As salesmanship goes, no one can really beat Nvidia. The narrative is brilliant. Basically they say the progress of any country or company is a function of how many Nvidia GPUs they buy.
It is a unholy cartel with OpenAI and all things American – like Microsoft, Meta, Apple etc. And the cartel is surprisingly silent about China. Nvidia says they own the full stack. And no one else does.
Oh really !! Let’s see what China is upto. Nvidia has no manufacturing of its own. It depends on TSMC in Taiwan. And China seems all set to annex not just TSMC but all of Taiwan. Including the main contract manufacturer of Apple.
Just in, Taiwan’s military detected 26 Chinese warplanes. 7 Chinese navy ships. All circling the island at once.
This is the LARGEST military presence China has shown near Taiwan in weeks. And it happened the exact same day the US announced more troops heading to the Middle East.
Here is the logic chain that should terrifyy you:
China went quiet for 16 days near Taiwan → experts said “maybe peace” → then 26 planes returned yesterday → the lull was never peace → the lull was Xi waiting for the perfect window.
America is at war in the Middle East. America’s missile stockpiles are depleted. America’s Marines are in the Gulf.
And TSMC — the company that makes 90% of the world’s advanced chips — sits on that island. Including all of Nvidias hardware.
One analyst called it: “S&P 500 down 50%” scenario. The New York Times said it would “cripple the US economy”
The uncomfortable question nobody is asking:
If China moves this week, what exactly does America do with zero available military units and oil at $100? Going to $200. This is the most dangerous geopolitical window since 2003.
And possibly the end of Nvidias home run.
But let’s go back to Nvidia. Here is the brilliant marketing narrative of Nvidia at the Morgan Stanley conference:
The pitch is brilliant for the public at large and policy makers in particular. The entire Nvidia castle rests on two foundational blocks – CUDA and TSMC hardware (which Nvidia calls its own). And Cuda is work in progress. It sits between the hardware and the application. What we call middleware. And then there is also Kubernet which cuddles around Cuda which is open source.
Claude just helped an Indian startup to replicate the functionality of both Kubernetes and Cuda into Kodoy OS. It is not end state either but there is one massive difference. Unlike Cuda, it is self learning. Somewhat like its Chinese peers.
Nvidia’s other big piece is NvLink – the protocols that connects various pieces together using a proprietary protocol. But that too just got decimated. Poet and Indian chief led startup has just created an optical transponder which makes NVLink look like a bullock cart compared to their jet rocket. And the entire industry is out to standardise the optical layer.
So the moat is not real.