A month ago I wrote about why the so-called circularity in the semiconductor ecosystem isn’t some weird flaw it’s rational, and in many cases the best move on the board for NVDA and everyone else involved.
Great post! The consolidation of AI by Big Tech continues, and so does the acquihire trend. It reminds me a lot of the Meta/Scale AI deal, it has the same deal economics to a degree. The rationale is where it differs as the Groq/NVDA deal is mainly focused on the AI inference stack.
Maybe it’s just me but I don’t think this deal should come as a surprise to people - NVDA have probably been looking for a deal like this ever since their £28bn Arm acquisition got terminated (blocked by CMA, FTC(?)). These type of workarounds make sense so they can avoid another fallout à la Arm in 2016 like you said.
From NVDA’s view, I think it makes sense to pay $20bn now vs whatever it would’ve been 6 months or 1 year later to acquire potentially transformative inference tech, which in turn extends NVDA’s moat. There’s a part of me that thinks this deal is a response to Google + their TPUs.
Great post! The consolidation of AI by Big Tech continues, and so does the acquihire trend. It reminds me a lot of the Meta/Scale AI deal, it has the same deal economics to a degree. The rationale is where it differs as the Groq/NVDA deal is mainly focused on the AI inference stack.
Maybe it’s just me but I don’t think this deal should come as a surprise to people - NVDA have probably been looking for a deal like this ever since their £28bn Arm acquisition got terminated (blocked by CMA, FTC(?)). These type of workarounds make sense so they can avoid another fallout à la Arm in 2016 like you said.
From NVDA’s view, I think it makes sense to pay $20bn now vs whatever it would’ve been 6 months or 1 year later to acquire potentially transformative inference tech, which in turn extends NVDA’s moat. There’s a part of me that thinks this deal is a response to Google + their TPUs.
I’d love to get your thoughts!