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There's another 10,000+ in warehouses in Europe. According to the WSJ they've got mold and other issues. So far BYD is not doing a great job. Also lots of mechanical issues with cars sold in China.
And if you're killed by a Japanese / NASA battery, it's very personal. I wouldn't wish it on anyone, but someone is going to get whacked by space junk and then it will keep CNN in business for another decade.
When space based equipment is no longer functioning, they just toss it out and let it orbit the earth until the atmosphere brings it down. Earlier this month two pounds of space junk came screaming through the roof and then the floor of a home in Naples Florida. It's going to get worse. It's all fun and games until they kill someone or worse, hit a plane in flight or a ship on the ocean. Story below:
Space-Junk Strike in Florida Signals New Era of Orbital Debris
Three years ago astronauts threw out the largest piece of trash ever tossed from the International Space Station. Now some of it has punched a hole through a house in Naples, Fla.
In what may be judged as a bizarre and twisted case of “breaking and entering,” last month a plummeting cylindrical object weighing nearly two pounds hit the roof of Alejandro Otero’s home in Naples, Fla., smashed through a ceiling and punched through a floor.
When this story was first published, this high-speed home invasion from the heavens had yet to be officially verified as a space junk strike. Now, however, after retrieving and studying the object, NASA has confirmed it is debris from trash tossed three years ago from the International Space Station (ISS) that subsequently reentered Earth’s atmosphere. As the latest close encounter with clutter from the cosmos, the event has already sparked technical and legal banter about the worrisome escalation of Earth-circling, human-made refuse.
TAKING OUT THE TRASH
Back in March 2021 astronauts onboard the ISS used a Canada-supplied robotic arm to tip an abnormally hefty hunk of refuse into space—the heaviest object ever jettisoned from the space station, in fact. NASA explained at the time that the trash, called Exposed Pallet 9 (EP9), had the approximate mass of a large SUV “and is safely moving away from the station and will orbit Earth between two to four years before burning up harmlessly in the atmosphere.”
After being ferried to the ISS via a Japanese cargo ship the previous year, EP9 had been filled with 5,800 pounds of spent nickel-hydrogen batteries. But a series of logistical complications—chief among them the fact that the battery pallet could only fit in Japan’s cargo ships, of which there were no more to fly—left EP9 stranded, taking up precious space on the ISS. So NASA decided to throw it overboard. After a few years of drifting aimlessly through space, EP9 finally met its fiery fate on March 8 when its decaying orbit sent it nose-diving into Earth’s atmosphere over the Gulf of Mexico.
The European Space Agency’s Space Debris and Independent Safety Offices closely monitored the reentry of the pallet of used ISS batteries. These batteries were to undergo “a natural reentry,” said ESA in a pre-reentry communiqué, using a twist on the term for an uncontrolled plunge from space.
“The total mass of the batteries is estimated at 2.6 metric tonnes, most of which may burn up during the reentry,” ESA stated. “While some parts may reach the ground, the casualty risk—the likelihood of a person being hit—is very low.”
A SERIOUS CANDIDATE
Before NASA’s analysis was complete, Marco Langbroek, a devoted satellite tracker and a faculty member in aerospace engineering at the Delft University of Technology in the Netherlands, told Scientific American that it certainly looked possible that the object in Florida stemmed from the reentry of the EP9 battery pack.
Langbroek had reviewed EP9’s ground track as well as the reported timing and trajectory of its reentry. Handily, there was also a time-stamped security video and sound clip of the object that pierced the homeowner’s roof.
After entering the atmosphere and losing much of its speed, the debris piece probably spent a couple of minutes in subsonic free fall, Langbroek said.
“Reentries take multiple minutes, with the object fragmenting and the reentering fragments spreading along the trajectory over a stretch that can be hundreds of miles long,” he added. “Given the force of impact, I think this is a serious candidate for potential debris from this [EP9] reentry. It might well be a part of one of the nickel-hydrogen battery cells.”
At that time, Tobias Lips, managing director of satellite aerodynamics company Hyperschall Technologie Göttingen in Germany, told Scientific American that there was not much guesswork here. As a specialist in reentry analysis, he robustly simulated the fall of the ISS pallet of batteries days before the actual event occurred using “moderately conservative” rather than “worst-case” assumptions. Even so, his results suggested more than 130 fragments would survive to reach the surface. That’s “about 10 times more than for a typical reentry object of this size and mass,” he said.
Most of those predicted fragments, Lips said, would be cylinders made of Inconel—a high-strength nickel-chromium superalloy often used in aerospace applications. Nearly 350 such cylinders were in the EP9 pallet’s payload of spent batteries, where they served as power cells. “The fragment found in Naples, Florida, is most likely one of these cylinders,” Lips said.
“The recovered fragment was reported to be about two pounds in weight. Thirty-eight percent of my [simulation’s] surviving fragments are within this mass class,” he explained. “I would be very surprised if investigations of this fragment don’t confirm it being a battery cell from the ISS.”
NASA’S ANALYSIS
After NASA officials, in cooperation with Otero, took custody of the object for closer study at the agency’s nearby Kennedy Space Center, space agency spokesperson Joshua Finch told Scientific American that “more information will be available once the analysis is complete.”
At that time, Mike Weaver, a space debris expert at the Aerospace Corporation, told Scientific American that NASA’s analysis would likely begin with a rigorous examination of the object’s trajectory—as well as that of EP9—tracked against the locations of any other recovered debris.
“In this case, the location of the object in Naples, Florida, appears to be consistent with the timing and the location of the ISS battery pallet reentry,” Weaver said. “However, this is not sufficient to positively identify an object.”
Alongside the trajectory work, scrutinizing the candidate chunk of space junk for signs of scorching, melting and other effects of reentry heating would be desirable, Weaver said. Metallurgical analysis to determine its composition could be useful as well.
Sometimes serial numbers or part numbers can be found on an object, Weaver noted, which would rapidly simplify things.
Subsequently, in the April 15 blog post in which NASA announced the completion of its analysis, the agency confirmed that the item was in fact an Inconel cylinder. But rather than being part of a battery, the cylinder was a stanchion from the space agency’s “flight support equipment used to mount the batteries on the cargo pallet.”
WHAT GOES UP MUST COME DOWN
Threats from incoming orbital rubbish are real and set to grow, says Darren McKnight, a senior technical fellow at LeoLabs, a commercial provider of space domain awareness services, based in Menlo Park, Calif. As more space systems are deployed in low-Earth orbit, the old adage applies: what goes up must come down.
The vexing nub of the problem is that removing ever proliferating small pieces of orbital debris is vital for maintaining a safe space environment—and uncontrolled atmospheric reentry is by far the easiest way to do it. In fact, this happens automatically for objects in low-Earth orbit, which begin to fall as they bleed off momentum against the outer edges of our planet’s atmosphere. Yet the hands-off nature of this process means any sizable piece of unguided debris has a large swath of the planet upon which it or its fragments might fall, potentially constituting a low but real risk to multiple aviation corridors and population centers.
“The issue of aviation and ground hazard from space operations is a problem that will not go away any time soon,” McKnight says.
LEGAL LIABILITY
Before the downed debris in question was confirmed as coming from the ISS, Joanne Gabrynowicz, a professor emerita of space law at the University of Mississippi, told Scientific American that such a finding would likely prompt a dialogue about liability..
Some of the provisions of the United Nations Outer Space Treaty and its Convention on International Liability for Damage Caused by Space Objects, as well as the ISS International Governmental Agreement (IGA), could be relevant, said Gabrynowicz, who is also editor in chief emerita of the Journal of Space Law.
An analysis of various provisions in these sources and how they interrelate would probably be necessary, Gabrynowicz said, including Article II of the U.N.’s Liability Convention. Article II states that any country launching anything into space shall be responsible for damage any associated space objects may cause back on Earth’s surface.
In the case of an object striking a house, the launching nation would, at minimum, be liable for funding requisite structural repairs. Gabrynowicz added, however, that while this protocol is simple in principle, its translation to reality can become extremely complex. Things would get murky, for instance, if the errant object that struck Otero’s house had proved to be part of the spent batteries from EP9’s reentry: the batteries are NASA’s property, but they were attached to EP9—a payload launched by the Japan Aerospace Exploration Agency (JAXA).
“That could be complicated, requiring analysis of various contracts, treaties, insurance policies and the IGA. Of course, the entities involved can also agree as to how to resolve the situation,” Gabrynowicz concluded.
AN ACT OF ABANDONMENT
“NASA will want to minimize this by saying chucking stuff off the ISS is rare and this isn’t a satellite or rocket body ... and therefore is disconnected to increasing launch rates,” said Ewan Wright, a Ph.D. candidate at the University of British Columbia and a junior fellow of the Outer Space Institute, in an interview with Scientific American prior to the agency’s April 16 announcement.
“But clearly there is an issue here that uncontrolled reentries are fairly accepted, and nobody thought to look into it much further,” Wright said. One reason for laxity, he noted, is that the risks from uncontrolled space debris reentry are literally and figuratively dumped in the ocean, which covers most of Earth’s surface. But treating Earth’s seas as a space junkyard is unlikely to be sustainable forever.
“There are over 50,000 ships in the ocean at any given time and hundreds of thousands of smaller boats. The chance of a ship being hit by space debris is likely to be small, but it’s growing, and we don’t know the number for sure,” Wright said. “A cruise ship being hit by uncontrolled space debris may not kill someone, but it would raise serious questions about our continued abandonment of space debris in orbit. And the launching state would be liable to pay damages.”
Many aerospace companies employ an ethos of “design for demise” for their space-bound components to try to ensure that if the parts do reenter, they reliably burn up at high altitude. Yet even leaving aside growing concerns about the resulting contamination of Earth’s upper atmosphere with heavy metals and other pollutants, some experts consider the practice ill-advised at best.
Moriba Jah, an expert in space debris tracking and management at the University of Texas at Austin and a co-founder and chief scientist at Privateer Space, a group focused on space sustainability issues headquartered on the island of Maui in Hawaii, is one such critic.
Jah emphasizes that discarding our detritus in low-Earth orbit in hopes that this material will “naturally reenter” the atmosphere “is not a responsible disposal method but rather an act of abandonment.” Even if not legally classified as such, uncontrolled reentry “is inherently irresponsible due to the potential risks it poses to life and property on Earth,” Jah says.
NASA officials have said that they’re on the case. “The International Space Station will perform a detailed investigation of the jettison and re-entry analysis to determine the cause of the debris survival and to update modeling and analysis, as needed,” the space agency noted in its April 15 announcement.
In some sense, the unlikely intersection of a probable piece of orbital debris with a home could ultimately prove to be a good thing: it could provide another wake-up call to policymakers, major aerospace players and the public at large that when it comes to space junk in low-Earth orbit, the sky really is falling.
Glad to see you read Kindig. Very worthwhile.
My point is that 20 years doesn't matter. Methane unless it's massive in a locality, doesn't matter. It goes away quickly even on a human time scale. CO2 causes warming for conservatively 20 human generations. Methane is comparable to a massive volcano, awful for a few years but not an extinction model. CO2 is a Chicxulub level event in very slow motion. And to repeat several of my earlier posts, there is no exit for us. As a species, we're not smart enough to stop seeking additional comfort to save the planet that affords it.
For me methane is an angels-on-the-head-of-a-pin argument. Who cares? None of this matters as long as we continue to increase CO2 levels. And of course, we will. Let's not consider decreasing methane leaks or driving electric cars as anything more than a participation trophy. We're not winning. We're not even trying. I think any investor who doesn't understand this existential issue a rube.
First off, I want to say the goal to minimize methane leakage into the atmosphere is an excellent goal. Nothing wrong with it when accomplished without extraordinary additional cost. But this line quoted below from the article, (taken from one or more of the UN's AR reports), is at best a disingenuous scare tactic. Methane does create much more warming over a short period but the effects last only about 12 years as it oxidizes, whereas CO2 lasts hundreds to thousands of years.
Not a criticism, just a question. Should the average investor really leverage an account that is already highly leveraged due to it's tax avoidance? I've been funding both my kids Roth whenever they can't do it but both are invested in VOO. Nothing else. Don't think about it. Your careers and families are more important. I suspect when I'm gone and they retire they'll both be happy with that advice.
Mitch, like Bill Barr trying to reframe himself as less than a core member of the fascist right. We see you.
Two ideas Nick. We have no serious intention of stopping global warming and the pain will grow slowly enough that almost everyone will simply get used to the "new normal". There is an earth caused tipping point but it's likely 100-200 years out. We're boiling a frog in a pot.
My best investing lesson came in the late '90s when I was sure the idiotic dot-com market would crash. It did of course but I missed some of the best investing years. I try not to do that any longer. Here's the basic thesis that's worked for me: Investors are human and algos are developed by humans. Most humans are not very smart. Let them play their hand.
We live in interesting times and it's going to get more interesting over time.
I've sold all of my cars but one and it's just a daily driver. It costs almost exactly 3X what I paid a decade ago. Part of it is living in a much busier area of the country but insurance companies are reacting to problems like hurricane Ian. Home insurance isn't much better. I raised tenant's lease rates 10% this year and between inflation and insurance costs I'll make less money. I'm not complaining, just observing, as it's the tenants who suffer the most. It's only going to get worse over time. Those of us with a long term view will be out of real estate investing before it isn't profitable. For my canari-in-the-coal-mine company I watch PLD only because they're the largest US investor. Before the profitability issue is obvious their chart will have been sliding for months or maybe years.
So odd to me. I worked for Chase for three years at 5 Wall in the late '90s. It was the center of the financial universe.
When I look at that machine why do I get the distinct impression this contraption will look like ENIAC in 50 years and the average human will be about as useful since we adapt generationally at a ~10X slower rate.
We were by an earlier account about seven iterations of Moore's Law from computing systems possessing the capacity of the human brain. That's ~10-15 years. The software to train these systems takes longer but that report was over 25 years ago. Bill Joy famously predicted this about the same time. We may be nearing an inflection point. Global warming, fascism, (again), and AI mostly in control of corporations that see fascism as a good thing.
Investors should be careful, there are some massive unknown unknowns in our near future and no one in our government or our media has an incentive to analyze it. No one gets elected who delivers bad news and no one in the media gets paid serious money to produce serious news.
Like the nuclear bomb, how do we use this super-human ability? We don't have an excellent history of good decisions and I don't see anyone with standing trying to manage and bound the development of AI within a human rights and political democracy model. We'll see but I don't have high hopes.
It's already bad enough that insurance rates are at least double what they were 10 years ago.
We can have a side bet. I think Tesla wins because they have the most data, waymo data. Also, Elon doesn't care how many people die while he perfects a very imperfect system and he'll get away with it. Look at Trump. In any other 1st world country he'd be in prison. Here he's a contender to run the country. Elon is at least as ruthless and a lot smarter.
I just got an ad from IH for a Rolls Royce Bentley. Seriously? A Mercedes could be the worst car purchase in the world if RR didn't exist. You may as well buy a 55 gallon barrel, fill it with cash and light it on fire. I guess IH has arrived? Good for them.
I've posted bits of Molly White's very useful ideas before. If you're interested in tech investing, especially leading edge tech, ignore her at your own peril. Here's her latest article, this time about AI. Yeah, it's a lot like self driving cars, blockchain and other massively over hyped technology. And, of course, there's a dark side.
AI isn't useless. But is it worth it?
As someone known for my criticism of the previous deeply flawed technology to become the subject of the tech world's overinflated aspirations, I have had people express surprise when I've remarked that generative artificial intelligence toolsa can be useful. In fact, I was a little surprised myself.
But there is a yawning gap between "AI tools can be handy for some things" and the kinds of stories AI companies are telling (and the media is uncritically reprinting). And when it comes to the massively harmful ways in which large language models (LLMs) are being developed and trained, the feeble argument that "well, they can sometimes be handy..." doesn't offer much of a justification.
Some are surprised when they discover I don't think blockchains are useless, either. Like so many technologies, blockchains are designed to prioritize a few specific characteristics (coordination among parties who don't trust one another, censorship-resistance, etc.) at the expense of many others (speed, cost, etc.). And as they became trendy, people often used them for purposes where their characteristics weren't necessary — or were sometimes even unwanted — and so they got all of the flaws with none of the benefits. The thing with blockchains is that the things they are suited for are not things I personally find to be terribly desirable, such as the massive casinos that have emerged around gambling on token prices, or financial transactions that cannot be reversed.
When I boil it down, I find my feelings about AI are actually pretty similar to my feelings about blockchains: they do a poor job of much of what people try to do with them, they can't do the things their creators claim they one day might, and many of the things they are well suited to do may not be altogether that beneficial. And while I do think that AI tools are more broadly useful than blockchains, they also come with similarly monstrous costs.
What's hilarious about this is that they've likely been doing this for years and just happened to time seeding at exactly the wrong time when they were about to get large rainfall. It reminds me of our government that never thought that a clever con artist and devout fascist would be elected, (by land owning white men), and then that same guy would stuff the Supreme Court with Christo-fascists who would continue to work to get him reelected for life.
The Supreme Court refused to hear a case where the lower court ruled that a person who organizes a rally is responsible for anyone who harms another person at that rally. Currently, thanks to the Supreme Court, there are three states that have essentially banned free speech; Louisiana, Mississippi and Alabama, (of course). Welcome to Republican America where money is speech, corporations are people and people only have the rights corporations, money and the Christian right allow. It's getting ugly.
I think the Millennial need to form households like the Boomer requirement in the late '70s and early '80s will keep housing prices at least steady. Rents have moved up enough over the last few years to make home buying reasonable, especially with builders who can incentivize sales with short term lower rates and new homes with warranties. If the best homebuilders fall they will be a good investment.
My first thought was that countries with money can flood other countries or the reverse, drought them out of existence by moving rainfall out of their reach. Fascinating stuff. I'm sure CO2 sequestration will have amazing surprises for those close to the point of sequestration. It's always best to do this sort of thing near the powerless. There's a reason New Mexico is where radioactive waste is stored. What could possibly go wrong? And if it does, do it in one of the poorest states in the country.
I've seldom tried short term options trades but I'm sure you're correct. I generally look 2-4 months out with a return in the 5-10% range. These trades, mostly selling covered calls are quite safe, (90% or so positive), and tend to add 1-2% overall to my portfolio's return.
I've been quiet here lately as I've moved back into real estate which I used to think was more time consuming than stock investing but after the last few years, I think it's about the same amount of work if you want to maintain a consistent return. Also, little exercise in the equity world, lots of it in the real estate world. The main difference with real estate is that it has longer cycles and the write-offs are spectacular. If the market moves against you in real estate you don't sell you rent, maybe for a decade until the market turns around. You basically turn it into a very low tax, high yield, bond.
If you have to sell a home because it's gone up in value so much the rent return is too low, you do a 1031 exchange and buy a run down, under appreciated property. Rinse, repeat. One of the great things about real estate is that you receive a regular income which generates very little tax consequences and when you pass-on your children get the property at the current, stepped up, value and don't have to account for all the depreciation you've taken over decades.
One of the concerns I hear is the idea that real estate requires 'sweat equity' to perform well. Excuse me, everything requires sweat equity to perform well, even if you don't sweat while you work at it..:)
Medicare isn't even close to the most problematic system. Why do billionaires have to pay for a communist inspired fire department? Police? Roads? Education? Under a 2nd Trump administration we can shut all of this down except for the protection he and real billionaires require. It's not just Trump voters who are idiots, it's everyone who is too lazy to ensure they're registered to vote and actually vote. We'll get the government we deserve and I suppose we'll see what we deserve in November.
If we count the people who are too lazy to vote and those who will vote for a dictator the great majority of Americans would rather have a dictator run the country. Election turnout has been calculated for almost 100 years and 2020 was the highest turnout and that was only 62%. Seriously, a dictator was running for president and 38% of eligible voters were too busy to show up. There is a part of me that hopes they get what they deserve. This has been coming for over 40 years and they didn't see it coming?
VAT, (value added tax), is always regressive. Lower income folks spend all their money buying things they need and some of their food expenditures are already subsidized. There are over 36MM Americans on the SNAP welfare program. It costs about $1,600 a year per participant to keep these people from starving. Of course Republicans want to cut this program along with Medicaid.
What goes unreported is that the biggest welfare queens are corporations. Walmart, Amazon and McDonalds have tens of thousands of workers on both SNAP and Medicaid. Some of the usual suspect states also have a minimum wage of $7.25 an hour: Alabama, Louisiana, Mississippi, South Carolina, Tennessee, Georgia and Wyoming.
If we want to get rid of politicians like Trump and others, pay people a living wage which is likely over $20 an hour, offer free education through college, fund all K-12 schooling at the same level, not based on property taxes, subsidize public pre-school, stop funding private education, offer Medicare to everyone. Tax corporations at 20% minium.
See my previous post Nick. About half of American workers can't afford higher taxes. It will have to come from the upper income tiers.
Nick, this research from Pew should help clarify the tax and income problem. Not everyone is doing worse over the 50 years of this data but poorly educated white households are doing much worse. There's a reason Trump is focused on this already angry group, because they want to blame a system that no longer gives as much advantage to them based on skin color.
Education also has a large influence on income. In section 3 of the report you can see that those with only a high school education have almost completely lost 'the American dream'. Working hard no longer pays a dividend, only working smart.
Although the Trump era tax cuts are heavily weighted toward the top 1% of earners there is one piece of this legislation that works well for middle and lower middle class workers and that's the doubling of the standard deduction. That's scheduled to go away next year and the part that provides additional income for those who don't need it will just continue on.
As you can see, the Trump era tax cuts were designed to sunset for working people just as he finished his 8 years as president. Then Republicans could attempt to hang that noose around the neck of Democrats. Fortunately Donnie's plan didn't work out so well. Let's hope his bad luck continues.
Pew Research - Income distribution 1971-2021
I didn't read the link but from what I've read, I don't think Google is winning the AI round.
That's the Chinese real estate model. I never think a dictatorship will out produce or out create a democracy. If we can avoid the MAGA madness we should be able to continue to hire the best people in the world.
Nick, Samsung is a good company but run by very boring corporate types. Reminds me a lot of IBM. This is the company that took their massive lead in the Android world and produced the Note 7. You didn't need a fire place, your Note 7 might catch on fire any moment. Eight years later they're still trying to recover.
Trailer-Queen, nice one. Maybe Mockery Trailer-Queen. Personally I was hoping to grab onto one of those Christians as they rose to their heaven during the eclipse..:). They've been waiting for the 2nd coming for over 100 years so no doubt, Trump will just have to do. I would not make a very good politician as I'd require a sanity test: Do you believe in a all knowing, all seeing dude in the sky more strongly than democracy? Human rights, including women? No...sorry, no vote for you. Next!
Well, maybe people will actually get out and vote to stop this. As they say, we get the government we deserve.
Yes, as I said, for now, INTC is not investable.
Intel, for now, is uninvestable.
This accounts for the 20% profit private companies need to make to satisfy their stock holders and a few percent to wine and dine the politicians. My god those whores are cheap, (with apologies to whores who actually perform a service).
Interesting. In racing one of the most important things we work on is weight. Horse power is nice but weight is more important. There are two types of weight, sprung and unsprung. Lowering unsprung weight or that weight in and around the wheel is an order of magnitude more important than, for example, taking out any part of the interior not useful to the driver. This is why people will spend up to $10k for carbon fiber wheels, another 10k plus for light weight brakes, etc. That these engineers have dropped all of this weight into an unsprung area seems antithetical to me.
While your photo of Trump is charming I don't think it caught the essence of his speech. When he said, "Everyone needs a bible in their home, I have many. It's my favorite book.", even the greatest liar of the 21st Century could not keep a straight face.
And let me add, to any liberal naysayers, this man is more sharp than he was many years ago. Look at this bible, it's right-side-up...:) You can't see it of course because the liberal media doesn't want you to know this God fearing man now holds his bible correctly.
Texas is the only state with its own electrical grid. As Minnesota's PUC said, this is a Texas problem. People are leaving Texas. It used to produce some great leaders but today they've got Abbott and Cruz. Good luck.
Hi Nick. Sorry I missed our call this morning. My daughter had her baby yesterday and we're hanging out with the family. Talk to you next Sunday. Eric
Nice article from Barron's tech regarding NVDA. They just might be the most valuable company in the world in another few years - they're #3 today but are maybe overvalued at over $900 a share.
Power Moves. Everyone wants to find the next Nvidia. Sovereign wealth funds in the Middle East are reportedly considering investing tens of billions of dollars into artificial intelligence start-ups in an effort to compete with the current king of AI data center chips.
But start-ups and other large chip rivals may now have a steeper hill to climb after Nvidia unveiled its latest product roadmap this week.
On Monday, Nvidia CEO Jensen Huang announced the company’s next-generation chip architecture called Blackwell. “Blackwell will be the most successful product launch in our history,” he said during a keynote address at the GTC developers conference in San Jose.
The first issue for rivals is the sheer scale of investment required to create a state-of-the-art AI chip. Huang revealed that Blackwell, with its 208 billion transistors, cost Nvidia $10 billion to develop.
Second, AI chip start-ups have taken solace in Nvidia’s inability to meet chip demand, hoping to become a second source based on shortages alone. But that may change with Blackwell. Unlike last year, when the rise in demand happened suddenly, Nvidia has worked with suppliers to have more production ready. “The benefit we have is we’re not surprised this time,” Huang said during a financial analyst Q&A session at GTC on Tuesday. “We are geared up for an exciting ramp.”
Finally, there’s the product breadth. At GTC, Nvidia revealed several Blackwell products—including the B100, B200, GB200 Superchip, HGX B200 server board, and GB200 NVL72 liquid-cooled rack system with 72 GPUs. Got all that? The gist is that Nvidia has an offering for a wide range of AI needs and customers, from small corporate workloads to supercomputing.
The lineup fulfills the company’s promise late last year to accelerate its AI launch cycles from two years to one. “The bigger AI gets, the more solutions that will be needed, and the faster we will meet those goals and expectations,” Nvidia’s chief financial officer Colette Kress told Barron’s at the time.
The strategy isn’t new for Nvidia. It harkens back to the company’s first decade when Huang figured out a plan to win against dozens of competitors in the market for graphics chips.
In the late 1990s, Huang observed that graphics chip companies were only maintaining a leadership position for up to two years. It became a game of leapfrog. PC makers would choose new parts twice a year during the fall and spring. Since a typical graphics chip took 18 months to develop, the market leader would always fall to a better-performing chip from a competitor.
Huang cracked the code. Instead of one engineering team, Nvidia split the design team into three groups. The first would design an overall new architecture, while the second two would develop faster derivatives. It enabled Nvidia to ship a new chip every six months. The plan was called “Three teams, two seasons,” and, once deployed, the competition couldn’t keep up. The list of competitors fell from 50 to 10 virtually overnight.
Beyond product speed, Curtis Priem, who co-founded Nvidia with Huang and Chris Malachowsky in 1993, emphasized the importance of the ecosystem surrounding the company’s hardware. Nvidia provides industry specific libraries and tools to make applications rapidly. “There are a lot of me toos out there saying you can do a chip as fast, but they don’t have the software stack,” Priem recently told me.
Then there’s the issue of hiring the talent to get this all done.
“What’s the strategy with other start-ups?” You have to hire half the people at Nvidia, but they are still locked down with stock,” Priem says.
For future employees, a megacap stock that continues making new highs could be the biggest advantage of all.
I hope you're correct but this is what pacifists thought in the 1930s as fascism took over in Europe with massive support in the US. Thankfully the Great Depression made people here decide they'd rather eat than join the KKK. We were about one instant away from a 2nd Trump presidency before COVID. Fascism was so popular in the US before COVID we would have elected that idiot without any thought of consequence. American voters are dumb as a bag of hammers. Let's hope the economy doesn't give Republicans a lollipop before November.