D2D: It's Nvidia's data center now
Arm and RISC V sitting in a tree, why isn't Qualcomm in the ASIC services business, AWS' silicon and much more.
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Highlights from our Blog
In the latest quarter, Nvidia consumed 73% of ‘data center’ processor revenue. Even if we strip out the post-ChatGPT super-surge, Nvidia’s data center has been growing at double the pace of Intel and AMD for years. The rise of AI Transformer models marks one of those periodic shifts in compute from one paradigm to another. The last one brought about Cloud computing running Intel silicon. This time we are not quite sure what the new model will be, but it will run on Nvidia silicon.
Most people assume that technology battles result in winner-takes-all outcomes, but that is not always true. The fight between Arm and RISC V is likely to be a case in point. For the foreseeable future, we expect to see a lot of RISC V cores sitting next to Arm cores in SoCs.
Mediatek is an old hand in the ASIC services business, supporting non-chip companies in bringing their chip designs to production. Yet their arch competitor Qualcomm has almost nothing to say on the topic. As peers like AMD and Marvell are boosting their capabilities in this field, Qualcomm’s absence is notable. This is, in part, a reflection of the company’s lack of a sales culture, and even more a result of the importance of Intellectual Property (IP) to the company’s business. Having negotiated these contracts, we can imagine the infinite loop of Qualcomm lawyers negotiating with some hyperscaler’s lawyers.
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Noteworthy Items
Semis and Hardware
Amazon held its Re:Invent developer event last week, which included three updates to their chip line-up. Andy Jassy, CEO and former head of AWS, tweeted about the company’s journey towards internal chips. He makes the case that having internal chips is a cost-savings measure, which we tend to think is the wrong approach. Internal chips should convey strategic advantage, because the break-even math does not really work out the other way. Another way to view this is Amazon’s new chips, especially their AI offerings, are really not that exciting, which begs the question is Amazon investing enough to merit the effort? And in all of the coverage of these new chips, no two articles highlight the same key points about the updated chips. Amazon messaging needs an overhaul.
The New Yorker profiled Nvidia CEO Jensen Huang. We were into semis, before semis were cool.
CNBC’s Katie Tarasov is on a roll with her series on major chip companies. Her latest is a profile of Apple Silicon.
There is more to batteries than Lithium Ion. Advances like sodium ion and solid state batteries are starting to look attractive, or at least possible, for a whole range of uses beyond cars.
General Motors announced a $10 billion share buyback. America is about to cede the electric vehicle (EV) market to China. Strong parallels between GM’s announcement and Intel’s similar move a decade ago to repurchase shares and not invest in EUV systems. Same outcome in the works.
Qualcomm launched a new AI accelerator. We have so many questions, chief of which is Qualcomm in the data center business still? We have no idea on the performance of the product, on paper it looks vaguely competitive for cloud inference. But they made no mention of it at their recent analyst summit. Feels somewhat orphaned. And it does not help that the press release customer quote comes from a company that the New York Times profiled last week for its close ties to the PRC government.
Renesas unveiled its RISC V CPU. We think big RISC V processors are going to struggle in the market, but this is something different. Renesas is really an MCU company, and so this product should be viewed as the top of the line for their portfolio. Seen in that light, this could be an interesting product.
Networking and Wireless
Everything you wanted to know about optical networking. Well not quite everything, as this video does not answer the question why is anyone in this business.
Ikea launched a line of home sensors. All priced below $10. This is IoT.
Activist investors Elliott Management launched a campaign against tower operator Crown Castle, and we do not know which side to pick. We are not usually fans of activists, but Crown Castle has a near-monopoly and acts like it. The fight centers on Crown Castle’s fiber assets which Elliott claims are grossly underperforming, but we think Crown Castle could do with a shake up to make it a little more customer friendly.
As mobile operators sunset their 3G networks to repurpose spectrum for more profitable 5G, they are running up against the problem of voice calls. Voice for both 5G and 4G often relies on fallback to 3G, owing to deficiencies in the VoLTE standard that was supposed to bridge this gap. Fallback to 3G was intended as a short-term hack until VoLTE was better. This is probably the largest balance of technical debt on the planet. On the other hand, people still make phone calls?
Software and the Cloud
Ian Cutress answers all your questions about big LLM AI models. The king of semis YouTube.
Broadcom closed its acquisition of VMware and the job cuts began immediately. Some people were surprised at the speed and depth of the cuts, they are forgetting that Broadcom is a private equity fund, not a tech company. Our only question is who is next?
Google Cloud (GCP) unveiled their Kubernetes-on-TPU service. Google is in an odd position with regards to AI. On the one hand, they have more raw AI compute power than anyone else, but so far it is mostly used internally. GCP would desperately like to get outside customers to make use of that power. In their post, they argue as to the cost effectiveness of the offering, and it is a fairly compelling picture, but it will take a lot more customer education to move the needle versus Azure, AWS and Oracle.
AI Godfather Yann LeCun posted a thread in the aftermath of the OpenAI drama which lays out a very reasonable description of the status of AI. No, AI is not going to wipe us out any time soon. There are real areas for improvement, and a lot of work still be done here.
Diversions
Wealth systems in multi-player games. Finance and video games? Sign us up.
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