And what about the extra energy consumption of the RTX 5070 TI vs. a iGPU? If you go GPU cloud then you can save on energy as well in your PC. Less energy means also less noise by the way.
To get an idea, if you go gaming via cloud then fast internet + office PC or Laptop is enough. So you save way more than the GPU only in a proper comparison.
This is why I play consoles only. I can play games for years without ever changing HW and save tons of money compared to my PC gaming times.
There is one answer to this question which is called options. Selling short term OTM CCs with half of premium being used to buy ITM Calls (1/3 protection of the CC), OTM Calls (protection against gap up) and longterm OTM Puts (earn money when Nvidia nose dives).
All Tech companies including OpenAI have initiatives for their own chips. Nobody talks about Intel.
Tech companies have the following options:
1. Buy Nvdia high performance stack with stable and fast support and deploy your SW developers to quickly get started
2. Buy AMD whatever stack and deploy your SW developers to make a lot of ground work
3. Develop and deploy your own chips and use your SW developers to make your SW from scratch but exactly as you need it
The only reason they might go with No. 2 is if AMD gives them the HW more or less for free but maybe even then will mix 2 + 3 if they don't want 1. And AMD deal is showing exactly this, AMD has to give free quity to get a customer for their HW.
What people don't get, who in their right mind would switch from one vendor lock-in to another with the difference on investing SW development into the 2nd???? The resources spend on AMD will bind customers to AMD. It doesn't matter if RoCm is open source as long as it runs only on AMD. If RoCm would run on any AI chip (including Nvidia) then we would have a case of an interesting switch but then the question comes up, why buy AMD if RoCm doesn't require it?
On huge GPU clusters running inferencing the utilization of GPUs is key.
Imagine you have 1 million GPUs and you have 99% utilization of theoretical performance in the system with inferencing. That would mean 10k of GPUs are basically idle and draw power. You could now try to identify which ones are idle but you won't find them because utilization is a dynamic process so while all GPUs are under load not all are running 100% performance beause of interconnects and networking not providing data fast enough so your whole network becomes a bottleneck.
So what you need is a very smart routing process of computation requirements on the whole cluster. This is pure SW issue and not HW issue. This is the SW Nvidia has been working on for years and where AMD is years behing.
This is also why Jensen is absolutely right to say that competitors can offer their chips for free because Nvidia's key in TCO performance is the idea of one giant GPU so SW and networking allowing for highest utilization of a data center. You can't build a GPU the size of 1 million GPUs so you have to think of the utilization problem of a network of GPUs.
In the real world utilization rates are way below 100% so every % better of utilization is way more worth than the price of single GPUs. The idea here is that the company providing 2-3x higher utilization can easily ask for like 5x higher pricing per chip and will still deliver a better TCO.
AMD was desperate enough to sell 10% of their company to get 1 customer.
The issue here is now, that every large customer of AMD will now probably ask for equity. AMD has put itself into a pit hole with that deal.
If I were Hyperscaler CEO, I would basically ask for the a similiar deal as OpenAI or no business. Sorry Lisa Su but as a CEO giving equity to a customer is an absolute red flag because it starts a negative spirale you can't stop.
It seems that no matter the discount, OpenAI wasn't ready to make deal without equity. This tells you exactly how AMD is seen in the AI world.
OpenAI will take the compute for free and help AMD to rise stock value but it won't help AMD one bit because if AMD remains in the current position then OpenAI and Hyperscalers can get great deals with equity from AMD. The incentive isn't now to improve AMD to be competitive but to squeeze everything out of a company being desperate enough to give equity to customers.
And AMD will feel this. Nvidia will remain dominant because of ecosystem and supply. AMD can't easily replace Nvidia in supply chain and Nvidia is already strongly entrenched in many AI compute operations. And on the other side Hyperscalers are focused on their own chips (even OpenAI LOL) so they will tell AMD "Give us equity or no deal". This deal might be really the worst AMD deal yet because AMD is telling the world "here, you can get free AI compute from us financed by our equity". And while it might push AMD share price the very share price will drop 80-90% like any other one in case of an AI bubble pop.
And now imagine what will happen when OpenAI makes deals with Nvidia and AMD. Do you think Hyperscalers will just watch?
I expect Musk to make a $1 trillion deal soon. I guess, that's why he wants to get the $1 trillion from Tesla.
And do you think Meta, Amazon, Microsoft and Google will stand by while Altman and Musk are buying future supply from Nvidia and AMD?
I love that. As an investor in Nvidia, I hope that these future promises will push the stock 4-5x quickly in Cisco fashion because then I can sell and retire in my 40s with a huge pile of money watching the bubble explosion on some beach on an island :)
To get an idea, if you go gaming via cloud then fast internet + office PC or Laptop is enough. So you save way more than the GPU only in a proper comparison.
This is why I play consoles only. I can play games for years without ever changing HW and save tons of money compared to my PC gaming times.