170: Nvidia Q2 Highlights, Misguided Mastercard vs OnlyFans, GlobalFoundries IPO, Microsoft Pricing, Tiktok Drama, and Cloudflare's Biggest DDoS

Vacation Edition #2

I call this one: “If browser tabs were books”


Investing & Business

Nvidia Q2 Highlights & Thoughts

I wonder if Nvidia has anything in its vast R&D labs that is designed to do AI/ML compute in the data-center, but isn’t part of the original GPU-pixel-pushing lineage.

Something 100% designed for machine learning training and/or inference (in same package or splitting training/inference..?), maybe more similar to what Jim Keller is working on these days at Tenstorrent.

The general idea is that the GPU was originally built for 3D graphics, and while it turns out that the same kind of “embarrassingly parallel” compute works well for ML, if you were designing something from the ground up for ML today, you may make different choices.

Nvidia has made many of those choices to tune its chips for exactly that (ie. the data-center stuff clearly isn’t made for gaming, haha), but as far as I know, it’s still part of that same family tree and I wouldn’t be surprised if it still carried a few decisions that are local maxima and, that with a clean slate, could be reset to better spots on the map.

I have no specific info on any of this, just thinking out loud… If you know anything about such an initiative, please let me know (reply to the email or in the comments on the site).

Some highlights from the Q2 transcript:

Nvidia RTX technology has reset computer graphics and spurred our biggest ever refresh cycle. Ampere has been our fastest ramping gaming GPU architecture on Steam and the combination of Turing and Ampere RTX GPUs have only upgraded about 20% of our installed base. 80% have yet to upgrade to RTX.

Even after two generations, still 80% are on pre-RTX tech, and more and more games support RTX and are doing increasingly cool things with it as both the tech matures and the game-makers have more experiences building environments with this type of lighting/reflections.

50% of our data center business is going to our vertical industries. Our hyperscales make up the other portion of that, slightly below the 50%. And then we also have our supercomputing business with a very small percentage but doing quite, quite well.

I think that’s an interesting mix. It’s easy to go by media coverage and think that hyperscalers like AWS and Azure are buying everything, but slightly over 50% of the data-center business is going to others customers.

the audience for global e-sports will soon approach 0.5 billion people, while the number of those who livestream games is expected to reach over 700 million. The number of PC gamers on Steam is up almost 20% over the past year.

Amazon was so early to this, buying Twitch for $970m in cash back in 2014.

I still remember how the company started as Justin.tv, and Justin livestreamed his life 24/7, which wearing a backpack that had (iirc) 4 cellphones multi-plexed so he could stream low-resolution video when he was out and about in San Francisco.

I watched some of those early streams (him hanging out with friends in a loft.. nothing too exciting, but the tech felt sooo cool at the time). How far we’ve come in a decade…

CMP revenue, which is recognized in OEM, was $266 million, lower than our original $400 million estimate on reduced mining profitability, and we expect a minimal contribution from CMP going forward.

This is a combination of the crypto crash during the quarter plus Ethereum moving to a proof-of-stake rather than proof-of-work model (hallelujah).

GeForce now reached a new milestone this quarter surpassing 1,000 PC games, more than any other cloud gaming service. The premium tier is available for a subscription of $10 per month, giving gamers access to RTX class performance, even on an underpowered PC, Mac, Chromebook, iOS or Android device.

This is really cool. They seem to be executing well on their game-streaming platform. I wish I had numbers that compared it directly to the competitors (Stadia, Xcloud, etc).

One thing it has going for it is that it’s bringing high-powered PC gaming to the masses, while something like Xcloud is more limited to console gaming.

Video above gives an idea of what Omniverse can do.

At SIGGRAPH last week, we announced an expansion of NVIDIA Omniverse, our simulation and collaboration platform that provides the foundation of the metaverse. Through our new integrations with Blender, the world's leading open source 3D animation tool and Adobe, we're opening the Omniverse platform to millions of additional users. We are also collaborating with Apple and Pixar to bring advanced physics capabilities to Pixar's Universal Scene Description framework, embracing open standards to provide 3D workflows to billions of devices. [...]

Over 500 companies are evaluating Omniverse Enterprise, including BMW, Volvo and Lockheed Martin, and more than 50,000 individual creators have downloaded Omniverse since it entered open beta in December.

I covered this a bit in edition #169.

I think it’s really interesting to see them build and expand their range of software tools and APIs.

We announced NVIDIA Base Command, our Software-as-a-Service offering for operating and managing large-scale, multiuser and multi-team AI development workloads on DGX SuperPOD. Base Command is the operating and management system software for distributed training clusters.

We also announced general availability of NVIDIA Fleet Command, our managed Edge AI Software-as-a-Service offering. Fleet Command helps companies solve the problem of securely deploying and managing AI applications across thousands of locations, combining the efficiency and simplicity of central management with the cost, performance and data sovereignty benefits of real-time processing at the edge.

More SaaS products. This is clearly a trend for them, and fits perfectly with Jensen’s frequent line that Nvidia has more software engineers than hardware engineers.

CUDA now has been downloaded 27 million times since it launched 15 years ago, with 7 million in the last year alone. TensorRT for inference has been downloaded nearly 2.5 million times across more than 27,000 companies.

the total number of developers in the NVIDIA ecosystem now exceeds 2.6 million, up 4x in the past 4 years.

Part of the power of their ecosystem is that once you have the hardware, you start using the frameworks/libraries/APIs, and once you’re familiar with those, it’s much more natural to use one of their software products like Omniverse or Base Command than to use something from a third party. It’s all very self-reinforcing.

This is why the number of devs on the platform is so important — it’s a pretty sticky group.

We do expect gaming to be up slightly on a sequential basis. But remember, we are still supply constrained [...]

we have and are securing a pretty significant long-term supply commitments as we expand into all these different market initiatives that we've set ourselves up for. I would expect that we will see a supply constrained environment for the vast majority of next year is my guess at the moment.

Growth in gaming still mostly a function of how much supply they can find, not how much demand there is. It’s a high-quality problem to have.

AI model sizes is doubling every 2 months.

It's doubling not every year or 2 years, it's doubling every 2 months. And so you could imagine the size. We're now talking about training AI models that are 100 trillion parameters large. The human brain has 150-plus trillion neurons. And so that gives you a sense of the scale of AI models that people are developing.

This is part of an explanation of why hyperscalers are basically building supercomputers in-house, because these large training models require these huge clusters with lots of high-bandwidth, low-latency networking capacity (which Mellanox provides).

This plus the move to the zero trust security model — which is a lot more computationally intensive than the castle & moat approach it replaces — should really keep demand very strong for next-gen networking gear (DPU/SmartNICs, etc).

Here’s Jensen going into full thousand-yard-stare-visionary mode about AI:

At the highest level, the important thing to realize is that artificial intelligence, it is the single greatest technology force that the computer industry has ever seen and potentially the world has ever seen. The automation opportunities, which drives productivity, which translates directly to the cost savings to the company, is enormous.

And it opens up opportunities for technology and computing companies, like it ever never happened before. [...]

The fact that we could apply so much technology to warehouse logistics, retail automation, customer call center automation is really quite unprecedented. The fact that we could automate truck driving and last mile delivery, providing an automated chauffeur. Those kind of services and benefits and products are never imaginable before. And so the size of the IT industry, if you will, the industry that computer companies like ourselves are part of, has expanded tremendously.

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‘Chipmaker GlobalFoundries files confidentially for U.S. IPO’

GlobalFoundries Inc has filed confidentially with U.S regulators for an initial public offering (IPO) in New York that could value the chipmaker at around $25 billion, people familiar with the matter said on Wednesday. [...]

Intel has yet to make a formal offer for GlobalFoundries and may not do so (Source)

Seems like this could either be a sign that they’re not interested in being acquired by Intel, or a negotiation tactic to try to get a better price. To be continued… (sorry, my brain is still on vacation, the clichés are hard to fight back in this weakened state)

⬆️ Microsoft Pricing ⬆️

On March 1, 2022, we will update our list pricing for the following commercial products: Microsoft 365 Business Basic (from $5 to $6 per user), Microsoft 365 Business Premium (from $20 to $22), Office 365 E1 (from $8 to $10), Office 365 E3 (from $20 to $23), Office 365 E5 (from $35 to $38), and Microsoft 365 E3 (from $32 to $36). These increases will apply globally with local market adjustments for certain regions. There are no changes to pricing for education and consumer products at this time. (Source)

At first glance this may seem like a pricing flex, but if you take a step back, it’s pretty much the opposite because this is their “first substantive pricing update since [launching] Office 365 a decade ago”.

In the enterprise software world, this is almost unheard of.

Especially since even this move is pretty far from pure pricing, as the products have evolved a lot in the past decade and deliver more functionality / features / security / whatever. So a way to look at it is that this change is just catching up with the product improvements and inflation, and probably not fully.

To me this reads as Microsoft being quite aggressive in wanting to create value through growth and converting perpetual licenses holdouts (or pirated copies) to the SaaS versions of its products.

It’s also probably a way to stay under the anti-trust radar…

I mean, if you look at these prices and try not to anchor on software prices in general, but look instead at the value provided, the fact that someone can do a complex office/knowledge worker’s job on tools that cost the equivalent of a few Starbucks coffees per month is pretty remarkable.

Most companies no doubt spend (spent?) more on rent, heating, electricity, insurance, cleaning crew, security personnel, etc, than on these software licenses, yet they’re probably more core to the work being done.

‘OnlyFans to Block Sexually Explicit Videos Starting in October’

Ok, I have thoughts on this, but first: This thread is the best context I’ve found (assuming it’s true — sources cited here):

A lot of people are getting the OnlyFans story wrong, and the reality of it is a lot more damaging and concerning to both the livelihood of sex workers and online freedom in general.

OnlyFans isn’t ditching porn and sex workers because it’s trying to get new investments. It’s ditching them because on October 1st of 2021 MasterCard is implementing new rules governing sites with adult content that use their payment processing systems.

These rules will basically require that OnlyFans (and every other site that accepts MasterCard payments) not only fully verify every user and every person who appears in every adult video, but review all posted content before publication, including real-time review of livestreams

The new records-keeping, review processes, verification and other requirements are going to be expensive and time-consuming. OnlyFans seems to have decided it’s not worth it. More importantly though, these rules will put incredible pressure on smaller sites and indie creators.

If the rocket-ship with 75% EBITDA margins can’t handle these rules, who can?

Of course, they could just decide not to accept MasterCard, but it’s likely Visa and others will follow suit eventually

So why the rule changes? Because last December the New York Times published an opinion piece by Nick Kristof caller “The Children of Pornhub” that accused the site and its parent company of profiting off revenge porn, child porn and sex trafficking.

Which, to be clear, they kinda were. PornHub was notoriously bad among the tube sites for its reckless lack of content moderation and exploitation of the people whose videos ended up there. Because of the story, Visa and MasterCard both cut PornHub off. [...]

But here’s the thing: Kristof’s story might have been correct on some of PornHub’s abuses but it was deeply manipulative and painfully wrongheaded about sex trafficking in porn and, like almost anything he writes about sex, a filtered version of Christian dominionist propaganda

One of the primary sources in Kristof’s article is Traffickinghub founder Laila Mickelwait. She also works for the group Exodus Cry, a Christian group that is among other things anti-sex, anti-homosexuality and, naturally, anti-semitic.

Groups like this don’t care about sex trafficking or non-consensual videos on a porn site. Those are footholds to their broader goal, with is to destroy the entire sex industry. That the majority of it is legal and consensual is pointless; they want it all gone on principle.

From the Exodus Cry website:

Gotta love the irony of citing Jesus’ love for the oppressed and marginalized as they further marginalize and take away the livelihood of sex workers in a way that doesn’t really help those who are abused (but probably increases abuse by removing one of the safest platforms and pushing things underground):

Started as a prayer meeting. Sounds about right.

Sex trafficking makes a good narrative toward that goal. It’s why the old anti-porn Morality in the Media group from the 1960s is now called “The National Center on Sexual Exploitation” [...]

The attack on PornHub did nothing to stop sex trafficking and a lot to take money out of the legal porn industry. The new MasterCard rules are a direct result of this, which basically means an overwrought Christian anti-sex fever dream is now dictating sexual content online.

Almost the entire anti-trafficking movement is an Evangelical project to get liberal supporters to sign off on a laundry list of Christian anti-sex policies. It’s been one of their most successful propaganda projects. It’s also likely gotten a lot of sex workers killed.

It’s the reason Craigslist and Backpage don’t do classifieds for sex workers, because of trafficking scares, removing a relatively safe way to meet clients and moving workers back to more exploitative and dangerous venues.

Anti-trafficking groups have shut down AIDS programs that worked with sex workers and replaced them with abstinence-only programs. They’ve gotten police doing “trafficking raids” that are just giant crackdowns on consensual sex work, sending more sex workers to jail. [...]

Just going to make sure one point of this thread is clear: MasterCard’s rule changes will do nothing to stop sex trafficking. They might have a marginal effect on non-consensual videos in general but overall these rules are about their own liability, not concern for victims.

The end result of the change is it will be harder to sell sexually explicit content online unless you are part of a major player that can afford the costs to meet the new requirements. Indie sex workers will be driven out and larger companies will be more powerful.

Sorry for the long highlight, but the context matters.

I find it infuriating when authoritarians try to impose their views on everyone else, and use real problems (trafficking) to attack legal, consensual adults making their own life-choices. Trying to paint everyone in the space with the same brush when there’s clearly a wide variety just confuses things and stigmatizes those who just want to earn a living.

I have no problem with people having a wide spectrum of opinions about sex in general, and sex work specifically. You think sex is sacred, should only happen after marriage, that pornography is wrong? Fine. Live your life that way.

You think it’s a totally natural top biological urge and is healthy as long as everything is consensual. Fine too.

My problem is when one group tries to impose their views on everybody else. Clearly, there’s no one-size-fits all here, from asexual to polyamorous swingers. It’s a personal thing. Whatever makes you happy without hurting anyone. Trying to force everybody in the same mold is just a recipe for misery for anyone different.

I’m 1,000% in favor of working on problems like human trafficking and non-consensual/abusive situations, but the current situation is making those things worse by pushing sex workers underground and away from safer platforms, and giving more power to shady intermediaries.

The situation isn’t “do we want a perfect world of puppies and rainbows or OnlyFans”, but rather, do we prefer OnlyFans to the situation that we had before online sex work and creator-centered platforms, where women keep the majority of the revenue from their work and are the ones choosing exactly what they’re comfortable with?

This is a bit like saying, “oh, there’s homeless people in the downtown area, some drug users, some violent fights, and even some sexual abuse, let’s shut down the whole downtown, all businesses, even those not involved in any of the problems. That’ll help these people, and I’m sure that it’ll help the homeless, drug users, and abused people if we chase them off that area... poof, they’ll be gone, problem solved.”

Mastercard and Kristof & co are probably doing the exact opposite of what they loudly claim they want, which is to make life harder for a vulnerable group of mostly women.

Congrats on being anti-ESG while doing your virtue-signally, guys (because I’m convinced it’s mostly men doing this). Headlines over results, corporate liability over crushing livelihoods.

I’m sure Mastercard, in its defense, would say something like: “oh no no no, we’re not against legal sex work, we’re just against the bad stuff, which is why we put in place these strict guidelines to protect sex workers.” Nice cover story.

This is a bit like a legislator saying: “we’re not against social media and freedom of expression, we just want everybody to be safe, which is why we wrote this law that mandates that every account be verified, that every tweet and youtube video be reviewed by a human, and that every Twitch livestreams by monitored in real-time, and if there are incidents, we can shut down services at any time, being judge, jury, and executioner.”

It’s a de facto ban, just with massive amounts of hypocrisy layered on top.

Like most moral panics in decades past (remember rock & roll, heavy metal, hip hop, and Dungeon & Dragon hysterias?), it’s about destroying something you don’t like, not about “protecting victims”. There’s parallels with alcohol and drug prohibition too (rather than help those with problems, let’s make their lives worse and give control over to organized crime).

One of the things that bugs me most about this is that because it’s a taboo topic, and an industry that doesn’t have slick lobbyists, large donors, and a get-out-the-vote organization, very few will talk about it even though it’s literally one of the top forms of media in the world.

TikTok Drama, Round Two?

If TikTok drama comes back because of recent CCP moves, and it's forced into a spin-off/separation from Bytedance, I wonder if Microsoft will take another run at it...

Or it may just be too big now even for big tech. Maybe an IPO🤔

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Science & Technology

Cloudflare: Largest DDoS attack ever reported

For perspective on how large this attack was: Cloudflare serves over 25 million HTTP requests per second on average. This refers to the average rate of legitimate traffic in 2021 Q2. So peaking at 17.2 million rps, this attack reached 68% of our Q2 average rps rate of legitimate HTTP traffic.

The attack traffic originated from more than 20,000 bots in 125 countries around the world.

A few weeks before, Cloudflare tracked a botnet attack that peaked at 1.2 Tbps (that’s terabits per second, or 1,200 gigabits/sec)!

More details here.


The Arts & History

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Back to vacation…