Looks like the beginning of the end of Nvidia's consumer GPU as AI is far more lucrative for them (and AMD is going down the same path). 

A $2000 GPU is soon going to be $5000 according Nvidia and they're cutting production supply of consumer GPUs as gamers are a small minority for them and they don't give a shit about that when they make far more on AI infrastructure. 

Think this is going to lead to a stagnation of PC hardware, most people aren't going to buy these super expensive cards and devs already being killed by dev crunch probably aren't too mad actually. They can just freeze graphics in this range for the next 10 years even and I don't think devs would be worse off. 

What's shadier is there's a lot of reporting out there that Nvidia is going to move to a "rental/cloud" model more and more in the future where you don't actually own a GPU and pay on the go to access a GPU over the internet (so cloud streaming). 

The old PC hardware model looks like it's in big trouble. 

I think GPUs will be hot shit for AI...until they are not anymore, just like it was for cryptos, when ASICs took over.

But indeed, a lot of people will jump to game streaming - it's been in the works for quite a while now, but GeForce NOW is actually that good to finally give viable option of cloud PC to owning actual hardware.

Of course, there is always that thing where there is opening for smaller players to jump in, be it Intel and their discrete GPUs, be it some Chinese GPUs that are developed, or maybe some of the major mobile players, like Qualcomm, entering that market.

Personally, I think this will pass and GPU market will get back on track...well, at least until stable low latency internet connections are widespread in all major markets, when streaming will become to dominate.

I don't think developers can afford a generational leap from this one anyway (as in a traditional graphics), this AI stuff basically hammering the hardware side just makes it more of a slam dunk that people are going to be riding out the hardware they have now possibly for years longer.

Like those Steam hardware charts, you'll probably see a rush for some people to get the current crop of GPUs before the price increase but after the price increase, likely you're going to see not many people buying the 60 series and onwards. Devs will adjust and say "well OK, looks like we're making games primarily for the 20-50 series of cards with our median user having a 30 series maybe" for a long while. 

The play for Nvidia in the long term I think is to basically offer non-local hardware that is rendered non traditionally through AI cores only, but you will not own the hardware for that, you will pay Nvidia to basically rent their GPUs. Maybe some kind of hybrid where hit detection is local on the hardware device (even a smartphone) but the graphics environment is photo-real AI generated and streamed to your device. 

Sounds like my PC will age nicely and maybe increase in value. At a 4090 I am happy. Running most games 4k dlss, high settings and 120 fps. The longer my PC lasts, the better.

Edit

Also built my two daughters PCs before the memory crisis.  5070 and 5070 ti, 32 gb ram for each.  Good timing, they will be good for a long time too. 

Graphics generations are basically fucked. PC going this way pretty much is the death knell. Like I said though the upside is a lot of devs are probably secretly relieved. The sooner they can get off this hamster wheel that was running them into the ground, probably the better, now they can basically make PS5 tier games for a long, long time really.

Is there a reason why they just don't expand their business to meet demand?

Ram is super expensive.  They are not the bottleneck.  AI data centers are eating Ram for breakfast. 

Consoles prices are going to increase as well.  This isn't just a nvidia issue.

Nvidia doesn't make Ram, they source it from third parties and there is a massive shortage.

They don't want to. Gaming is small potatoes business for them (PC GPUs are probably less than 10% of their income) and the RAM/tensor cores being given to gamers pales in comparison to what they can charge AI megacorps. They don't want to waste valuable components on gamers effectively. Their priority is the AI build out, it makes them far more money. AMD is going down the same path. 

Beyond that I think there has been pointed out a probable nefarious side goal as well of not wanting people to own their hardware any longer. You will pay for their AI compute in the future like a cloud subscription without owning the actual hardware. While not the no.1 priority, I think Nvidia and other companies are just fine and dandy with that future. 

This is absolutely great for robots and executives (human robots). Truly a great era for the world. Happy new year!

I think what they will try in the long term future is a new setup of graphics generation, the graphics are no longer polygons/textures but based on AI picture data that AI TMUs build an environment and characters from. For now they're going to basically price people out of physical hardware. 

Maybe only the immediately character you're controlling is rendered and a few enemies is rendered locally on your device.

That environment then is effectively "streamed" to your device allowing for what they'll term as "photorealism". If you have a bad internet connection, you'll get environmental artifacts and lag but the main gameplay should still be alright because it's rendered locally. 

But in this scenario, you no longer own the hardware yourself and have to pay essentially for GPU/TMU usage.

Purists will probably have a shit fit, but it will allow things like smartphones even to have games that look photorealistic "enough".