Comment by duped 9 hours ago
How different is this from rental car companies changing over their fleets? I don't know, this is a genuine question. The cars cost 3-4x as much and last about 2x as far as I know, and the secondary market is still alive.
The traditional framing would be cost per flop. At some point your total costs per flop over the next 5 years will be lower if you throw out the old hardware and replace it with newer more efficient models. With traditional servers that's typically after 3-5 years, with GPUs 2-3 years sounds about right
The major reason companies keep their old GPUs around much longer with now are the supply constraints
The used market is going to be absolutely flooded with millions of old cards. I imagine shipping being the most expensive cost for them. The supply side will be insane.
Think 100 cards but only 1 buyer as a ratio. Profit for ebay sellers will be on "handling", or inflated shipping costs.
eg shipping and handling.
Cards don't "expire". There are alternate strategies to selling cards, but if they don't sell the cards, then there is no transfer of ownership, and therefore NVIDIA is entering some form of leasing model.
If NVIDIA is leasing, then you can't get use those cards as collateral. You can't also write off depreciation. Part of what we're discussing is that terms of credit are being extended too generously, with depreciation in the mix.
The could require some form of contractual arrangement, perhaps volume discounts for cards, if they agree to destroy them at a fixed time. That's very weird though, and I've never heard of such a thing for datacenter gear.
They may protect themselves on the driver side, but someone could still write OSS.
I think it's a bit different because a rental car generates direct revenue that covers its cost. These GPU data centers are being used to train models (which themselves quickly become obsolete) and provide inference at a loss. Nothing in the current chain is profitable except selling the GPUs.
> and provide inference at a loss
You say this like it's some sort of established fact. My understanding is the exact opposite and that inference is plenty profitable - the reason the companies are perpetually in the red is that they're always heavily investing in the next, larger generation.
I'm not Anthropic's CFO so i can't really prove who's right one way or the other, but I will note that your version relies on everyone involved being really, really stupid.
> the secondary market is still alive.
this is the crux. Will these data center cards, if a newer model came out with better efficiency, have a secondary market to sell to?
It could be that second hand ai hardware going into consumers' hands is how they offload it without huge losses.
And the big ones don't even have typical PCIe sockets, they are useless outside of behemoth rackmount servers requiring massive power and cooling capacity that even well-equipped homelabs would have trouble providing!
Data centre cards a don’t have fans and don’t have video out these days.
Why would you do that when you can pay someone else to run the model for you on newer more efficient and more profitable hardware? What makes it profitable for you and not for them?
Ah well yes to a degree that’s possible but at least at the moment you’d still be better off buying a $5k Mac Studio if it’s just inference you’re doing
> How different is this from rental car companies changing over their fleets?
New generations of GPUs leapfrog in efficiency (performance per watt) and vehicles don't? Cars don't get exponentially better every 2–3 years, meaning the second-hand market is alive and well. Some of us are quite happy driving older cars (two parked outside our home right now, both well over 100,000km driven).
If you have a datacentre with older hardware, and your competitor has the latest hardware, you face the same physical space constraints, same cooling and power bills as they do? Except they are "doing more" than you are...
Would we could call it "revenue per watt"?