AI is certainly a bubble but Nvidia has been working on this stuff long before the hype. I don’t think you can easily dismiss them. Personally I don’t think the future of AI is giant data centres, it will be running in desktops GPUs and dedicated AI chips. It already is.
The great thing about the stock market compared to other investments like crypto is that stocks are based on the inherent value of the business they represent. Stocks are based on financial fundamentals. You can believe in those investments because they are based on something real and not simply rampant speculation. For example.
Tesla. Worth more than most of the rest of the car market combined because… reasons?
Paypal. Lost 80% of its value starting in July 2021 over a year and never recovered because of terrible problems? Huge losses? Nope, because it “only” grew at 8-9%.
2008 US housing rated as “AAA” investment i.e. “good as cash” based on actual trash.
I mean… It would be true if there were no derivatives. When you start betting money on whether the line goes up or down, the stock price cases being reflective of the stock’s value.
In my understanding, derivatives amplify the problems and risks. Underlying that are the money people who push on these systems as hard as they can and exploit every angle. Along the lines of pushing the boundaries, the practice of brokers “loaning” shares seems like another place that’s bound to cause issues at its limits. I really wish the govt would step in and impose much stricter regulation. I’d like to trust that buying stock is investing in a company rather than feeling like the stock market is a school of small fish swimming with sharks who cheat as much as they believe they can get away with. If the focus was on dividends vs growth, I think we’d be better off. Maybe I am wrong but that’s how I see it.
I think of it like network security. Anything you do not explicitly disallow will be used, tried, and used in ways you probably didn’t think of. It isn’t a matter of expecting people to do the right (or legal) thing, most will but it’s a surety that some will not. That’s normal and why security is a process and systems have to adapt over time in response.
This is definitely realistic and not an over valuation based on AI-hype investor brain rot. Like, they’re a fucking graphics card company. Like, sure graphics cards can do some cool linear algebra, and linear algebra can do some cool things… but I’m sorry, they’re not going to be earning as much as Apple or Microsoft, companies that sell the whole rest of the computer to people and/or the plurality of software that runs on it.
Technically, they don’t even make the actual graphics cards, they just design them and then outsource manufacturing to TSMC.
But don’t you know that doesn’t matter, because by 2028 every singe company in the world is going to need a data center filled with tens of thousands of AI accelerators turning their own scrape of the internet into a chatbot, and so one of the companies that makes thouse accelerators is definitely going to have as much business as companies that make half of everyone’s phones or computer software./s
At least the article points out that this is a Wall Street valuation, meaning it’s meaningless in reality, the company doesn’t have that much money, nor is it actually worth that much. In reality, Nvidia’s tangible book value (plant, equipment, brands, logos, patents, etc.) is $37,436,000,000.
$37,436,000,000 / 29,600 employees = $1,264,729.73 per employee
Which isn’t bad considering the median salary at Nvidia is $266,939 (up 17% from last year).
Meaning speculation. Just because someone is willing to buy Nvidia stock at a $3 trillion valuation doesn’t mean it will someday achieve that kind of tangible value.
The difference is that the stock market has a very distorted definition of value.
If you say that the value of something is what someone else is willing to pay for it, I could trade my house with a friend and say they paid a billion for it, except they paid me with their own billion-dollar house, and we would both become billionaires. Of course, that would be bullshit, but if my friend and I sat on the board of the FED, it would somehow become actually real.
I see how that works, but the question is, how far can that stretch? Wall Street already tells us there is stuff worth more than 40 years of the US GDP trading around in their pockets, so how much more can that get before they get called on their bullshit like me and my hypothetical friend?
I could trade my house with a friend and say they paid a billion for it, except they paid me with their own billion-dollar house, and we would both become billionaires taxed into poverty.
Except we would grab loans from our banker friends who are also in on the scheme, and use some of that money to pay taxes and buy some congresscritters to avoid further taxes. The banker guys would then grab some loans themselves, preferably also from each other, as they slowly repackage the whole thing and then sell it to retirement funds to make it everyone else’s problem. /s
Ish, over the medium to long term Nvidia will have to start paying dividends that align with the cost of the share. Otherwise the market will leave for better paying, lower cost stocks.
You don’t have to believe in objective tangible value. However, there’s clearly a difference between a vegetable farm and a cryptocurrency. The former makes something and provides services. The latter does not. These are extreme examples of market and value distortion. The very existence of crypto is a nail in the coffin of the neoliberal theory about rational markets.
Personally I’m an AMD guy, I don’t like the proprietary approach Nvidia takes to everything.
But I have to admit, Nvidia has been on the ball for 30 years now, and it’s very impressive what they have achieved.
I think the rest of the industry needs to pool together around an open standard, if they want to have a chance to compete against the near monopoly Nvidia has because of CUDA.
I am not an AI programmer so I can’t really say. But CUDA had a head start and was some years ago allegedly the best combo with Nvidia hardware for AI programming. Over a period of time a lot of companies/projects have come to use CUDA, and so it has an advantage both for compatibility and know how among many AI programmers.
It’s kind of like how X86 has maintained a market lead on desktops and servers, despite ARM being very competitive. The change of API is disruptive and costly, so people stay with what already works.
Aside from any other forms of stock-based compensation or bonuses – which they probably aren’t gonna publish – looks like they’ve got an employee stock purchase plan.
Enroll in our current ESPP offering during the month you’re hired or during an official enrollment period, which occurs in February or August. Elect to contribute from 1-15 percent of your salary through payroll deductions.
Your offering price for NVIDIA ESPP gets set the first trading day after the month you’ve enrolled, and it remains the look-back price for up to 24 months.
During these two years, there will be four purchase periods. Your contributions over each period will purchase our shares at a 15 percent discount.
The company’s worth something like 200 times what it was in 2015.
Software Engineer compensation in United States at Nvidia ranges from $178K per year for IC1 to $542K per year for IC6.
If someone’s been maxing their ESPP out, just from that alone, they’re probably doing pretty well. You convert 15% of your salary into stock, and that 15% of your income from 2015 alone is worth ten years of income down the road, over a million.
I can’t imagine most Nvidia employees don’t make enough to become millionaires within like 5-10 years if they aren’t already. Their entry-level software engineering positions have a base pay of $147K and total compensation of $180K. The lowest paying level of senior engineers gets more like $300K… Even the ones who leave before then are highly likely to get a job with comparable pay or benefits considering they have Nvidia on their resumé.
Now, tens-of-millions-aires, I don’t think most employees get there.
Well, they technically will see SOME cents of this because I’m pretty sure Nvidia gives employees stocks too.
But yeah, I also posted this because it’s a clear illustration of how most salaries will never reflect the value your labour brings to an organization.
I don’t think many people would claim overall valuation has much of anything to do with the value labor brings to an organization.
In this case I think all it indicates is just how much the company’s stock price is driven by speculation about possible demand for generative AI, and even then I’m not sure that current price per share times number of shares divided by number of employees is a clear indication of that.
I don’t think many people would claim overall valuation has much of anything to do with the value labor brings to an organization.
Apologies, can you clarify what exactly you mean by this? Because when I say their labour is not being valued, I do extend that to the Wall Street orgs that are doing the evaluations. They look at the “product” on offer, not the people actually working and developing it.
Are you saying because stock prices aren’t steady, we can’t correlate that to salaries?
Stock movement is always speculative with or without options. The difference that derivatives makes is the ability to price in speculative value at some point in the future as well. The price of a share is reflective of what traders think a company is worth today; but an option is a reflection of what traders think the shares will be worth at some point in the future, which people can then look at and use to re-adjust their estimation of what they think the underlying share price is worth today. It’s a recursive feedback loop that (theoretically) results in share prices closer approximating a true value. A sort of predictive smoothing function.
I’m saying that while a companies market capitalization is a real number that can tell you things about a company, it is not like anyone involved has a three trillion actual dollars. The company doesn’t see any of that money directly unless they directly issue more stock which would devalue the current stock, though there are some other ways for a company to use it to their advantage. Investors might be able to get a small percentage of that by selling, but only because someone else bought in with an equal amount of money, and a large sell will drive down the price.
More to the point, the evaluations people are doing with Nvidia don’t have much to do with what the company actually produces and puts out into the world today, but the assumption that it can turn its current leadership position in AI accelerator chip designs into growing massively in size in the future when every company needs a large data center or two to train their own individual LLM’s.
A individual stocks price is driven primarily by what people think that individual stock certificate can be sold for in the future, and effected by things like how many people are trying to sell, adding all of those certificates up at current market price doesn’t actually give anyone involved much information, nor does it reflect the actual quality, quantity, material, or labor taken to make things, in this case branded computer chip blueprints, that a company puts out into the world.
Now there are a lot of competing theories of ways to try and measure labor’s value, but my work being only as valuable as the speculative amount my organization as a whole might be theoretically sold for as a whole in the future if no one tries to undercut anyone else isn’t one of the more popular ones.
The company’s valuation in a public company reflects the price that people pay for shares, so it shows the value of the company on the open market. The employees created this value, so it does indicate how much they each created quite accurately. And you would think that they’d at least get a representative percentage of that at least. I mean if you paint a painting and someone pays $1m for it, you get $1m gross. You make the software and IP that’s sold for $100m and you only get $100k a year, that’s kinda wack.
Firstly it shows the value of individual shares multiplied by the number of shares, not the company as a whole. Secondly, in this case Nvidia’s share price is based on what the company may be able to expand to do in the future, not what it currently does. Thirdly, where would this repersentive percentage come from? If it’s, issueing new stock to employees, A Nvida already does that a lot, B, creating new stock is not practically reliant on overall market cap so why is it relevant, and C, would employees also be punished for destroying the valuation if it turns out that every company doesn’t actually need a data center full of several thousand AI accelerators scraping the internet to make unique chat bots and Nvida’s market cap falls back down to what it would be based on how much money the company actually makes?
Again, Nvida primarily makes chip designs for outsourced fabrication, not market cap, that three trillion isn’t like revenue for Nvidia. In your painting example, market cap would be like if two unrelated billionaires bet 10 billion on whether or not that painter would be successful in selling a hundred different 1m paintings in the next six months, the painter might have an easier time say getting a loan for new supplies from a bank if they can point to the billionaire betting so much on them, but you know it’s not like the painter was actually paid that 10 billion that makes up the bet, right? So it’s kind of weird to say that the painter’s work as a whole is definitely worth that 10 billion bet.
The share price literally wouldn’t be what it was if people weren’t literally buying pieces of the company at that price. So it’s very literally saying what the company is worth on the open market. Even with all your obfuscation, that’s still the case.
Please explain to me how any of the child level explanation of the stock market is obfuscation, or again how you think the market cap, a purely theoretical number, could possibly be redistributed to employees outside of things the company already does to some extent, and finally why it applies in this case with a company who’s stock price is based purely on speculation about what it could do in the future and not anything it’s employees are currently doing.
Also from your comment about how share price literally is the only measure of value for a company I’m taking it you follow the theroy of value that value directly equals the amount of money paid for it, which seems inherently contradictory to this entire conversation.
Then by definition the employees are perfectly compensated for the value of their labor, as that labor can only be worth exactly what the company pays for it, and there is absolutely no reason why they should get any more. That’s actually one of the reasons why the value = money theory tends to be pretty rare outside of the far right libertarianism.
I said in a comment on mastodon that I don’t think the batch of newer employees hired at Nvidia are going to have anywhere near the same compensation as the current employees do, and this kind of helps support my suspicions…
Which could lead to a morale problem in the company too (speaking from experience)
I just responded to someone else in another comment chain, but I agree. As I said there, the more tenured employees checking out can really block anyone new from gaining the long-term institutional knowledge they need to be successful, which either leads to high new worker turnover or an implosion when the last of the long term “old breed” retire.
That is the most… American thing I read in months. Workers complaining about half decent work conditions. As a European, being harder to get hired than to get fired was always a given to me, and I believe that’s a good thing.
That’s Business Insider being Business Insider, yeah.
I’m super confused by this verbiage. If it’s harder for a worker to get hired than fired, doesn’t that mean that it’s relatively easier to get fired? Which is nit how it should be right?
Based on the article context, shouldn’t the worker quoted in the article be saying “It’s very hard to get hired here, and getting fired is even fucking harder!”?
Anyway I agree that it should not be easy for a company to fire workers. I think that knowing this, companies should try to ensure they’re onboarding quality workers in the first place, which would probably involve a difficult hiring process.
My read on the article isn’t that workers are complaining about “half decent work conditions”, but that workers are complaining about completely checked out coworkers. If you’re a new, junior level worker and both your manager and your Intermediate and Senior level coworkers have completely checked out, you’re probably not getting the performance feedback, mentorship, or over the shoulder exposure to techniques and procedures that are invaluable at that stage in your career.
I’m definitely reading between the lines, but I’m seeing an article where less tenured employees are complaining about that culture shift, and BI is putting their “happy, well-compensated employees bad” corporate bootlicker spin on it.
Thanks, I should have done that and forgot. I was typing up what I remembered from the article, then realized I’d prolly fuck up a significant portion of the relevant facts so I just deleted it all and searched for the article.
I have noticed that archive.is (and another tld I don’t remember right now, .ph?) links don’t want to load on my internal network that uses a pihole for dns and drops anything else dns related going out on the wan port of the router. Probably need to look in to that bc it’s getting annoying.
I’m like 90% sure Nvidia employees get stock options, but I’m not sure if that’d be the case for the newest batch of hires.
But yeah, this is a clear cut illustration of how salaries undervalue the actual labour provided, I don’t think any Nvidia employee’s getting 100M from their stocks + salary.
Very true. I personally know two people who were at Nvidia who have retired/are in the process of leaving now, and it hasn’t been a hassle for them personally. That obviously doesn’t speak for everyone ofc.
I also think Nvidia wants to buy back as many shares as possible from their employees like every other big public tech giant is doing right now.
From this, it describes someone losing half a billion dollars which would leave them with over 300 million. That doesn’t sound too bad and is unrelated to difficulty with RSUs.
I linked you the wrong thing, sorry 🤦 I meant to link a reddit thread discussing employee RSU rates at Nvidia, but now I can’t find it because Google AI has decided that I don’t need to see that anymore.
I’m sure you can find it if you google (again sorry), but there was definitely a lot of mixed bag experiences on it, you’re right. The people who got in by 2015-2016 and got some seniority are making out like bandits now.
Hmm, interesting, are you able to expand on that at all? The people I know who are retiring have been there a decade or so, I’m wondering what newer hires are experiencing.
I don’t know about Nvidia specifically, but I mostly only see RSUs offered to Staff/Principal level engineers or Director and above on the management track. Many times with a multi year vestment period to act as a retention tool. You can make out good at the exiting end of the deal.
IMHO its a shitty practice. There is risk if the C-level pulls some stupid shit tanking the stock. The reward could just as easily be distributed to employees with a profit sharing bonus that eliminates the risk of my options tanking while vesting. Let the employees convert to options if they want to stake on future company performance.
At least in the US, I could have used the value of my options earlier in life to help with student loans, buying a house, medical issues, having kids, etc. I grew up poor. I “pulled myself up from bootstraps” and am doing well now. I still think the whole system is a dumb gimmick.
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