Nvidia CEO Jensen Huang Says ‘Moore’s Law Is Dead’ In Justifying Game Card Price Hikes
Nvidia Corp CEO Jensen Huang said Wednesday that he thinks it will be a “very nice quarter for Ada,” the company’s next-generation chip architecture was revealed this week, even as critics refused to raise prices as consumer demand waned.
She anticipates high demand for gaming chips using the next generation “Ada Lovelace” chip architecture, named after the 19th century English mathematician who is generally considered the world’s first computer programmer for her work on Charles Babbage’s Theoretical Analytical Engine.
A few sales will arrive in the current quarter as Nvidia’s flagship RTX 4090 goes on sale for $1,599 on October 12, with other cards like the $899 mid-tier 4080 to follow, and the “vast majority” of launch occurs at the end of January, he said. Huang’s fourth quarter fiscal.
Online complaints about unexpected price hikes have been circulating. For the respective chipset, the 4090 is priced 7% higher than the 2020 launch price of the 3090 it is supposed to replace. (For the 3090, the upgraded version of the original was going for $1,100 at Best Buy in an advertised price drop of $900.) Even more surprisingly, the 4080’s price is 29% higher than the 2020 launch price of the 3080.
Lovelace succeeds Ampere, which was revealed in May 2020, about two months into the COVID-19 pandemic, amid strong demand for gaming cards. Ampere-based game cards were introduced in September 2020.
Huang has certainly paid for that optimism in the form of two quarters of “really tough drugs” after the chip maker lowered its forecast not once or twice, but three times and said $400 million in sales is now up in the air due to the US ban on the sale of data center products to China, and charges $1.22 billion to liquidate Ampere-based stock before launching Lovelace.
Read: China Syndrome for Nvidia: Is the Stock Melting?
“We are selling very specifically in the market for much less than what we sell outside the market, which is a lot less than what we sell outside the market,” Huang said. “And my hope is that by the fourth quarter timeframe, sometime in the fourth quarter, the channel will go normal, and set the stage for a great launch for Ada.”
To critics, Huang said he feels the higher price tag is justified, especially since Lovelace’s cutting-edge engineering is needed to support Nvidia’s expansion into the so-called metaverse.
“12 inches [silicon] The chip is much more expensive today than it was yesterday, Huang said, and it’s not a little expensive, it’s a ton more expensive.”
“Moore’s Law is dead,” Huang said, referring to the standard that the number of transistors on a chip doubles every two years. Moore’s Law’s ability to deliver twice the performance at the same cost, or at the same performance, half the cost, has expired every year and a half. It’s all gone, so the idea that the chip will cost less over time, unfortunately, is a story from the past.”
“Computing is not a chipset problem, it’s a software and chips problem,” Huang said.
“ “Moore’s Law is dead… completely finished.”“
Nvidia continues to develop software
For this reason, Nvidia has developed over the years a well-established ecosystem for its chips, which has led some analysts to start looking at Nvidia as a rapidly emerging software company.
This time around, Huang has unveiled a major expansion of the company’s so-called metaverse platform with Nvidia Omniverse Cloud, the company’s first SaaS and Infrastructure-as-a-Service product, to design, deploy, operate and experience metaverse applications.
Another push to SaaS is Nvidia’s NeMo and BioNeMo AI cloud services with big language. LLMs are machine learning algorithms that use massive text data sets to recognize, predict, and generate human language. While NeMo is the generic model service, BioNemo specializes in applying LLMs to biological and chemical research.
Since Nvidia primarily offers the RTX 3080 gaming chip as a service with its GeForce NOW Priority service dropping in November, charging subscribers $99.99 for six months of RTX 3080 gaming chip performance, MarketWatch asked Huang if he expected that. Use of purchased physical GPUs to be exchanged for cloud-based subscription services.
Read: Nvidia’s Sales Expectations Fall Nearly $1 Billion Less Than Expectations, Stocks Fall
“I don’t think so,” Huang said. “There are clients who want to own, and there are clients who want to rent.”
“Some people prefer to outsource the plant,” Huang said. “And remember, AI is going to be a factory, and it’s going to be the most important factory in the future.”
“One factory puts in raw materials, and something comes out,” Huang said. “In the future, it will enter data for the factories, and what comes out will be intelligence, models.”
As far as factories go, Nvidia should have options to serve all customers at scale. “Startups prefer to have things in Opex,” Huang said. “Large, well-established companies prefer to have things in their capex.”
Over the years, Nvidia has shown itself to be irresistible to transformation, going from this gaming chip company to becoming the largest US chip maker by market value after data center designers found that Nvidia’s graphics processing units, or GPUs, ), did not. Just make video games nicer, their parallel processors have been very useful in machine learning.
Several other technical hardware companies, such as Cisco Systems Inc. CSCO,
and International Business Machines Corp. IBM,
Over the years and with varying degrees of resistance and enthusiasm, it has virtually transformed by necessity into software and service companies, with more companies migrating their data to the cloud rather than keeping it locally in a private server.
Read: The end of single-chip wonders: Why Nvidia, Intel, and AMD ratings have seen massive upheaval
Of the 43 analysts covering Nvidia, 31 have buy ratings, 11 have hold ratings, and one has a sell rating. Of those, 13 have lowered their targets, resulting in an average price target of $202, down from the previous $202.51.
Shares on Wednesday closed 0.7% higher at $132.61, versus a 1.7% drop for the S&P 500 SPX,
Over the year, Nvidia shares are down 55%, compared to a 36% drop by the PHLX Semiconductor Index SOX,
20% drop by the S&P 500 SPX,
and a 28% drop for the high-tech Nasdaq Composite,
As for Ampere running, Nvidia’s stock price is down 4.7% since September 1, 2020, when Nvidia unveiled its RTX 3000 Ampere-based gaming chipset, versus a 9.3% gain for the S&P 500 over that period.