Yes but they're using this fund to prop up their core business (and share price) by artificially creating demand for their own products. Most of the money that they invest comes back to them when these companies buy GPUs.
Yes but they're using this fund to prop up their core business (and share price) by artificially creating demand for their own products. Most of the money that they invest comes back to them when these companies buy GPUs.
I wouldn't say they are artificially creating the demand. They artificatially create capacity to make a purchase by enabling their customers to pay with ownership of their business rather than with money. It's just an alternative financing scheme.
> They artificatially create capacity to make a purchase
If the company did not intend to purchase anything but Nvidia used the investment to "incentivize" a purchase then this is artificially creating demand where there used to be none. It's very different from Nvidia allowing a company to purchase Nvidia products that they already wanted to purchase but pay with stock.
Are you implying that 1B investment gives Nvidia control over Nokia procurement?
Then they are acting as a lender which can be problematic.
I think this will continue. They can't change 3GPP's vision with just Nokia. They need to bribe other companies. Ericsson is the other big vendor. I think there is a possibility of that. However, Huawei is impossible. Who is gonna provide a GPU to them? Therefore, they simply can't just put a GPU on every base station around the world.
>Therefore, they simply can't just put a GPU on every base station around the world.
I dont think that is what's happening here. Base station has been power limited for quite some time and part of the whole 5G / Cloud RAN promise was moving a lot of the processing off base station. Ignoring GPU there are a lot of the current stack fits Nvidia portfolio especially DPU. May be Nvidia have figure out a way to use CUDA and have it perform better than Ericsson and Huawei.
Nokia is also the smallest of the three and has been in decline for quite some time. Part of me also wish Nvidia just buy Nokia and start competing against Ericsson and Huawei.
You are right on your points. I agree on DPU but it's on the network stack. I think Nvidia wants to get into the PHY and MAC layer (CuPHY, etc.). That's where I find it unlikely due to the cost of latency. If Nvidia had wanted to buy Nokia, they could've already completed the deal. It's a possibility in the future but this $1B investment kind of showed that they are more interested in creating artificial demand for their GPUs rather than diversifying their product portfolio. I agree with you that Nvidia should just buy Nokia.
Strategic Enablement
Yup, give them $1B so they can build out AI DC’s stocked with $1B of Nvidia chips.
More importantly than gaining a client for Nvidia's AI chips, this investment gives the company a solid foothold in a competitor to Broadcom in the wireless, datacenter and networking solutions space. I wouldn't be surprised if Nvidia eventually scoops up all of Nokia.
> I wouldn't be surprised if Nvidia eventually scoops up all of Nokia.
That is what I wish would happen as well.
Except Nokia use Broadcom chips in pretty much all their datacentre and cheapo networking products.
buy in, let them use your money to buy your product back from you, then if you think they'll actually succeed you make money and if not you can slowly dump that stock back onto the market and end up ahead. you've basically manufactured a customer at that point.
Exactly, the risk is extremely small. If they fail, there will be others too, which means that WSBro’s can bundle and derivatives their way into at least a neural exit.