Elliott Says Nvidia is in a 'Bubble' and AI is 'Overhyped' 73
Hedge fund Elliott Management has told investors that Nvidia is in a "bubble," and the AI technology driving the chipmaking giant's share price is "overhyped." From a report: The Florida-based firm, which manages about $70bn in assets, said in a recent letter to clients seen by the Financial Times that the megacap technology stocks, particularly Nvidia, were in "bubble land." [non-paywalled link] It added that it was "sceptical" that Big Tech companies would keep buying the chipmaker's graphics processing units in such high volumes, and that AI is "overhyped with many applications not ready for prime time."
[...] Many of AI's supposed uses are "never going to be cost-efficient, are never going to actually work right, will take up too much energy, or will prove to be untrustworthy," it said. Elliott, which was founded by billionaire Paul Singer in 1977, added in its client letter that, so far, AI had failed to deliver a promised huge uplift in productivity. "There are few real uses," it said, other than "summarising notes of meetings, generating reports and helping with computer coding." AI, it added, was in effect software that had so far not delivered "value commensurate with the hype."
[...] Many of AI's supposed uses are "never going to be cost-efficient, are never going to actually work right, will take up too much energy, or will prove to be untrustworthy," it said. Elliott, which was founded by billionaire Paul Singer in 1977, added in its client letter that, so far, AI had failed to deliver a promised huge uplift in productivity. "There are few real uses," it said, other than "summarising notes of meetings, generating reports and helping with computer coding." AI, it added, was in effect software that had so far not delivered "value commensurate with the hype."
No shit, Sherlock. (Score:5, Funny)
Is Captain Obvious away on a holiday?
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Of course - I vehemently approve of any semblance of common sense coming from our financial overlords.
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But let's not get these assholes off the hook on account of this, as this isn't a part of a consistent drive to sanity, just a rare episode of coincidence of financial tactics and the reality ;)
FUCKIN BUBBLES! (Score:2, Insightful)
I’m a little bubble, shiny and round.
I’m pretty to look at, but I don’t make a sound
The wind lifts me up and then I drop.
Down to the dry groundwhere I pop.
They are a bubble supplier (Score:3)
They are supplying almost everyone in the bubble. When the bubble pops, they pop with it but they won't crash like the startups. They are likely smart enough to just adapt any overstock into products for the consumer market. If they are really smart, they will expect a huge drop in stock price later and have cash reserves to buy back.
Actually, it seems that stock buybacks have been going into overdrive the last several months. While it would be bad for investors, a crash in stock price could just make it really easy to go private for a time. They themselves won't be hurting.
You kids (Score:2)
get off my lawn!
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When the bubble pops, they pop with it but they won't crash like the startups. They are likely smart enough to just adapt any overstock into products for the consumer market.
Nvidia shit on the consumer market for two years. They can't rely on me to have their back when they stop profiting from servicing organizational customers.
Nothing is free or guaranteed.
I don't manage $70bn in assets (Score:2, Insightful)
and I could've told you that.
Where do I apply for a easy market analyst job at a large hedge fund?
Re:I don't manage $70bn in assets (Score:5, Insightful)
You can short Nvidia's and all related AI stocks.
Put your money where your mouth is and you'll be rich soon if you're right.
Re:I don't manage $70bn in assets (Score:5, Insightful)
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Fair. I guess that means that the market analyst's job isn't that easy after all.
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Sorry but I don't participate in the capitalist casino.
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Yet you want "a easy market analyst job at a large hedge fund"? That seems hypocritical.
Bubble? (Score:4, Insightful)
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Or explaining to their clients why Southwest is a much better investment.
Making it up on volume. (Score:3)
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Not nearly "every job". More like 30% or so. All the useless desk-jobs with no decision power and no insight required are at risk, in the next 10 years or so. The rest? Not so much.
This still will be a massive catastrophe and it will require massive adjustments in the way wealth is distributed. Or cities will burn and worse.
Re:Making it up on volume. (Score:5, Insightful)
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A "quality secretary" is these days called an office manager (and rightfully so) and has a lot of decision power. They are pretty well paid too. Definitely not somebody that can be replaced by an LLM.
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Nope. An office manager is just that. The former secretaries are "admin ass't" (who don't get paid overtime).
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You are mistaken.
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There are no "secretaries" any more. All of them were "promoted" to administrative assistant, and so they're in management, and can't join a union, and don't get paid overtime.
On the other hand, not only do they do all of what you said, but in addition fix the boss' idiocies, and clean up his writing so that it sound professional.
Re: Making it up on volume. (Score:1)
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There is a negative incentive to reduce efficiency to make yourself more important.
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Yeah. But for a brief, beautiful moment, stockholders' shares might gain in value.
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And all the rest of the world becomes poorer. Great scam!
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As long as it is everyone else who's getting poorer, it is okay. After all, poverty is a relative thing, the difference between you and the rest. So you still see yourself as being ahead.
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how much sense does it make, in the first place, for finance types to welcome advances in the level of automation that they're hoping (!) will eventually destroy every job on the planet
Are you talking about this "finance type" in particular? Because this guy is a hedge fund manager. The point of a hedge fund is to make money no matter what happens. They invest in AI. They invest in temp agencies. They invest in LinkedIn. They invest in automation companies. The idea is, no matter who wins, they also win.
Also, automation has been on the cusp of destroying society for the last hundred years. At his rate everything will be ruined in another four or five hundred years.
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Also, automation has been on the cusp of destroying society for the last hundred years. At his rate everything will be ruined in another four or five hundred years.
No, it has not. This time is different. And when you actually look at what jobs will get replaced, it becomes obvious. If you just mindlessly think "automation" then, sure, this time looks like all the other before.
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Everything was ruined at least a hundred years ago, if not five.
The fields. We yearn for them. Any day now some politician will sweep to victory with the slogan "Backbreaking labour and 50% child mortality for all!"
Comment removed (Score:4, Interesting)
Re: Nvidia's bubble is called 'crypto' (Score:2)
And AI is not overhyped, just completely misunderstood.
I completely agree. One problem with these kinds of technical bets is that most people don't understand enough about the tech to make informed decisions. And anothee problem is people get lucky in the market and think it is normal to make 4000% in a few years on a single stock. Normal is investing for the long term. With consistent growth you can reap the rewards. Is NVDA going to be around in 10 years? Seems likely. Will they control 90% of the AI hardware market? Probably not. But some aspect of AI is nev
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It is misunderstood. But first...
I do believe that capital spending will continue to be massive for now. This is based on other large massive loss leaders: Amazon with Alexa (it is a great timer...) and Meta on VR (great hardware for the price). AI has much more of a "control the world" aspect, and multiple large funded competitors. It will thrive on funds for the time being.
Regarding understanding.
The current models are quite good, we just haven't figured out how to effectively use them. For single t
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AI isn't going to die - it's been around for a few decades, and AI being used in places has been in the ne3ws for the past couple.
The recent hype about AI is just following similar bubbles that erupted around blockchain, then NFTs, then AI. It's nothing about he underlying technology - we still have cryptocurrencies and NFTs after all, but the amount of money "investing" in these things.
People are throwing billions of dollars around just to get in on something AI. Eventually it'll pop in a year or two when
Agreed, from a financial perspective (Score:4, Insightful)
Current AI will not generate a lot of profit anytime soon. Companies will release a tsunami of half-baked, annoying and useless AI crap. Customers will be angry. The top search will be "how can I turn this crap off". The backlash will hurt AI for years. That said, I'm optimistic that future AI will be developed that will actually do useful stuff that is worth paying for. As always, the problem is that investors want profits now
As for Nvidia, they are a solid company that makes good stuff. But yeah, the stock price is more than a bit insane
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We are definitely setting up another "AI winter". The AI field has pulled this crap really often enough, but they do not learn.
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Huh. Kinda ironic, that.
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Yeah, Alexa has switched to an AI LLM to answer questions; the answers *sound* good on the surface, but are just wrong.
This week I asked Alexa "On what currency does Abraham Lincoln appear?" Alexa: "Abraham Lincoln appear on the united states twenty dollar bill" Which actually features Andrew Jackson.
and "Is it a rule in Monopoly that getting three doubles sends you to jail?" Alexa: "[blah blah] when the player gets three doubles, such as double twos, double fives, or double *nines" (Monopoly uses 6 sided d
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"The top search will be 'how can I turn this crap off'": I don't know if it's the *top* search, but when Microsoft rolled out CoPilot, there were immediately a lot of people searching for how to turn it off, and a lot of nerd-sites answering that query.
Duh (Score:3)
Only the usual mindless cheerleaders still think the current AI hype is any different than the previous ones. They all fizzled out. This one has already started to do so as there are still noreal applications besides "better search" (which is only were you get links to actual content) and "better crap" (which does not have that many applications, after all).
It is basically all a big clusterfuck of destroying money by the shipload.
Ask Ismail Haniyeh about AI (Score:1)
Nvidia is not an AI company (Score:2, Interesting)
Nvidia makes processors to handle complex computing tasks. Yes they get used for AI and crypto mining, but also video game rendering and more pedestrian forms of number crunching. Their product will continue to be in demand even if AI and crypto bubbles burst.
Re:Nvidia is not an AI company (Score:5, Insightful)
Their current (over)valuation is entirely about their AI products.
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Nvidia just raised its order [tweaktown.com] for its upcoming Blackwell AI GPs by 25% at TSMC. In other words, there is more demand than anticipated. There might be overhype around AI, but if you need to increase production by 25% that's a good sign people are still buying.
This is in addition to companies already buying tens of thousands of Blackwell GPUs [pcgamer.com] before they've been made.
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In a gold rush, the sure money is in selling shovels.
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Not on this level.
Plutopigs (Score:2)
The rich ran out of tax havens, so they spend on tech fads instead.
Tax the fuckers!
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This is the kind of thing that always happens whenever there is excess capital — money just lying around. The rich folks literally do not know what to do with all that money, so they start speculating. Playing. Fucking around.
And we get things that hurt us economic normies, like the weird jump in at-the-pump gasoline prices during W's administration, which fell off again once we hit the Wall Street crash — itself driven by t
Even if AI not overhyped, NVidia in a bubble (Score:1)
In Apples recent earning release, they revealed that all of the training they had done for AI was not on NVidia hardware, but on Google's...
There are other dedicated AI chip makers out there, and they are doing good work. With Apples announcement that you can have a massive AI system that has nothing to do with Nvidia, It really makes you question the forward earnings in relation to share price...
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Most of the competitors are stuck with sub-par interconnect, except Google who has ICI and OCS. Ethernet isn't really designed as a scalable supercomputer interconnect equally at home on a single substrate as across cable. UALink will come eventually, but the hype will have died down by then.
WTF does he know? (Score:2)
How would a hedge fund manager know whether a tech is viable or not? That's like asking an oncologist to defend your court case. Two different fields.
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Speaking as a computer professional with a B.Sc in CIS, and an almost 40 year career as a programmer and sysadmin, it's a bubble, and all bs. It's typeahead writ large, and if you don't understand that, you don't know what you're talking about.
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He is a smart person that actually looked at things. You may try doing that yourself sometime.
Prediction (Score:1)
The 90's might be calling (Score:2)
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NVidia is making money by the truckload right now, though. I don't see that changing for the next 18 months. Maybe by then, the big tech CEO's will have realized that ChatGPT and it's clones aren't quite as smart as they were hoping it would be?
its definately a bubble but there's some use too. (Score:2)
You've only got to play with ChatGPT or Ollama for about 5 minutes to realise that AI is far from all it's hyped up to be.
That said it has its uses, mostly as entertainment or as a source of basic information that you don't need to trust the accuracy of.
How does he feel about Crowdstrike? (Score:2)