| ▲ | iancmceachern 11 hours ago |
| They're no longer energy competitive. I.e. the amount of power per compute exceeds what is available now. It's like if your taxi company bought taxis that were more fuel efficient every year. |
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| ▲ | bob1029 11 hours ago | parent | next [-] |
| Margins are typically not so razor thin that you cannot operate with technology from one generation ago. 15 vs 17 mpg is going to add up over time, but for a taxi company it's probably not a lethal situation to be in. |
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| ▲ | SchemaLoad 6 hours ago | parent | next [-] | | At least with crypto mining this was the case. Hardware from 6 months ago is useless ewaste because the new generation is more power efficient. All depends on how expensive the hardware is vs the cost of power. | |
| ▲ | 10 hours ago | parent | prev | next [-] | | [deleted] | |
| ▲ | iancmceachern 8 hours ago | parent | prev [-] | | Tell that to the airline industry | | |
| ▲ | hibikir 6 hours ago | parent | next [-] | | And yet they aren't running planes and engines all from 2023 or beyond: See the MD-11 that crashed in Louisville: Nobody has made a new MD-11 in over 20 years. Planes move to less competitive routes, change carriers, and eventually might even stop carrying people and switch to cargo, but the plane itself doesn't get to have zero value when the new one comes out. An airline will want to replace their planes, but a new plane isn't fully amortized in a year or three: It still has value for quite a while | |
| ▲ | bob1029 8 hours ago | parent | prev [-] | | I don't think the airline industry is a great example from an IT perspective, but I agree with regard to the aircraft. |
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| ▲ | mikkupikku 11 hours ago | parent | prev | next [-] |
| If a taxi company did that every year, they'd be losing a lot of money. Of course new cars and cards are cheaper to operate than old ones, but is that difference enough to offset buying a new one every one to three years? |
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| ▲ | gruez 11 hours ago | parent | next [-] | | >If a taxi company did that every year, they'd be losing a lot of money. Of course new cars and cards are cheaper to operate than old ones, but is that difference enough to offset buying a new one every one to three years? That's where the analogy breaks. There are massive efficiency gains from new process nodes, which new GPUs use. Efficiency improvements for cars are glacial, aside from "breakthroughs" like hybrid/EV cars. | |
| ▲ | dylan604 11 hours ago | parent | prev | next [-] | | >offset buying a new one every one to three years? Isn't that precisely how leasing works? Also, don't companies prefer not to own hardware for tax purposes? I've worked for several places where they leased compute equipment with upgrades coming at the end of each lease. | | |
| ▲ | mikkupikku 9 hours ago | parent | next [-] | | Who wants to buy GPUs that were redlined for three years in a data center? Maybe there's a market for those, but most people already seem wary of lightly used GPUs from other consumers, let alone GPUs that were burning in a crypto farm or AI data center for years. | | |
| ▲ | dylan604 7 hours ago | parent | next [-] | | > Who wants to buy who cares? that's the beauty of the lease. once it's over, the old and busted gets replaced with new and shiny. what the leasing company does is up to them. it becomes one of those YP not an MP situations with deprecated equipment. | | |
| ▲ | bluGill 5 hours ago | parent [-] | | The leasing company cares - the lease terms depend on the answer. That is why I can lease a car for 3 years for the same payment as a 6 year loan (more or less) - the lease company expects someone will want it. If there is no market for it after they will still lease it but the cost goes up |
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| ▲ | coryrc 9 hours ago | parent | prev | next [-] | | Depends on the price, of course. I'm wary of paying 50% of new for something run hard 3 years. Seems an NVIDIA H100 is going for $20k+ on EBay. I'm not taking that risk. | |
| ▲ | pixl97 8 hours ago | parent | prev [-] | | Depending on the discount, a lot of people. |
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| ▲ | gowld 10 hours ago | parent | prev [-] | | That works either because someone wants to buy old hardware for the manufacturer/lessor, or because the hardware is EOL in 3 years but it's easier to let the lessor deal with recyling / valuable parts recovery. |
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| ▲ | wordpad 11 hours ago | parent | prev | next [-] | | If your competitor refreshes their cards and you dont, they will win on margin. You kind of have to. | | |
| ▲ | lazide 11 hours ago | parent [-] | | Not necessarily if you count capital costs vs operating costs/margins. Replacing cars every 3 years vs a couple % in efficiency is not an obvious trade off. Especially if you can do it in 5 years instead of 3. | | |
| ▲ | iancmceachern 5 hours ago | parent | next [-] | | You highlight the exact dilemma. Company A has taxis that are 5 percent less efficient and for the reasons you stated doesn't want to upgrade. Company B just bought new taxis, and they are undercutting company A by 5 percent while paying their drivers the same. Company A is no longer competitive. | | |
| ▲ | Dylan16807 4 hours ago | parent [-] | | The debt company B took on to buy those new taxis means they're no longer competitive either if they undercut by 5%. The scenario doesn't add up. | | |
| ▲ | iancmceachern 3 hours ago | parent [-] | | But Company A also took on debt for theirs, so that's a wash. You assume only one of them has debt to service? | | |
| ▲ | Dylan16807 3 hours ago | parent [-] | | Both companies bought a set of taxis in the past. Presumably at the same time if we want this comparison to be easy to understand. If company A still has debt from that, company B has that much debt plus more debt from buying a new set of taxis. Refreshing your equipment more often means that you're spending more per year on equipment. If you do it too often, then even if the new equipment is better you lose money overall. If company B wants to undercut company A, their advantage from better equipment has to overcome the cost of switching. | | |
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| ▲ | zozbot234 11 hours ago | parent | prev [-] | | You can sell the old, less efficient GPUs to folks who will be running them with markedly lower duty cycles (so, less emphasis on direct operational costs), e.g. for on-prem inference or even just typical workstation/consumer use. It ends up being a win-win trade. | | |
| ▲ | lazide 9 hours ago | parent [-] | | Then you’re dealing with a lot of labor to do the switches (and arrange sales of used equipment), plus capital float costs while you do it. It can make sense at a certain scale, but it’s a non trivial amount of cost and effort for potentially marginal returns. | | |
| ▲ | pixl97 7 hours ago | parent [-] | | Building a new data center and getting power takes years to double your capacity. Swapping out out a rack that is twice as fast takes very little time in comparison. | | |
| ▲ | lazide 7 hours ago | parent [-] | | Huh? What does your statements have to do with what I’m saying? I’m just pointing out changing it out at 5 years is likely cheaper than at 3 years. | | |
| ▲ | pixl97 6 hours ago | parent [-] | | Depends at the rate of growth of the hardware. If your data center is full and fully booked, and hardware is doubling in speed every year it's cheaper to switch it out every couple of years. |
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| ▲ | philwelch 10 hours ago | parent | prev [-] | | If there was a new taxi every other year that could handle twice as many fares, they might. That’s not how taxis work but that is how chips work. |
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| ▲ | echelon 11 hours ago | parent | prev [-] |
| Nvidia has plenty of time and money to adjust. They're already buying out upstart competitors to their throne. It's not like the CUDA advantage is going anywhere overnight, either. Also, if Nvidia invests in its users and in the infrastructure layouts, it gets to see upside no matter what happens. |
