That is, Jensen is going to the TSMC soup seller and saying “I’ll buy 80% of all your soup for twice the price because people are willing to pay 10x that with my ramen noodles in it.” And TSMC being the real bottleneck in this industry, knows there’s really nowhere else for its other customers to go. It of course, wants to keep all customers happy… but some will get much more soup than others.
This is probably a huge factor in keeping their advantage over their customers and competitors (but I repeat myself.) That is, TPUs and Trainium etc simply cannot acquire the necessary volume of chips at a competitive enough price-point to put a dent in Nvidia’s grip on the market. But the hyperscalers need all that compute NOW NOW NOW, so they have no choice but to turn around and begrudgingly pay Nvidia for that supply. Which puts more cash flow in Nvidia’s pocket, which buys them more soup, and on this loop continues.
“He’s a better businessperson than all of you,” Huang told the cloud computing CEOs. The soup-man doesn’t sell out all his inventory to one or two customers, but instead keeps prices high and his customer base diverse, the CEO said.
“You are not establishing the value of my products,” he said.