ZFG + Nvidia ER & China thoughts
Still on vacation since the last ZFG post after AMD's ER.
NVIDIA's ER today is so important to listen to
Basically, Jensen confirmed a 2:1 GPU to CPU ratio. Meaning that the 8:1 and 4:1 ratios are now retired, it's either 2:1 or 1:1, or more CPUs than GPUs, as Lisa mentioned on AMD's ER.
I can see the Compute market will propably be subdivided into 4 or more aisles,
1- GPUs (Nvidia dominance, AMD challenges)
2- CPUs, (Jury is out, but it's looking like Nvidia Vs AMD again, as AMD leverages its CPU leadership to sell GPUs, so does Nvidia the other way around)
3- ASICs, Broadcom dominates while Google competes with AWS, probably will never exceed in-house adoptions as future computing gets cheaper)
4-Others like (DPUs, LPUs, switches, and controllers): fragmented, healthy competition everywhere
Thank god for the Pansando acquisition.
Meanwhile, you have your picks and shovels like HBM & NAND that benefit from every segment
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Final thoughts: China
I think the Chinese market has left the US tech Stack for good, just remove every China projection from your investment thesis.
AMD can get a marginal footing in China at best, thanks to OPEN source, but that is limited to some fine use cases where the Chinese domestic tech can't just brute force.
The US just can't launch a sudden economic war on China and also cut China off from the already inferior H20s and Mi308 chips that they were putting up with during peak demand and AI infrastructure build & Transformation, while yet the US still expects them to still place their AI future on the US tech stack and "Open Up China", No mister all you get is a few commercial planes and some soybeans "For now".
The Chinese GOV will definitely allow "some" chips as long as their domestic investments guarantee China's eventual tech independence.
And that is not just China :
2025 was an awakening moment for every country on the globe that was too dependent on the US for anything; every nation leader suddenly found themselves on the receiving end of brow-beating and a humiliating lesson for everyone, every non-US person globally now has negative views towards the US, and it's very popular to adopt independence policies now more than ever.
This doesn't magically end when the media is busy with something else; this begins a slow but sure and confident process towards decreasing dependence that, once it begins, never stops (a put-down-the-sign kind of policy).
it happened so recently with Europe, how the EU energy was mostly dependent on cheap Russian energy for decades, but had its awakening during 2022 when that very same dependence was weaponized against them. But now it's a completely different situation.
more on China: Here & here & Here ..
Have a nice ZFG day
See you on $500 SP