Tulip Mania may be an inevitable end of the Dutch Golden Age. But arguably, it also funded or accelerated many innovations for trading & social changes. Of cause, the fallout is always more painful when it goes higher. But call me a hopeless optimist, many “Tech Manias” also accelerate fundamental changes for the long run.
In economics, a similar concept is called spillover: an event that occurs because of something else in an unrelated context. Just as a new tech created in one mania may be retooled in other industries, applications & even future innovations. There are many more exaptation examples in the book: Where Good Ideas Come From. Lucky for NVIDIA, they are having a few Tulips: Gaming, Cloud & Crypto.
Gaming — NVIDIA’s Tulip 1.0
NVIDIA is actually in the “gaming business”. Its gaming revenue grows 41% to $7.8B, 47% of its total revenue. Even it will slow down a bit as we are better coping with the new normal, tomorrow is still very bright for NVIDIA. For example, the video game fever is burning $176B in 2021. And maybe even so if we continue gaming our way to a better future 😉.
No doubt, the graphics card business is still a very healthy cash cow for NVIDIA. But what if NVIDIA dares to dream bigger. I bet they do. Otherwise, why do you think NVIDIA trying hard with Shield, Shield Table & Shield TV for years? Even those may help a bit on landing its GM20B GPU in Switch. Mobile & cloud gaming are even more exciting to pass by. Just check the numbers, Mobile accounts for 52% of the game market, and the only section will still grow in 2021, 4% & at the expense of other sections. The problem is: NVIDIA is already late in the mobile game. For example, Apple designs its own GPU & no more new Shield Tablet for while. NVIDIA really needs a new angle if to stay on top of its game for a longer run.
Cloud & Gaming — NVIDIA’s Tulip 2.0
As you noticed already, NVIDIA is very much a cloud company too. Because 47% of its revenue is from data centers, topped nicely by Mellanox acquisition in 2020. So an answer becomes obvious: cloud gaming, which is still pretty much everyone’s game 😉.
Don’t get me wrong, even I bet PS5 is the last generation console the future mass market needs, I’m not discounting the challenges to move away from the established game console ecosystems & legacy. Especially on the game development. You can not build cloud gaming by merely moving the game to the cloud. Rather, it should be a great opportunity to reinvent the whole SW stack designed specifically for better streaming gaming experience & to take advantage of the latest SW, HW & connectivity. Which is actually a better game for new players like NVIDA.
In April, NVIDIA introduced a new Grace CPU for the data center. Besides putting Arm CPUs together with its GPUs, there is a 30x increase in system memory to GPU. Sounds familiar? Yep, Apple has the Unified Memory Architecture for its M1 in 2020. Of cause, it’s for big AI & complex computation problems. But who can say running a realistic virtual world, aka AAA games is easy to compute? Bonus: you can “stream Android apps & games straight from AWS”. Sure, why on earth anyone wants that. On the other hand, there are so many Android apps & developers already. And the first big game powered by the cloud is likely fully designed for the best streaming experience. So someone may just try craze enough to build something new based on their existing knowledge & experiences.
Crypto — NVIDIA’s Tulip 3.0
Crypto could be NVIDIA’s latest Tulip as Nvidia keeps getting good surprises because of it. Most recently, its cryptocurrency mining revenue will triple to $150M in the fiscal quarter, ending May 2, 2021. Also allegedly soon, TSMC will produce 5nm chips for Bitmain, a hardware-based crypto mining solution startup. When a startup can be on par with top players, like Apple as an early adopter of TSMC’s bleeding-edge technology, 5nm. “Crypto Mania” has no shown any sign of slowing down.
Now, NVIDIA is also doubling down on CMP for professional mining. I don’t know much if crypto will be good for anything. But this opportunity to create new building blocks is too good to be wasted. Who knows, someone might just “abuse” it for the next big things, whatever those could be. Just like the miners have been “abusing graphics cards”.
Even Crypto application is still in its infancy, it does take a free ride on the prosperity of the graphics card market. I don’t know what will the future hold, but as long as gamers keep playing & funding it, anything is possible 😉.
Full Disclosure
The opinions stated here are my own, not those of my company. They are mostly extrapolations from public information. I don’t have insider knowledge of those companies, nor a whatever expert.
