Nvidia is now worth $102M per employee
Nvidia is now worth $102M per employee
Nvidia’s run has been so remarkable that the market now believes the company is worth more than $100 million per employee....
"...For Nvidia, after this latest run-up took it north of the $3T milestone, the company is being valued at more than $100M for each of its 29,600 employees (per its filing that counted up to the end of Jan 2024).
That’s more than 5x any of its big tech peers, and hundreds of times higher than more labor-intensive companies like Walmart and Amazon. It is worth noting that Nvidia has very likely done some hiring since the end of January — I think the company might be in growth mode — but even if the HR department has been working non-stop, Nvidia will still be a major outlier on this simple measure.
We are running out of ways to describe Nvidia’s recent run... but a nine-figure valuation per employee is a new one."
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"Are the employees gonna see a cent of this?"
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"Fuck, no!"
Well, they technically will see SOME cents of this because I'm pretty sure Nvidia gives employees stocks too.
But yeah, I also posted this because it's a clear illustration of how most salaries will never reflect the value your labour brings to an organization.
Or more accurately, it's a clear illustration of how overvalued they are right now.
But as the saying goes, the market can remain irrational longer than you can remain solvent.
I don’t think many people would claim overall valuation has much of anything to do with the value labor brings to an organization.
In this case I think all it indicates is just how much the company’s stock price is driven by speculation about possible demand for generative AI, and even then I’m not sure that current price per share times number of shares divided by number of employees is a clear indication of that.
I’ll just leave this here.
https://www.businessinsider.com/nvidia-employees-rich-happy-problem-insiders-say-2023-12
Brilliant, thanks for this!
I said in a comment on mastodon that I don't think the batch of newer employees hired at Nvidia are going to have anywhere near the same compensation as the current employees do, and this kind of helps support my suspicions...
Which could lead to a morale problem in the company too (speaking from experience)
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In Nvidia's case that's actually true for long tenured employees - assuming they cash out before the bubble bursts.
I can't imagine most Nvidia employees don't make enough to become millionaires within like 5-10 years if they aren't already. Their entry-level software engineering positions have a base pay of $147K and total compensation of $180K. The lowest paying level of senior engineers gets more like $300K... Even the ones who leave before then are highly likely to get a job with comparable pay or benefits considering they have Nvidia on their resumé.
Now, tens-of-millions-aires, I don't think most employees get there.
Layoffs imminent
The great thing about the stock market compared to other investments like crypto is that stocks are based on the inherent value of the business they represent. Stocks are based on financial fundamentals. You can believe in those investments because they are based on something real and not simply rampant speculation. For example.
Tesla. Worth more than most of the rest of the car market combined because... reasons?
Paypal. Lost 80% of its value starting in July 2021 over a year and never recovered because of terrible problems? Huge losses? Nope, because it "only" grew at 8-9%.
2008 US housing rated as "AAA" investment i.e. "good as cash" based on actual trash.
In the long term it works quite a bit better as a valuation tool. Bubbles tend to not last very long.
This is definitely realistic and not an over valuation based on AI-hype investor brain rot. Like, they’re a fucking graphics card company. Like, sure graphics cards can do some cool linear algebra, and linear algebra can do some cool things… but I’m sorry, they’re not going to be earning as much as Apple or Microsoft, companies that sell the whole rest of the computer to people and/or the plurality of software that runs on it.
Technically, they don’t even make the actual graphics cards, they just design them and then outsource manufacturing to TSMC.
But don’t you know that doesn’t matter, because by 2028 every singe company in the world is going to need a data center filled with tens of thousands of AI accelerators turning their own scrape of the internet into a chatbot, and so one of the companies that makes thouse accelerators is definitely going to have as much business as companies that make half of everyone’s phones or computer software./s
Designing graphic cards is really fucking hard though plus they make the firmware.
Are they gonna pay them out? /s
Every employee could create their own companies and products. Opportunities and diversification!
Alternatively, each and every one of them can make 101 millionaires and still be a millionaire themselves!
Are they gonna pay them out? /s
Most Nvidia employees are paid in company stock. They have made millions in the last year.
= AI bubble
AI is certainly a bubble but Nvidia has been working on this stuff long before the hype. I don't think you can easily dismiss them. Personally I don't think the future of AI is giant data centres, it will be running in desktops GPUs and dedicated AI chips. It already is.
It will be both. AI local and AI cloud.
For the average person every day use AI will be local on device. But companies with massive data sets will be processed with a data center.
Damn, those employees can buy they own yachts! Must be nice!
/s