[yuan43]

> I [nvidia CEO] don’t think we could have seen it [massive effect of Ethereum merge on bottom line]. I don’t think I would’ve done anything different, but what I did learn from previous examples is that when it finally happens to you, just take the hard medicine and get it behind you…We’ve had two bad quarters and two bad quarters in the context of a company, it’s frustrating for all the investors, it’s difficult on all the employees.

This is not confidence inspiring. It was obvious that the Etherum merge would affect the bottom line in a big way. Why this professed ignorance? Does it have to do with the fact that to admit that it was visible a mile away would have been to admit the deep reliance the company had come to have on the short-term Ethereum mining boom?

[sophrocyne]

Couple of comments to this point suggest that it couldn't have been predicted since the official timing of the merge was only announced in 2022, and silicon supply chain requires planning in advance of that.

But that point is ignorant of this truth - Proof-of-stake has been on the roadmap since ~2017 if not earlier.~ Edit: 2016 - Thanks friend! :)

I think the reality is that the impact of Ethereum on Nvidia's business was not fully appreciated, and that 'veil of ignorance' may well have been intentional. They never truly served the crypto market directly (e.g., there wasn't really a "miner" line of cards), and as a result didn't do the due diligence to understand how those customers played into their business performance and strategy. Or they did, and just really underestimated the Ethereum devs on ever making the merge happen. But I lean towards the first.

Either way, I think that with crypto in the rearview, I'm actually more confident in their leadership team. They seem better suited to gaming and AI.

[paulmd]

> But that point is ignorant of this truth - Proof-of-stake has been on the roadmap since 2017 if not earlier.

it's been on the roadmap since 2016. That's actually still a problem though, a perpetually-rolling-deadline is effectively worse than not having a deadline at all.

Was NVIDIA just supposed to cut production for the last 6 years in anticipation of something that was continuously pushed back 6 months every 6 months? That's not a reasonable expectation.

[doikor]

Nvidia did (does?) have a miner line of cards (CMP HX). Though they were mainly their server cards that failed QA but could still work as a miner.

https://www.nvidia.com/en-us/cmp/

These also had models that you can’t find anywhere on Nvidia website like HX170 that is basically a A100 with less memory

A lot of miners preferred consumer cards though as those can be sold to gamers once the bust comes again (and with crypto it always will every few years)

[throw101010]

> They never truly served the crypto market directly (e.g., there wasn't really a "miner" line of cards)

There were deliberate, and miserably failed, attempts to make lines of cards that could not be used for mining, while in parallel keeping their non-limited lines in production, making them the defacto miners' lines.

So yes they did know about it and tried to address it by catering to both markets, but were unable to do it correctly.

[opportune]

I think Huang does not want to draw investors’ attention to crypto because he doesn’t want people to equate Nvidia’s performance as a company with crypto performance. He doesn’t want Nvidia to just be a crypto company.

At the same time, he also definitely wants to cash in on any future crypto booms, because they are lucrative.

It is best for him to take a position that mostly ignores crypto. I think he legitimately doesn’t want crypto to be the future of Nvidia and doesn’t want to build for that use case, nor does he want to be financially reliant on it, but there is also no point in him talking shit or spreading doom about crypto when he can just shut up and still sell gpus.

[swalsh]

Nvidia doesn't have a role in any future crypto boom, unless it's being used for analytics or AI. All modern chains use PoS.

[vineyardmike]

I think we forget that Silicon manufacturing is planned a lot farther out than Silicon shopping.

They were likely trying to make TSMC purchase orders in the start of the pandemic, before a crypto boom. They also tried to handicap their GPUs wrt crypto. They likely didn’t expect the absolute shit show of a chip shortage (because who predicted or understood the pandemic early).

The rest of the market was desperate, and they probably expected it to be more robust than it ended up being. The merge would have been so far away at the time that they wouldn’t predict if it would happen at all nevermind when.

[SkyMarshal]

Many folks in crypto expected those Ethereum-mining GPU farms to just switch to some other GPU-minable cryptocurrencies. It wasn't a certainty all those farms would just close up and dump their GPUs on the market en masse. But Fed interest rate policy hitting at the same time, driving down the crypto market across the board (and all other risk assets), may have unexpectedly changed the ROI calculation there and resulted in the dump.

[Tenoke]

Many poorly educated folk maybe. All other chains were already less profitable and had a small fraction of Ethereum's hashrate. Even 5% of ETH's hashrate moving to them is plenty to make them unprofitable for most. This was never a likely outcome.

[paulmd]

> Many folks in crypto expected those Ethereum-mining GPU farms to just switch to some other GPU-minable cryptocurrencies.

This was a pretty common take but if you did the math Ethereum had about 90% of the GPU-mining market (by hashrate) so it was obvious the profitability was going to tank on those other currencies as soon as Ethereum switched.

In the long run yes, there will probably be another big spike in another cryptocurrency that starts another GPU boom. But it's not magic where one instantly springs up to absorb all the ethereum hardware at equivalent profitability.

A GPU crash was inevitable regardless of the interest rate drop hitting at the same time.

[swalsh]

I hoped there would be a rise in proof of work like chains, where in the work was something useful like training an AI or brute forcing a hard but useful problem. Like a SETI@Home, but paying crypto for successful solutions as opposed to relying on altruism.

[AceJohnny2]

As the article says, the timing on the Ethereum dropping proof-of-work was shorter than Nvidia's production pipeline.

[colechristensen]

I think it's more like there are so many games at play as CEO in that position that anything but vague denial would be far more trouble than it's worth. Anything you say is going to attract a lot of criticism so the only thing you can say is the least damaging one.

In other words, most public statements are mostly nonsense engineered for response and have only a casual association with the truth.

[modeless]

They have consistently underestimated the effects of crypto, it's been screwing up their demand forecasts for a long time. I think what happened was they had all these efforts to prevent miners from buying cards so gamers could buy them instead, and they thought they were successful. So they attributed strong demand to gaming, but they were actually failing and miners were still buying all the cards. I don't know why they thought they were successful...

[ashafer]

I'm guessing it is less about proof of stake and more about the fact that all of crypto is in the gutter and it's not as economical to mine anymore. I would guess that is the big core issue that is enhanced by things like proof of stake. Kind of a perfect storm when paired with inventory issues and crazy inflation. I think that storm is what he is saying they couldn't have predicted.

[KaoruAoiShiho]

It was sudden and couldn't have been predicted. Ethereum ended PoW just this month but the GPU crash was 7 months ago. In reality the PoW transition had nothing to do with the GPU crash, it was the end of WFH and the crypto decline caused by the russian invasion that resulted in the GPU crash.

[mccorrinall]

> crypto decline caused by the russian invasion

What? One of the biggest recent decline in crypto happened when LUNA foundation dumped multiple billions as BTC in order to keep terra stable (didn’t work out). The other dump is caused because borrowing money for leverage won’t be as cheap as it was for at least the next 4 years (taking bloomberg projections of Fed rates here).

How is the invasion related to the dump at all?