Nearly half of Nvidia's revenue comes from four mystery whales each buying $3B+
Nvidia's Q2 revenue reached $30 billion, with 46% from four major customers, raising concerns about growth sustainability. High profit margins and industry cycles pose risks to future financial stability.
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Nvidia's second-quarter revenue surged to $30 billion, with nearly half of this amount—approximately $13.8 billion—coming from just four major customers. These customers, whose identities remain undisclosed for competitive reasons, accounted for 46% of Nvidia's sales, each contributing over 10% to the total revenue. This dependency on a small number of clients raises concerns about the sustainability of Nvidia's rapid growth, especially given the semiconductor industry's historical boom-and-bust cycles. Despite CEO Jensen Huang's claims of diversification, the company's filings indicate a significant concentration of revenue from these key customers, which include potential giants like Amazon, Meta, Microsoft, Alphabet, OpenAI, or Tesla. Nvidia's profit margins are notably high, with net income nearly quadrupling to $31.5 billion in the first half of the year. However, the reliance on a few customers poses risks, as fluctuations in their purchasing could significantly impact Nvidia's financial performance. The company has acknowledged this concentration in its regulatory filings, highlighting the potential risks associated with such a business model.
- Nearly half of Nvidia's Q2 revenue came from four major customers.
- These customers contributed approximately $13.8 billion, or 46% of total sales.
- Concerns exist regarding the sustainability of Nvidia's rapid growth due to reliance on a few clients.
- Nvidia's profit margins are high, with net income reaching $31.5 billion in the first half of the year.
- The semiconductor industry is known for its cyclical nature, raising questions about future revenue stability.
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- Many commenters speculate on the identities of Nvidia's major customers, suggesting companies like Microsoft, Meta, Google, and Amazon.
- There are concerns about the sustainability of Nvidia's growth, particularly with the potential for an AI bubble burst.
- Commenters express worries about the increasing competition from custom silicon and the ability of major cloud vendors to develop their own hardware.
- Some believe that the lack of new consumer GPU products indicates a strategic shift by Nvidia, potentially ceding market share to competitors like AMD.
- Overall, there is a mix of skepticism and cautious optimism regarding Nvidia's future in a rapidly evolving tech landscape.
27 commentsOther big buyers area: Oracle, CoreWeave, Lambda, Tencent, Baidu, Alibaba, ByteDance, Tesla, xAI.
https://observer.com/2024/06/nvidia-largest-ai-chip-customer...
https://blogs.nvidia.com/blog/meta-llama3-inference-accelera...
1. Are chatbots going to get much more effective than they already are? It seems like all the major players are plateauing and the different models are becoming commoditized. That doesn't bode well for sustainable GPU sales. Also if the hallucination problem can't be solved, it's not clear that this generation of AI will ever be deployable at scale.
2. Are there genuine at scale use cases for AI outside of LLM's? Autonomous navigation seems like a major one, but I'm not sure how close that is to production ready. I know drug discovery and other applications are talked about, but not sure how much GPU consumption they can realistically generate. As we leave the novelty phase of the adoption curve, it's clear that a lot of the use of the image generators was unsustainable experimentation. My personal experience has been, a year ago my friends were creating tons of images but now we hardly do at all.
https://youtu.be/NC5NZPrxbHk?si=8uQ4zdMU02f4X1Hc (at 1:41)
Hyperscalers & Meta.
(Corp speak 101: Hyperscalers = AWS, GCP, Azure)
Or if closed models will dominate. For example, by the largest companies leveraging their existing distribution channels and/or acquiring promising startups.
Competition when ? Are amd, Intel or other companies in the situation to be able to eat some of nvidia insane margin ?
There is also an alarming (as shareholder) rise in custom silicon. Groq sambanova cerebus etc.
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Right now it’s “buy GPUs at any cost”. If things slow, there will be a chance for these customers to consider how to optimize this cost. NVIDIA can’t sit on its laurels like Intel did with x86.
I hope they're not saving their best chips for the likes of Tesla/Grok. That'd be a PR nightmare if and when it leaks.
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