Patel contrasts traditional data centers with minimal retrofit costs against modern GPU deployments requiring major upgrades each generation.
“it used to be you'd build a data center and there wouldn't really be much retrofits cost, right? You would slide servers in and out, you would rent racks to people.”
Patel states NVIDIA takes 5x markup on manufacturing cost, making power differences more significant for AMD deployments.
“If it's another deployment, if it's AMD, then that that that 20% power difference might translate to eight or 9% TCO difference when you when you talk about power cost and data center capacity cost.”
Patel quantifies 20% power efficiency translates to only 4% TCO difference when NVIDIA takes 5x manufacturing markup.
“if you have enough power, a 20% difference in performance per watt only ends up being a 4% difference in TCO. So, in most cases, don't on an NVIDIA deployment, right?”
Patel finds 10x performance TCO advantage for Blackwell over H100 at certain operating points.
“But at other points, you can have a 10x performance TCO benefit from going with a more expensive Blackwell server than a cheaper H100 server.”
Patel claims NVIDIA takes a 5x markup on manufacturing cost, making power efficiency less significant for TCO.
“So, in most cases, don't on an NVIDIA deployment, right? That's where NVIDIA takes 5x markup on their manufacturing cost, right?”
Patel quantifies that 20% performance per watt advantage translates to only 4% TCO difference on NVIDIA deployments.
“But capital is far more of a limiting factor. Because if you have enough power, a 20% difference in performance per watt only ends up being a 4% difference in TCO.”
Patel calculates 20% power efficiency difference translates to only 4% TCO difference on NVIDIA deployments.
“Because if you have enough power, a 20% difference in performance per watt only ends up being a 4% difference in TCO.”
Patel notes NVIDIA takes 75% margin on hardware comprising most of data center TCO, driving hyperscalers to develop own accelerators.
“So, you mentioned how you're depreciating this asset that's five, six years and this is the majority of the 75% of the TCO data center. And Jensen is taking a 75% margin on that.”