The Blessed Fraud Recurrence addresses, in long form, questions raised in the original Unicorns & Cockroaches: Blessed Fraud article about AI buildout depreciation schedules and potential earnings overstatement by the hyperscalers. Here, I admit it - AI really is like electrification,
#Nvidia GPU failure rates, Power is an inventory problem, and why I short
$NVDA.
"Nevertheless, faulty Nvidia GPUs and GPU memory made up almost half the failures. This amounts to about a 9% failure rate if extended over the first year. That does not seem too bad. 1 in 10 chips, not great, but not bad.
Due to the way GPUs are used synchronously during training, one faulty GPU could lay low potentially thousands more GPUs. There are countermeasures that are indeed used, but they all have a cost and involve maintenance, which is not free.
Of course the failure rate will be higher the 2nd year, and higher still the 3rd year, and we do not have that data for the Nvidia chip.
We do have lots of data on semiconductors in general."
michaeljburry.substack.com/pā¦