Nvidia CEO Jensen Huang makes a joke that customers may not find funny

Nvidia's new Blackwell GPUs are significantly more advanced than the older Hopper models, leading to rapid obsolescence and depreciation concerns for major cloud companies like Amazon, Microsoft, Google, and Meta. As these companies heavily rely on Nvidia's GPUs for AI and machine learning, the faster depreciation of older models could negatively impact their earnings. Amazon has already adjusted its server lifespan from six to five years, resulting in a substantial hit to its operating income. This move highlights the broader issue of accelerated depreciation affecting the tech industry, with analysts predicting significant profit reductions for companies like Meta and Google if they follow suit.

The rapid pace of technological advancements in AI hardware is forcing cloud giants to reconsider their asset depreciation strategies. While Amazon has taken the lead in adjusting its depreciation schedules, other companies might adopt different approaches to manage the obsolescence of their GPU systems. Analysts have been warning about this issue since the AI boom in 2023, and the financial implications are becoming more apparent as companies grapple with the challenge of maintaining profitability amidst rapidly evolving technology.

Key takeaways:

Nvidia's new Blackwell GPUs are making older Hopper models less useful, impacting cloud giants like Amazon, Meta, and Google.
Rapid technological advancements are forcing cloud companies to adjust asset depreciation, potentially reducing earnings significantly.
Amazon has already adjusted its server lifespan, which will impact its operating income by hundreds of millions of dollars in the coming years.
Meta and Google may face larger financial impacts if they follow suit, with potential billions in increased depreciation and reduced operating income.

Nvidia CEO Jensen Huang makes a joke that customers may not find funny

Key takeaways:

Comments (0)

Newsletter