Jensen Huang – TPU competition, why we should sell chips to China, & Nvidia’s supply chain moat
Episode publishedPodcast: Dwarkesh PodcastDwarkesh Podcast
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We've seen the evaluations of a bunch of software companies crash because people are expecting AI to commoditize software. And there's a potentially naive way of thinking about things, which is like, NVIDIA sends a GDS two file to TSMC. TSMC builds the logic dies. It builds the switches. Then it packages them with the HBM that SK Hynix and Micron and Samsung make. Then it sends it to an ODM in Taiwan where they assemble the racks. And so NVIDIA is fundamentally making software that other people are manufacturing. If software gets commoditized, does NVIDIA get commoditized?
Well, in the end, something has to transform electrons to tokens. That transformation, there's no The transformation of electrons to tokens and making those tokens more valuable over time, I think that that's hard to completely commoditize. The transformation from electrons to tokens is such an incredible journey. Making that token, it's like making one molecule more valuable than another molecule, making one token more valuable than another. The amount of artistry, engineering, science, invention that goes into making that token valuable, obviously we're watching it happening in real time. An
I think in your latest filings, you had almost $100,000,000,000 in purchase commitments with people, foundries, memory, packaging, and then, semi analysis has reported that you will have $250,000,000,000 of these kinds of purchase commitments. And so one interpretation is NVIDIA's mode is really that you've locked up many years of these scarce components that are, every, you know, somebody else might have an accelerator, but can they actually get the memory to build it? Can they actually get the logic to build it? And this is really NVIDIA's big mode for the next few years.
Well, it's one of the things that we can do that is hard for someone else to do. The reason why we could we've made enormous commitments upstream. Some of it is explicit, these commitments that you mentioned. Some of it is implicit. For example, a lot of the investments that are upstream are made by our supply chain because I said to the CEOs, Let me tell you how big this industry is going to be and let me explain to you why. And let me reason through it with you Let me show you what I see. As a result of that process of informing, inspiring, aligning with CEOs of all different industries upst
I do want to understand more concretely whether the upstream can keep up. For many years now, you guys have been 2X ing revenue year over year. You guys have been more than tripling the amount of flops you're providing to the world year over year.
And 2X ing at the scale now it's really incredible.
Exactly. Yeah. So then you look at logic say, you're the biggest customer on TSMC's N3 node, and you're one of the biggest on N2, AI as a whole this year is going to be 60% of N3. It's going be 86 next year according to some analysis. How do you 2X if you're the majority and how do you do that year over year? So are we in a regime now where the growth rate in AI compute has to slow because of upstream? Do you see a way to get around these? How do we build 2X more fabs year over year ultimately?
Yeah. At some level instantaneous demand is greater than the supply upstream and downstream in the world. It could be at any instant any instance, we could be limited by the number of plumbers,
which actually happens. The plumbers are invited to next year's GTC.
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