David Rosenthal: belief

Transcript context

…You could imagine there are more Nvidia data centers likely on the way that are fully owned and operated. Speaking of all of this, we got to talk to some numbers on margin. This last quarter they had a gross margin of 70%, and they forecasted for next quarter to have a gross margin of 72%. If you go back pre-CUDA when they were a commoditized graphics card manufacturer, it was 24%. They’ve gone 24% to 70% on gross margin. With the exception of a few quarters along the way for these strange one-time events, that’s basically been a linear climb quarter over quarter as they’ve deepened their moat and as they’ve deepened their differentiation in the industry. We’re definitely at a place right now that I think is temporary due to the supply shortage of the world’s enterprises, and in some cases even governments. You look at the UK or some of the Middle Eastern countries, like blank check. I just need access to Nvidia hardware. That’s going to go away, but I don’t think this very high 65%-plus margin is going to erode too much. I think two things here. One, I really do believe what we were talking about a minute ago that Nvidia is not just a hardware company, they’re not just a chips company. They are a platform company, and there is a lot of differentiation baked into what they do. If you want to train GPT or a GPT class model… There’s one option.…

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