While I would enjoy a US tech salary, I'm not sure we want a world where all manufacturing is set aside to focus on the attention economy.
Nvidia value deserves to be much higher than any company on the DAX (maybe all of them together, as it currently is) - but how much of that current value is real rather than an AI speculation bubble?
This, as the kids say, is just cope. American big tech makes real products. Google is not just ads. Apple is not. Amazon is not. Tesla is not. NVidia is not. Netflix is not.
NVidia might be overvalued because of the current AI hype but that does not diminish their real accomplishments!
Europe has almost no real tech companies. There is one exception, founded in 1984. Not exactly a spring chicken. How can a wealthy continent with 750 million people produce no big tech companies? It's a big problem.
Bad example given how aggressively they terminate products which don't generate the same revenue as ads.
> Apple is not.
Best example, they have done a fantastic job of being both a tech company and pseudo-fashion company.
> Amazon is not.
They don't make anything (at least nothing people want to buy) and have ad revenue as an increase slice of their pie.
> Tesla is not.
Even bigger hype/speculation vehicle than Nvidia.
> NVidia is not.
Nvidia of 5 years ago would not have appeared on this list, being too much of a niche tech company. Good at what they do, but hugely hype-fuelled.
> Netflix is not.
Running out of growth potential with their current business model, starting to introduce ads!
For all his insanity, the one thing I respect Musk for, is that he actually started successful companies that make stuff. Creating a new car manufacturer of the scale of BMW out of nothing was widely considered impossible before.
Of course he did this from a position of extreme wealth, but none of his peers managed to do that. Everyone else is just seeking rent by trying to be first to implement some tech transition that is coming anyway. And that might be a lot more valuable to society if it was managed differently...
Not to be snarky, but if AWS counts as “nothing” I’d sure like a slice of nothing please.
European economic production is nowhere near high enough and now Europe is struggling to provide for its aging population and doesn't have enough good jobs for younger people. I support redistribution generally, but the wealth has to be created first or there won't be anything to redistribute.
Also in terms of tech innovation: What part of the US-based tech innovation couldn't have been (and actually were) achieved with open-source solutions many many years earlier for a fraction of the cost, if we didn't have copyright?
Honestly, a significant chunk of the "innovation" seems to relate directly to maximizing advertisement opportunities and inducing increased consumption. Who cares if a website takes a second to load rather than 0.1 seconds? If it has content I want, 1 second isn't a big deal. If I don't care about the content, I lose nothing by being distracted by something else in that 1 second.
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More importantly:
European Economic production isn't high enough... by what standard?
https://data.oecd.org/lprdty/gdp-per-hour-worked.htm
GDP per hour worked is 74 in the US vs 69 in Germany and 54 in the EU. And the EU includes many large countries that emerged from communist dictatorship only 35 years ago, and are very much still in the process of catching up. Incidentally, the German economy is the result of the West German economy with 63 million people absorbing a failing economy hosting 16 million people in 1990.
The idea that the US is some promised land of economic prosperity while Europe is falling is entirely absurd. It's a narrative built on small relative differences and a US system that pressures people into working a lot more than Europeans do.
More importantly, even GDP per Capita wise:
https://data.oecd.org/gdp/gross-domestic-product-gdp.htm
EU per Capita GDP in 2022 is the same as USA 2016. Was the USA in 2016 struggling but now isn't?
This is all bullshit. Economic output is more than high enough and rising steadily. The problem remains solely in the distribution of
Currently EU welfare systems are under massive strain and huge waiting lists due to ageing population and economy that hasn't kept up to fund it.
There's no free lunch here. You need big companies with scale that pay huge wages as those mean a lot more tax revenue. Saying no to that kind money out of some made up idealism is just silly copium.
The EU income taxes paid by a single FANG salary employee would be the equivalent of the taxes paid by ~10 average workers. Pretty sure Germany and every other EU country would like to have such taxpayers contributing into the welfare system and not say no to it.
Europe's share of global GDP gas been on a constant decline at the expense of US and Chinese growth. Yeah it's nice to have a better welfare system than China or the US, but how will you fund it in the future if you keep having less money? Political idealism doesn't pay your food and rent.
Most of them are just payment middlemen not some innovative product nobody else can do, and Spotify survives on monopolizing and squeezing artists, not some innovative product. Kind of like Netflix except Netflix has some cutting edge streaming tech as a product not just IP licenses.
ASML is the only product innovator there except their innovative EUV lightsources are licensed from Sandia labs in the US and made by Cymer in the US which ASML bought and licensed to not seel to China. So an US invention at the end of the day.
Adyen is very underrated, and Spotify is definitely tech.
Stripe should be on the list. DeepMind at one point.
Much more difficult to scale a product across 26 different countries and nearly as many languages and regulatory jurisdictions. US is one country, not a collection of countries fighting each other, meaning your product is instantly available to 300M people speaking the same language under (nearly) the same regulations.
The US is a republic of 50 states. Each state has a huge amount of sovereignty and autonomy. There are 50 state-level regulatory jurisdictions. Not to mention the local-level of government.
But in spite of this, the US does not over-regulate. This is the big difference to Europe (I say this as an American expat living in Europe).
It's a single market on paper as the eu only mandates a small subset of common rules and regulations such as removing tarrifs or freedom of movement, but have you ever tried in practice to launch your company from Belgium to France or from Netherlands to Belgium or from Austria to Germany, or from Romania to Italy?
It's much more difficult when the rubber hits the road as every country has various extra laws and protectionist measures in place to protect it's domestic players from outsiders even if they came from within the EU. And that's besides the language barrier which means added costs. This is much less efficient than the US market.
EU countries and voters still value their national sovereignty and culture (both with the upsides and downsides) above a united EU under the same laws and language for everyone, ruled from outside their country's borders. See what happened with Brexit and the constant internal squabbling and sabotaging over critical EU issues that affect us all like the war in Ukraine or illegal mass migration. An US style unification just won't work here since every little country wants to be it's own king while having its cake and eating it too.
How do you define "tech"? Europe's domestic markets are jam-packed full of local tech companies.
Europe has many small and not very profitable tech companies. Almost no large and profitable ones. https://pbs.twimg.com/media/GNDtCtTXcAAiwFk?format=jpg&name=...
Nvidia sells chips ...
The reason Nvidia's value has been so inflated is the software stack and the lock-in they offer. CUDA, CuDNN, that's where Nvidia's value lies.
And obviously, now that all relevant ML frameworks are designed for Nvidia's software stack, Nvidia has a monopoly on the supply. That's why their value is being inflated so much.
And Nvidia doesn't have produce the chips themselves, that's all contracted out as well.
I mean, by definition given that it trades freely their market cap is real. Your market cap today is what the market thinks your future cash flows are worth. The bubble and the bubble popping should in theory both be priced into Nvidia's market cap.
What isnt' is events the market doesn't anticipate, AMD coming out with a current generation chip that can do inference as well as the H100 is something the market hasn't priced in.
Andy our manufacturing example is very poor as NVidia is certainly part of the manufacturing pipe line by designing physical products that people buy.
This is a bit of a tired viewpoint, and is evidently proven not true time after time. The collective despair/euphoria of market participants is extremely powerful and well documented, at least as far back as dutch tulips.
Stock valuations are relative, and they are relatively misvalued most of the time. That's why there are (albeit rare) funds that are capable of outperforming the market for decades - Berkshire, and Medallion for example.
It's certainly possible that AMD is valued (almost) fairly. It's just as likely that it's relatively misvalued for no reason other than emotions (lack of hype).
I think probability of that would still be priced in. Not sure what the exact probability is, though.
But if say it was clear that AMD can come up with a competitive option, then NVDA stock would drop. But if it was clear the other way that AMD can't do it, NVDA price would increase.
Nvidia sells physical things, and they are bigger than 40 companies because the companies are selling physical things?
I am not arguing hardware scales better than software but this is a strange argument in this context.
