Nvidia kicks crypto: ‘doesn’t bring anything useful to society’ AI does it’
Nvidia has been both benefactor and victim of the cryptocurrency boom/bust cycle. When the crypto’s value skyrocketed, so did Nvidia’s stock price. When the crypto crashed, Nvidia’s stock price often fell with it. The company makes a product that has long been crucial to the functioning of many of the world’s biggest cryptocurrencies outside of bitcoin, and it has been both a blessing and a curse.
Nvidia and crypto are a love/hate relationship. When all was well, Nvidia would happily create entire product lines for the sole purpose of running algorithms to “mine” cryptocurrency, known as CMP or Cryptocurrency Mining Processor. (opens in a new tab). However, when the crypto crashed, which it tends to do, Nvidia would often be lumped in with excess inventory. (opens in a new tab) graphics cards and finding new ways to sell them.
It’s clear that Nvidia is in the hate stage of its relationship right now, according to recent comments from The Guardian (opens in a new tab) by Nvidia’s CTO on the value of cryptocurrency to society.
“All this crypto stuff, it needed parallel processing, and [Nvidia] is the best, so people just programmed it to use it for that purpose. They bought a lot of things, then finally it collapsed, because it doesn’t bring anything useful to society. AI does it,” said Nvidia CTO Michael Kagan.
It’s no surprise that Nvidia wants to position itself as the preeminent AI company, but I didn’t expect the company to outright slam cryptocurrency in the process. Kagan’s comments, however, touch on a debate that has been raging for some time over whether cryptocurrency is a valid alternative to fiat currency or more of a tool for generating profits. So far we have seen many examples of the latter, and little evidence of the former.
“I never believed that [crypto] is something that will do something good for humanity,” Kagan continued. “You know, people do crazy things, but they buy your stuff, you sell them stuff. But you’re not redirecting the company to support anything.”
Nvidia was inclined to downplay the role cryptocurrency played in the increased demand for graphics cards in recent years, which, combined with supply chain issues, has led to graphics card shortages around the world. Nvidia has even attempted to block cryptocurrency mining on its GeForce GPUs, although this is not considered a very effective anti-mining measure. (opens in a new tab).
However, cryptocurrency mining is no longer a major driver of GPU sales and may possibly remain so for good.
Ethereum was the main cryptocurrency driving the demand for graphics cards in recent years and the crypto boom before that, which happened around 2017/18. For both booms, Ethereum relied on a proof-of-work concept, which required massive computing power driven by graphics cards to mine Ether, the currency of the platform. Since September 2022, Ethereum has been using a Proof-of-Stake concept (opens in a new tab)which no longer requires graphics cards to operate.
So far, no other cryptocurrency has risen enough to drive such high demand for graphics cards again. It’s possible that will happen, but we haven’t seen it yet. For the love of the environment, let’s hope it doesn’t.
Meanwhile, people are clamoring to get their hands on Nvidia GPUs for use with AI applications. Nvidia powers many of today’s most popular AI applications, including OpenAI’s ChatGPT and Stable Diffusion, and more are on the way. At GTC, the company’s developer conference, it was announced that Oracle, Meta, Amazon and Microsoft recently invested in Nvidia’s H100 GPUs to “meet the growing demand for AI training and inference generative”.
It all sounds like Nvidia is looking to move on from crypto in a big way.
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