Excellent article Devansh. What stands out to me is how this isn’t just capital consolidation but cognitive consolidation. Once CUDA becomes the default mental model for compute, the monopoly extends far beyond hardware. The next fault line may not be chips, but energy and memory bandwidth. I think whoever cracks those constraints will shape the next architecture cycle. Keen to hear your thoughts. Once again, great article. Got me thinking!
I enjoyed the article, but I'm left wondering. Is there a cuda bubble?
Politically, I can see a forced break of global monopolies, which could lead to a break up of truly global monopoly companies... Leading to a collapse in their future values?
You can't really break up cuda because it's dominance is due to an ecosystem around it, not the technology itself. Regulating that without overreach would be a shit show. Especially with how many ml frameworks are always being built on that
That’s a really interesting take Timmy. I don’t think it’s a CUDA bubble as much as a kind of architectural lock-in. The real fragility in my mind is dependency not valuation. When so much of the AI economy, from national R&D to private capital, runs through one compute stack, any disruption whether political, supply-chain, or regulatory becomes systemic. The next realignment might not come from policy, but from geopolitics or a new compute paradigm that breaks the current mental model.
Good question, Timmy. I probably over-compressed that thought. CUDA is the specific tech layer (Nvidia’s programming framework for GPUs). Architectural lock-in is what happens because of it. Once everything from research code to data centers is built around CUDA, switching off it becomes economically irrational. So CUDA is the tool; the lock-in is the trap. Hope this clarifies?
Thanks I get that. I'm still not picking up the difference between "it's not a cuda bubble", and "the lock-in is the trap". My point was that a trap is a bubble, IF global forces break open the trap.
Yes, exactly. I think we are describing the same fragility from different angles. If the dependency ever snaps, it would unwind like a bubble. I just see that risk as slower-moving, because the dependency itself is still deepening.
I do wonder though does the cuda monopoly exclude an AI bubble? I suppose there is still a chance that the revenue of AI cannot justify the extreme spendings on data centers and infrastructure?
It seems like you are using a definition of “bubble” different than everyone else. Relevant Example: dot-com bubble. No one would argue that dot-com technology didn’t have real fundamental value during that bubble. Only that the market prices decoupled from that value during the bubble then corrected back BUT NOT TO ZERO like you seem to be using in your definition. Bubble or not is a question about the FUTURE fundamental value, if future value end up high enough to justify today’s market values then no bubble, if you think it won’t and today’s market valuations are too high then you are saying there is a bubble.
This article is excellent in general for pointing out that even if there IS a correction coming, that the monopoly position can still be cemented. Also by pointing out that vendor financing IS a way for them to activate accelerate the tech uptake and grow the future fundamental value faster than it would have (I.e. preventing a bubble by making today’s speculation come true).
Can I take it another step back? The AI infrastructure spend literally did not happen yet. Altman and these 2030 projections are about 2030. Last I checked, we are in 2025. If anyone talks to people in the supply chain and infra side, they will quickly find out that OpenAI is pie in the sky. People get all worked up about the spend but what they are really saying is 1) some of the stock prices of certain stocks are deranged (or some of the people are haters bc they missed out and are too lazy to understand the industry and rather rely on confirmation bias); or 2) these are really big numbers that I cannot understand (and am scared of).
Think its healthy to have strong perspectives, not so much about any right/wrong takes on it, but that our depth of understanding is that much more - illuminated ⭐️🔥….🤞
Devansh you are flat out wrong. It’s one thing for AWS to give discounts to start ups. It’s another for massive investments in prime customers. Look up Global Crossing and Lucent for clear examples of the same fraud play book.
The issue is revenue recognition if I pay you $100 and you “invest” $90 back to me, that is not a true sale. Transactions like that cook financial statements. You did not address that, which is the real issue, not the monopoly lock in of CUDA, or any othe tech issue. Mark my words.
1. Companies are relying on financial engineering (something we've discussed at length in the live streams/other posts).
2. There are companies primed to bust.
3. The technology itself has very strong long term potential.
Let's take your example of lucent etc. Unlike those cases, Gen AI has very clear growing demand from outside. The companies with the biggest bets in it have massive revenue streams from outside it and very clear floors for how much they will use it. So this is structurally very different.
Also this article is specifically about AI as a technology. Going back to the dot com bubble, yes many internet companies then were wiped out, but the Internet has more than paid for itself. Not sure why you think ai will be any different.
You outdid yourself on this one Devansh - really excellent.
I may be completely off here, but the only way I can see an alternative commercial architecture gaining traction is if someone like AWS (and honestly, probably only AWS) puts their weight behind it - like they did with Graviton.
The migration with AI compute is more complex than the move to Graviton was, but with Amazon's scale, the payoff could potentially be huge for them even with relatively small cost savings from an alternative architecture. And it would also give AWS something that might be even more valuable to them long-term than the cost savings - lack of dependence on NVIDIA.
The other potential disruptor here is China. AI tech export restrictions are already pushing them to develop alternatives, and I only expect it to continue. Even with the NVIDIA sales carve-out, China is highly allergic to dependence on NVIDIA (or any non-Chinese company), and they're likely very willing to pour national resources into it. So, I expect they'll eventually have their own alternative, and to push it internationally once they do. But I have no idea how long that will take.
maybe needed add to the head title.. in the west. China, an Russia are applying AI where it worst, agriculture, science, research, engineeristics, communications, medicine, prospection, extraccions, chains production, logistics, transports, and so on, the west its using AI on a hollybollywoodian mind asset. Even if as fkr EU racism is killing them, both, them picked up advanced and so well SGEM students, technics, processkrs to fullfill Silicon Valey advance, inEurope the opposite, advances were reserved for only the rich sonvs as collider particles Laboratory in Switzerland.. and even expulsing or cancel foreignets from the science places as US did. Result: sinical, China in 2 years did own orbital Station, and working at home finished first the own "Sun" project and are ahead of mist science. Payenting in sny sector more thsn the west.
AI is a tool, if you put stupid people to handle..or use it for fun...
Excellent article Devansh. What stands out to me is how this isn’t just capital consolidation but cognitive consolidation. Once CUDA becomes the default mental model for compute, the monopoly extends far beyond hardware. The next fault line may not be chips, but energy and memory bandwidth. I think whoever cracks those constraints will shape the next architecture cycle. Keen to hear your thoughts. Once again, great article. Got me thinking!
That's my hope too
I enjoyed the article, but I'm left wondering. Is there a cuda bubble?
Politically, I can see a forced break of global monopolies, which could lead to a break up of truly global monopoly companies... Leading to a collapse in their future values?
You can't really break up cuda because it's dominance is due to an ecosystem around it, not the technology itself. Regulating that without overreach would be a shit show. Especially with how many ml frameworks are always being built on that
That’s a really interesting take Timmy. I don’t think it’s a CUDA bubble as much as a kind of architectural lock-in. The real fragility in my mind is dependency not valuation. When so much of the AI economy, from national R&D to private capital, runs through one compute stack, any disruption whether political, supply-chain, or regulatory becomes systemic. The next realignment might not come from policy, but from geopolitics or a new compute paradigm that breaks the current mental model.
Thanks. Can you explain the difference between architectural lock-in and CUDA, I'm a bit lost on your point here.
Good question, Timmy. I probably over-compressed that thought. CUDA is the specific tech layer (Nvidia’s programming framework for GPUs). Architectural lock-in is what happens because of it. Once everything from research code to data centers is built around CUDA, switching off it becomes economically irrational. So CUDA is the tool; the lock-in is the trap. Hope this clarifies?
Thanks I get that. I'm still not picking up the difference between "it's not a cuda bubble", and "the lock-in is the trap". My point was that a trap is a bubble, IF global forces break open the trap.
Yes, exactly. I think we are describing the same fragility from different angles. If the dependency ever snaps, it would unwind like a bubble. I just see that risk as slower-moving, because the dependency itself is still deepening.
Bold take, respect.
I do wonder though does the cuda monopoly exclude an AI bubble? I suppose there is still a chance that the revenue of AI cannot justify the extreme spendings on data centers and infrastructure?
As I've mentioned in the work, an overvalued market is not the same as a bubble.
I do believe there will be a massive market correction as a lot of money goes into useless stuff. But that doesn't make the technology a bubble.
It seems like you are using a definition of “bubble” different than everyone else. Relevant Example: dot-com bubble. No one would argue that dot-com technology didn’t have real fundamental value during that bubble. Only that the market prices decoupled from that value during the bubble then corrected back BUT NOT TO ZERO like you seem to be using in your definition. Bubble or not is a question about the FUTURE fundamental value, if future value end up high enough to justify today’s market values then no bubble, if you think it won’t and today’s market valuations are too high then you are saying there is a bubble.
This article is excellent in general for pointing out that even if there IS a correction coming, that the monopoly position can still be cemented. Also by pointing out that vendor financing IS a way for them to activate accelerate the tech uptake and grow the future fundamental value faster than it would have (I.e. preventing a bubble by making today’s speculation come true).
Can I take it another step back? The AI infrastructure spend literally did not happen yet. Altman and these 2030 projections are about 2030. Last I checked, we are in 2025. If anyone talks to people in the supply chain and infra side, they will quickly find out that OpenAI is pie in the sky. People get all worked up about the spend but what they are really saying is 1) some of the stock prices of certain stocks are deranged (or some of the people are haters bc they missed out and are too lazy to understand the industry and rather rely on confirmation bias); or 2) these are really big numbers that I cannot understand (and am scared of).
Yes excellent and fair take by @Devansh 🫡👏🙏. Great Read. I agree with many aspects. Wrote quite a bit about Nvidia’ stack (extreme design) here: https://interestingengineering.substack.com/p/nvidias-extreme-co-design?utm_source=share&utm_medium=android&r=223m94
Also read this (if you have the time):
Think its healthy to have strong perspectives, not so much about any right/wrong takes on it, but that our depth of understanding is that much more - illuminated ⭐️🔥….🤞
https://interestingengineering.substack.com/p/all-in-ais-house-of-cards?utm_source=share&utm_medium=android&r=223m94
Will read it soon.
Devansh you are flat out wrong. It’s one thing for AWS to give discounts to start ups. It’s another for massive investments in prime customers. Look up Global Crossing and Lucent for clear examples of the same fraud play book.
The issue is revenue recognition if I pay you $100 and you “invest” $90 back to me, that is not a true sale. Transactions like that cook financial statements. You did not address that, which is the real issue, not the monopoly lock in of CUDA, or any othe tech issue. Mark my words.
Multiple things can be true--
1. Companies are relying on financial engineering (something we've discussed at length in the live streams/other posts).
2. There are companies primed to bust.
3. The technology itself has very strong long term potential.
Let's take your example of lucent etc. Unlike those cases, Gen AI has very clear growing demand from outside. The companies with the biggest bets in it have massive revenue streams from outside it and very clear floors for how much they will use it. So this is structurally very different.
Also this article is specifically about AI as a technology. Going back to the dot com bubble, yes many internet companies then were wiped out, but the Internet has more than paid for itself. Not sure why you think ai will be any different.
AI is here to stay.
The tech isn’t going anywhere.
No question there.
Some CFOs might go to jail for booking bogus sales.
You outdid yourself on this one Devansh - really excellent.
I may be completely off here, but the only way I can see an alternative commercial architecture gaining traction is if someone like AWS (and honestly, probably only AWS) puts their weight behind it - like they did with Graviton.
The migration with AI compute is more complex than the move to Graviton was, but with Amazon's scale, the payoff could potentially be huge for them even with relatively small cost savings from an alternative architecture. And it would also give AWS something that might be even more valuable to them long-term than the cost savings - lack of dependence on NVIDIA.
The other potential disruptor here is China. AI tech export restrictions are already pushing them to develop alternatives, and I only expect it to continue. Even with the NVIDIA sales carve-out, China is highly allergic to dependence on NVIDIA (or any non-Chinese company), and they're likely very willing to pour national resources into it. So, I expect they'll eventually have their own alternative, and to push it internationally once they do. But I have no idea how long that will take.
maybe needed add to the head title.. in the west. China, an Russia are applying AI where it worst, agriculture, science, research, engineeristics, communications, medicine, prospection, extraccions, chains production, logistics, transports, and so on, the west its using AI on a hollybollywoodian mind asset. Even if as fkr EU racism is killing them, both, them picked up advanced and so well SGEM students, technics, processkrs to fullfill Silicon Valey advance, inEurope the opposite, advances were reserved for only the rich sonvs as collider particles Laboratory in Switzerland.. and even expulsing or cancel foreignets from the science places as US did. Result: sinical, China in 2 years did own orbital Station, and working at home finished first the own "Sun" project and are ahead of mist science. Payenting in sny sector more thsn the west.
AI is a tool, if you put stupid people to handle..or use it for fun...