipped with Blackwell chips will deliver 1.44 ExaFlops of performance. An ExaFlop is a quintillion, 1 followed by 18 zeros.
That means a single server rack can do the work of an entire data center. In practical terms, it means the clouds are obsolete. Anyone can have one. When Elon Musk diverted a $500 million Nvidia order from Tesla (NASDAQ:TSLA) to his X service, he was grabbing a cloud data center.
The Bottom Line
That giant sucking sound you hear is the world’s wealth, and the world’s energy, flowing into Nvidia data centers.
It’s too much.
The last decade’s cloud systems were built with energy consumption in mind. Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) made it a practice to recycle the energy it used for things like water treatment. Microsoft and Amazon planned renewable energy projects around their cloud energy needs.
Nvidia is blowing all this up.
Nvidia is also well ahead of what software can do. Funding for generative AI startups is starting to dry up. Even the Cloud Czars are unclear how they’ll get their money out from AI.
The current mania, like all such mania, will end. I wish I could tell you when that will happen. I can’t. It probably won’t be this quarter or even the next.
But you might want to lighten up on your Nvidia holdings before it happens. The company and the AI industry are on an unsustainable path.