Prediction: This Massive Risk Could Derail Nvidia Stock

Core Insights - Demand for AI chips, especially Nvidia's GPUs, is extremely high, with Nvidia's data center segment generating over $30 billion in revenue in Q3, a nearly tenfold increase from two years ago [1] - The cost of training advanced AI models has skyrocketed, with GPT-4 estimated to cost around $100 million, compared to just a few million for GPT-3, and future models expected to cost around $1 billion [3][2] - There are concerns that AI companies may be reaching a limit in model capabilities, with improvements slowing despite increased data and computational power [5][6] Group 1 - Nvidia's GPUs are in high demand as tech giants invest heavily in AI data centers, leading to significant revenue growth for Nvidia [1] - The financial viability of training extremely expensive AI models is questioned, as the potential for revenue and profit may not match the investment [6] - Nvidia's stock, while having delivered impressive returns, is viewed as risky due to the potential overhype of AI technology and the possibility of a slowdown in growth [7][8] Group 2 - The advancements in AI models, such as those from OpenAI and Alphabet, have come at a substantial cost, raising concerns about the sustainability of such investments [2][3] - The slowing rate of improvement in AI capabilities suggests that the industry may be hitting a ceiling, which could impact future investments and returns [5][6] - Nvidia's market capitalization exceeding $3 trillion raises questions about the long-term growth potential of its stock amidst these challenges [8]