A la Enron but completely legal. It is not just a circle, it is more like a swirl. Wallstreet invested in Ai Farms to purchase NVDA chips and then NVDA invested in Ai Farms and not only that it is investing in its customer, Anthropic and its IPO.. They are recycling the cash that they harvest from stock markets till it becomes the famous singularity in funding like a financial hurricane.
Wut? Enron was literally shutting down energy grids in one location to spike prices in another. Way way way more to Enron story than financing to begin with.
Enron comparisons folks are making is about why they failed, not why they made a lot of money. They ultimately failed for reasons scarily similar to what’s going on now across the industry with special purpose vehicles and off balance sheet liabilities.
The mechanics are legal but the objective is the same which is buy your own output by manufacturing a demand. I am sure they can buy good lawyers to keep it completely legal.
Vendor financing[1] has a long and successful history. Here's a good WSJ article from 2001 about the practice and risks[2], written after the DotCom crash in March 2000.
There is nothing illicit or illegal in anyway about what NVidia is doing. It's reasonable business practice, and people on HN are simply ignorant to think otherwise.
NVidia is very aware of the risks it entails, but has the money to cover those risks.
A big problem in discussions about Nvidia is that people can't distinguish between:
1. The equity investments Nvidia has made in its customers.
2. The guarantees/backstops it has extended to some of its customers.
3. Vendor financing.
The vendor financing is the least interesting of the bunch. Nvidia has already disclosed that when it provides vendor financing, the average customer pays in less than 60 days. These are not long-term financing arrangements and virtually every big company sells on these type of terms (net-30, net-60, etc.).
The equity investments and guarantees are where there is room for legitimate debate.
> equity investments and guarantees are where there is room for legitimate debate
The guarantees dwarf the investments. If there is a shenanigan, it's going to be there.
The problem is the line between the guarantees and traditional vendor financing is blurry–one could argue use commitments are no different from repurchase commitments.
Their implication ("A la Enron", "they can buy good lawyers to keep it completely legal") that there is something illicit or wrong in what NVidia is doing.
The OP clearly is implying that it should be illegal for some reason. This is wrong - not only is it nothing like Enron (!?) but it's a great way for both NVidia and the companies building on them to build what they want.
Enron was illegal but also a sham. The point is we have no evidence Nvidia's financing is a sham. It could be. And if it is, it's a huge problem. But the shammiest parts of what Enron did do not apply to Nvidia, which makes the comparison a bit like saying OP is Hannibal Lecter but legal while glossing over the fact that OP never murdered anyone but once drank red wine.
Not a lot of people were clamoring for copilot in their outlook. But NVIDIA are giving money to labs so that they will buy their hardware. Manufacturing demand for their hardware, which is used for more AI, which eager PMs stuff into every crevice they can find and call demand.
ChatGPT was the fastest growing software of all time not that long ago. Citing a bad AI product as evidence for lack of demand is saying the failure of the Homer car was due to the fact that people don't like automobiles.
> ChatGPT was the fastest growing software of all time not that long ago.
Google+ was the fastest-growing social network of all time not that long ago.
When you're one of a pair of VC darlings that have effectively-infinite money because of -in part- handwavy promises to cure cancer and eliminate 90% of payroll everywhere, or if you're an established company that has total control over very widely used consumer products, you can do all sorts of things to manufacture amazing growth numbers.
In the case of those VC darlings, we're seeing their shift towards providing their products that are most expensive to create exclusively to B2B customers and also the shift towards justifying the elimination of most of their R&D expenditure. Every company performs belt-tightening in advance of their IPO, [0] and those two are no exception.
[0] ...which is when their finances will be scrutinized by the public and regulators...
> Investing in your customer, what is that if it is not buying demand
It can be manufacturing demand that wouldn't otherwise exist. It can be facilitating demand to come online sooner and smoother. You can't tell which it is by only looking at the transaction; you need to know how many dollars are going into the ecosystem as a whole for purchases of goods and services. Until Anthropic's S-1 lands tomorrow-ish, we won't have that publicly.
> mechanics are legal but the objective is the same which is buy your own output by manufacturing a demand
Eh, I think it's an open question whether OpenAI and Anthropic would be buying GPUs like they are with or without Nvidia's financing. Financing customers' purchases isn't proof per se of demand creation versus demand inducement. Anyone who claims they've seen a certain fact in these financings is deluded or lying.
The Ai companies are not really profitable now so they need cash incoming from the skies to grow even more and they are still losing money. Ai farms and much of Ai software world are money sucking machines with assumed profit in future. Their P/E is assumed to be positive in future but it isn't now. The hardware suppliers are making the real money now from the AI hardware pipeline and NVDA is pretty much the center of hardware pipeline sucking most of the cash. In my opinion NVDA knows that the profits from AI have to flow from Ai software to keep the music playing and that it has a lot of competition incoming and so it is funding its customers and buying its own output to circulate the cash towards itself to make as much money as possible now. It has no other choice in reality.
Their assets are depreciating faster than they can pay it off and that means that the profits are pretty much a temporary illusion in my opinion that is because the so called ai chips have short lifespans and don't age gracefully. What happens when you buy a car and say use it for delivery for income for example and then the engine dies. You have to buy a new car and pay for the old one as well.
Within the whole industry (beyond Nvidia) this is starting to look a lot more and more like Enron. It does appear “legal” but the special purposes vehicles and off balance sheet commitments are having the same net effect. Convincing everyone things are fine while hoping they don’t notice the massive liabilities building up that are kept out of reporting.
If you haven’t read “Smartest guys in the room” it’s important reading now as it’s scary similar to what’s going on now across AI. Nobody has alleged anything illegal but the net effect on building a house of cards in the AI bubble can be the same.
And that gap in where people are watching (AI company press releases or the creative accounting going on) explains why those watching this are saying “oh no, we’ve seen this movie before” when others are blinding all rah rah about the AI bubble going on forever.
Which is a fundamental difference. When Apple extends me credit to buy an iPhone, that isn't circular financing in a problematic way. I was buying the phone anyway, the financing just made it easier.
It's still questionable. Similar to car manufacturers or IKEA, who all have their own banks, Apple has an incentive to hand out credit to people who should not get it, increasing the likelihood of people getting underwater with their debt.
Generally, the fact that most non-Boomer people simply don't have the means to even save up for basic consumer goods like cars, furniture or a phone but have to go into debt instead is scary. Our entire economy has become a house of cards.
Oh hell yeah. But a lot of folks are treating the existence of customer financing as damning per se. The scale is daunting. But the scale of the entire AI enterprise is massive.
I've also seen zero evidence that Nvidia is extending this credit to related parties to put in sham orders
Have you bothered to look at the finances of Nvidia's AI clients?
None of them are making any money. They're borrowing money they don't have in oder to buy from Nvidia. And now some of this money is coming from Nvidia itself.
In a round about way, Nvidia is buying it's own product.
It's pretty clear that this sort of thing can't continue indefinitely --- just like any Ponzi scheme.
All the "frontier" AI vendors are borrowing money to invest in AI (and buy from Nvidia). None of these Nvidia customers are actually making money from it.
Anthropic and OpenAI are two cash burning machines that Nvidia has invested billions into --- so they can continue buying from Nvidia.
Bottom line: A lot (if not most) of Nvidia's cash flow is borrowed money --- and some of it is borrowed from Nvidia itself.
Some of it isn't even "cash flow". It's contract futures being counted as cash flow --- a la Enron accounting.
Where are those 99$ coming from? Who is actually paying this money? Because it seems like so far everybody is losing money with no reversal of this trend in sight
If this isn't a house of cards, AI companies' customers. The companies and individauls ponying up for a Claude subscription or compute through OpenRouter.
Customer financing isn't inherently fucked. It's just highly suspect at the scale Nvidia's doing it. There was another thread where I noted that Nvidia's investments are literally monetarily significant, to the point that I expect them to start being directly referenced in the Fed's beige book [1].
And this is the actual problem. I can't see framing it as a ratio as anything other than an attempt to mislead. What do you predict will happen when the market deflates? Whether or not a segment will behave like a line of dominoes and catastrophically implode is the question.
As I understand it they are risking that even if the major AI labs fail all the compute capacity that's been built out will remain in demand at sufficiently high prices.
> Where are those 99$ coming from? Who is actually paying this money?
Companies who pay 99$ to make >99$ in return. I am not saying it works in all cases but that's the idea when a company spends money.
> Because it seems like so far everybody is losing money with no reversal of this trend in sight
I am not sure what you are seeing: Anthropic (as one of only two major companies that do just AI) is starting to return profits, while demand for AI is accelerating and, clearly, compute is maxed out. And I mean: On the entire planet. They are turning profits despite everything being in full buildout mode.
You, when their circular financing scheme fails and you're the one left holding the bag as your government says "they're too important to let them fail".
The current valuations are only inflated until they're not. Especially if the big American labs can convince the US government to work out a joint "AI non-proliferation" agreement with China which will allow both countries to essentially carve up and techno-colonize the rest of the world without any other competition except between themselves.
We're already seeing signs of this strategy from Open AI and Anthropic warning about the dangers of AI and the need for safety regulations. None of that stuff matters if China is not also on board with it.
> The current valuations are only inflated until they're not
You could say that about any historically inflated valuation all the way back to the tulip mania. Either the expected profit materializes or it doesn't.
> We're already seeing signs of this strategy from Open AI and Anthropic warning about the dangers of AI and the need for safety regulations
I would read this as a desire to pause training to be able to present a profit in anticipation of the IPO. The major AI labs mad scramble to IPO is if anything a sign that they aren't at all confident in the valuation. If they were they would be no hurry to cash out.
This month I spent $50 on OpenRouter credits. I find it very useful for coding assistance (not coding per se). It's $50 that I never spent before on this kind of service. That's what we call growth - it quite literally came out of nowhere.
This month I reduced my spend on cloud AI and started using local models as primary - it's maybe 2 or 4 times slower for some things but it still is getting the job done just fine. I talked to a friend of mine who's been doing the same running smaller Qwen models locally for coding.
Your $50 isn't enough to sustain trillions of dollars in CapEx investments. This investment cycle - at this scale - only makes sense if within the next 5 years AI replaces something crazy like 5-10% of jobs, if not more. Not changes, replaces completely.
It's the marketing they were doing all the time that AI will replace developers and other jobs, then the companies started this bullshit firing thousands of people without really thinking through. It's more sane to advertise that AI will augment us and I guess if they followed this path a more sustainable growth is expected to happen!
Well, it is. Thermodynamics. Earth is pretty much a closed system, except for the sun.
So for example if you invest $100 in a farm and get a return of 10%, where does that come from? The nutrients in the soil, the effort expended by the workers, and the power of the sun to turn seeds into food. All value comes either from finite resources in the ground (nuclear, oil, ...), from solar power, or from human effort (work, innovations, etc.)
So can you trace back Nvidia's incredible 10000% return on investment to any of these sources? Which ones?
I first read that "every $1T brings back $100", thinking, wow, is it THAT bad?
No, it's very unlikely at this point every $1 Nvidia invests brings back $100. Stating something like that is almost a red flag that things are overheating.
But even that isn't really true since Nvidia P/E was unreasonably high even 4 years ago. So how is this not lying to investors (a thing that is illegal)?
They also said that theur hardware scales faster than Moore's law, when in reality it is way slower than Moore's law. Which I guess at least is a good thing for hyperscalars because it helps with their decision to write off their GPUs over a much longer period.
But still, it seems that billionaires are lying left and right. It isn't just Elon.
It is a bit circular but it also a growing real market. NVIDIA is accelerating the market and also making money. It is a smart strategy on their part.
We are not at the top of this trend yet so I do not see this as over investment.
I remember the criticism Microsoft got for investing in Facebook/Meta that gave them a whooping $15B valuation and getting 1.7% in 2007. Not all deals will turn out that prescient but a few will and make up for any duds. This is a real market.
I think it’s safe to venture into science fiction futures at this point. We have AI and government mass surveillance technology. We’re living in science fiction futures.
I don't know about $100 back ... but their profit margin is $0.90 on the gpu that is bought with the $1 they lend / swap for equity + they get ongoing interest / equity stake.
I spent a few hours trying to run all the numbers myself from first principles (e.g. sum of all American salaries is 11.7T, plus international), to see what I could come up with.
What I came up with was Nvidia is maybe slightly overpriced currently, but a bad stock to buy or hold onto because the risk of it shrinking is significantly higher than the risk of it ever doubling again (and it trades at a tech/growth multiple). The case is far worse for Anthropic/OpenAI who, at current pricing, capture such a tiny slice of the pie it's hard to see how they will stay in business long term.
So if they just had spare 100 billion they could make 10 trillion? Sounds reasonable and plausible right? Sadly market manipulation is not being prosecuted.
They are definitely in NVIDIA’s own rooms! It’s like, they invest $1 in AI companies, that pay back NVIDIA $100 for GPUs. If you draw the lines you will see something that looks a bit like an ellipse. Or maybe a boomerang path. Or like, a 2d sphere. A bit frustrating we don’t have a simpler word for such a shape
Because it isn't a simple loan, and the value of the equipment itself as collateral is highly doubtful anyways.
Nvidia is investing in their customers by buying their stock. Nvidia is directly buying compute from their customers. Nvidia is making "if you can't find a customer, we'll take all of your capacity" deals. Nvidia is making a ton of fake huge-number deals which are supposed to be realized over time but most likely never will.
They are doing everything they can to make that customer look like a healthy and valuable business which everyone should invest in and loan money to - which in turn flows directly back to Nvidia to buy GPUs and boost their revenue. They are essentially creating sockpuppets to keep external money flowing in so they can keep the money printer running.
Yes, it seems very possible to me that Nvidia makes a lot of money. They are literally the largest company in the world.
Who pays? Only all the companies, desperately raising as much capital as possible, issuing new stock to do it, going for unprecedented investment rounds, burning cash reserves to fund the largest data centre rollout in history.
Who builds the things that go into said datacenters? The thing that has also raised in price dramatically in recent years?
It is always about scale. At scale today's Nvidia does anything is so big that 100x is not anymore reasonable. Or then it is not significant...
From sub million to hundreds of millions I could theoretically see. Even tens of millions to billions. And even then I would be extremely skeptical.
But with Nvidia we are talking somewhere in the scale at tens or hundreds of billions. And that is actually very large sums of money. Even if it often does not look like it.
In a very narrow sense it may be true that Nvidia expects to make some multiple of the money invested (unlikely to be 100x but whatever). But you can't talk about that without talking about the wider economy. If the wider economy, and especially the pension funds putting money into the scheme, cannot sustain this, it'll eventually collapse and then everyone including Nvidia will lose lots and lots of money.
The only metric by which they are the largest company in the world is valuation. There are thousands of companies more important to your daily existence than Jensen's leather jacket factory.
They are also talking out of their asses, as they are massively overselling their capacity, and everyone is on a 5 to 10 year backlog.
who is going to pay back the money nVidia invests in AI labs, AI datacenter companies if the models are being served dirt cheap.
the Chinese are not the only competitor - Amazon with their Trainium, Google with their TPUs etc.
Nvidia might have a moat on training but on serving it's gonna be a blood bath.
But for now they're capturing 80% of all the AI spend so they gonna keep making money.
Not everything is an Enron
You could make an argument that maybe this is similar to oracle (I think?) in the com bubble financing networking gear to customers.
I still think that misses the mark since the customers using hardware are have demand for computer by their customers.
Kind of reminds me of the current lack of supply of GPUs and ram to consumers.
Nvidia's financing is disclosed. Enron lied about its schemes.
I've also seen zero evidence that Nvidia is extending this credit to related parties to put in sham orders–that was part of Enron's shtick, too.
There is nothing illicit or illegal in anyway about what NVidia is doing. It's reasonable business practice, and people on HN are simply ignorant to think otherwise.
NVidia is very aware of the risks it entails, but has the money to cover those risks.
[1] https://en.wikipedia.org/wiki/Vendor_finance
[2] https://archive.is/mOIfg
1. The equity investments Nvidia has made in its customers.
2. The guarantees/backstops it has extended to some of its customers.
3. Vendor financing.
The vendor financing is the least interesting of the bunch. Nvidia has already disclosed that when it provides vendor financing, the average customer pays in less than 60 days. These are not long-term financing arrangements and virtually every big company sells on these type of terms (net-30, net-60, etc.).
The equity investments and guarantees are where there is room for legitimate debate.
The guarantees dwarf the investments. If there is a shenanigan, it's going to be there.
The problem is the line between the guarantees and traditional vendor financing is blurry–one could argue use commitments are no different from repurchase commitments.
Which is exactly the point of the person you're responding to. What part of “but completely legal” isn't clear enough?
The OP clearly is implying that it should be illegal for some reason. This is wrong - not only is it nothing like Enron (!?) but it's a great way for both NVidia and the companies building on them to build what they want.
(Also note that illegal != illicit.)
I wish we still lived in an age where things were sold to cover their costs.
My money's on their product having 10% of its current user base if they charged 50 cents per month.
Google+ was the fastest-growing social network of all time not that long ago.
When you're one of a pair of VC darlings that have effectively-infinite money because of -in part- handwavy promises to cure cancer and eliminate 90% of payroll everywhere, or if you're an established company that has total control over very widely used consumer products, you can do all sorts of things to manufacture amazing growth numbers.
In the case of those VC darlings, we're seeing their shift towards providing their products that are most expensive to create exclusively to B2B customers and also the shift towards justifying the elimination of most of their R&D expenditure. Every company performs belt-tightening in advance of their IPO, [0] and those two are no exception.
[0] ...which is when their finances will be scrutinized by the public and regulators...
It can be manufacturing demand that wouldn't otherwise exist. It can be facilitating demand to come online sooner and smoother. You can't tell which it is by only looking at the transaction; you need to know how many dollars are going into the ecosystem as a whole for purchases of goods and services. Until Anthropic's S-1 lands tomorrow-ish, we won't have that publicly.
Do you mean economies of scale?
I'd argue that in this case, if the flywheel never reaches critical velocity, they are manufacturing demand.
Eh, I think it's an open question whether OpenAI and Anthropic would be buying GPUs like they are with or without Nvidia's financing. Financing customers' purchases isn't proof per se of demand creation versus demand inducement. Anyone who claims they've seen a certain fact in these financings is deluded or lying.
You need to be more specific, because there are absolutely sections of the AI economy that are clearly and presently profitable.
> Ai farms and much of Ai software world are money sucking machines
If AI farms refers to datacenters, plenty of existing ones are currently profitable.
Whose assets? Where are you getting this from to be able to state it with this level of certainty?
But here a reference; https://www.tomshardware.com/pc-components/gpus/datacenter-g...
If you haven’t read “Smartest guys in the room” it’s important reading now as it’s scary similar to what’s going on now across AI. Nobody has alleged anything illegal but the net effect on building a house of cards in the AI bubble can be the same.
And that gap in where people are watching (AI company press releases or the creative accounting going on) explains why those watching this are saying “oh no, we’ve seen this movie before” when others are blinding all rah rah about the AI bubble going on forever.
Which is a fundamental difference. When Apple extends me credit to buy an iPhone, that isn't circular financing in a problematic way. I was buying the phone anyway, the financing just made it easier.
Generally, the fact that most non-Boomer people simply don't have the means to even save up for basic consumer goods like cars, furniture or a phone but have to go into debt instead is scary. Our entire economy has become a house of cards.
Oh hell yeah. But a lot of folks are treating the existence of customer financing as damning per se. The scale is daunting. But the scale of the entire AI enterprise is massive.
Yes --- and the scale of the money being set on fire is epic. And if/when the burning comes to a screeching halt, the resulting crash wil be likewise.
Have you bothered to look at the finances of Nvidia's AI clients?
None of them are making any money. They're borrowing money they don't have in oder to buy from Nvidia. And now some of this money is coming from Nvidia itself.
In a round about way, Nvidia is buying it's own product.
It's pretty clear that this sort of thing can't continue indefinitely --- just like any Ponzi scheme.
Who are you thinking of? Because yes, I have, and they're not in line with the YouTube influencer consensus.
All the "frontier" AI vendors are borrowing money to invest in AI (and buy from Nvidia). None of these Nvidia customers are actually making money from it.
Anthropic and OpenAI are two cash burning machines that Nvidia has invested billions into --- so they can continue buying from Nvidia.
Bottom line: A lot (if not most) of Nvidia's cash flow is borrowed money --- and some of it is borrowed from Nvidia itself.
Some of it isn't even "cash flow". It's contract futures being counted as cash flow --- a la Enron accounting.
If this isn't a house of cards, AI companies' customers. The companies and individauls ponying up for a Claude subscription or compute through OpenRouter.
Customer financing isn't inherently fucked. It's just highly suspect at the scale Nvidia's doing it. There was another thread where I noted that Nvidia's investments are literally monetarily significant, to the point that I expect them to start being directly referenced in the Fed's beige book [1].
[1] https://news.ycombinator.com/item?id=49673871
As I understand it they are risking that even if the major AI labs fail all the compute capacity that's been built out will remain in demand at sufficiently high prices.
Companies who pay 99$ to make >99$ in return. I am not saying it works in all cases but that's the idea when a company spends money.
> Because it seems like so far everybody is losing money with no reversal of this trend in sight
I am not sure what you are seeing: Anthropic (as one of only two major companies that do just AI) is starting to return profits, while demand for AI is accelerating and, clearly, compute is maxed out. And I mean: On the entire planet. They are turning profits despite everything being in full buildout mode.
You, when their circular financing scheme fails and you're the one left holding the bag as your government says "they're too important to let them fail".
We're already seeing signs of this strategy from Open AI and Anthropic warning about the dangers of AI and the need for safety regulations. None of that stuff matters if China is not also on board with it.
You could say that about any historically inflated valuation all the way back to the tulip mania. Either the expected profit materializes or it doesn't.
> We're already seeing signs of this strategy from Open AI and Anthropic warning about the dangers of AI and the need for safety regulations
I would read this as a desire to pause training to be able to present a profit in anticipation of the IPO. The major AI labs mad scramble to IPO is if anything a sign that they aren't at all confident in the valuation. If they were they would be no hurry to cash out.
And I'd argue the timer started in 2023.
So for example if you invest $100 in a farm and get a return of 10%, where does that come from? The nutrients in the soil, the effort expended by the workers, and the power of the sun to turn seeds into food. All value comes either from finite resources in the ground (nuclear, oil, ...), from solar power, or from human effort (work, innovations, etc.)
So can you trace back Nvidia's incredible 10000% return on investment to any of these sources? Which ones?
Value also comes from technology which you seem to suspiciously remove
Surprised basic stuff is now being questioned.
No, it's very unlikely at this point every $1 Nvidia invests brings back $100. Stating something like that is almost a red flag that things are overheating.
But still, it seems that billionaires are lying left and right. It isn't just Elon.
seems no one is reading the article..
We are not at the top of this trend yet so I do not see this as over investment.
I remember the criticism Microsoft got for investing in Facebook/Meta that gave them a whooping $15B valuation and getting 1.7% in 2007. Not all deals will turn out that prescient but a few will and make up for any duds. This is a real market.
No, it's a high risk gamble.
If the market grows enough they will win the bet, but if the market doesn't or we get a recession that dries up capital they will be holding the bag.
So for this to become true there are some number of jobs that that pay $N salary are replaced completely by LLMs that do the job for $N-0.01?
Is that what you mean by "market grows enough"
Even in a recession I think the shift towards AI would just accelerate since it is usually cheaper than humans.
The real risk I feel if what if AI is too successful and there is a lack of human demand because of dropping wages/employment?
(Then I wonder if sentient robot demand will make up for it? Although I realize that veers into science fiction futures.)
And then the following trend will be humanoids and similar and they are barely getting started.
Its a mighty fine deal for Nvidia
What I came up with was Nvidia is maybe slightly overpriced currently, but a bad stock to buy or hold onto because the risk of it shrinking is significantly higher than the risk of it ever doubling again (and it trades at a tech/growth multiple). The case is far worse for Anthropic/OpenAI who, at current pricing, capture such a tiny slice of the pie it's hard to see how they will stay in business long term.
https://www.marginalia.nu/junk/financing.png
From the article:
> I put in one, and a hundred comes back.”
> The figure was rhetorical, not a disclosed 100-times investment return.
There's a lot more words in there, but it doesn't seem to say anything else.
Nvidia is investing in their customers by buying their stock. Nvidia is directly buying compute from their customers. Nvidia is making "if you can't find a customer, we'll take all of your capacity" deals. Nvidia is making a ton of fake huge-number deals which are supposed to be realized over time but most likely never will.
They are doing everything they can to make that customer look like a healthy and valuable business which everyone should invest in and loan money to - which in turn flows directly back to Nvidia to buy GPUs and boost their revenue. They are essentially creating sockpuppets to keep external money flowing in so they can keep the money printer running.
When I zoom out to 5 years, it does not look like "keeps falling".
But its quite obvious that while there are some similarities its simply not the same. Most analysis, so it seems, are quite surface.
Are there any deeper finical analysis on the investments of Nvidia and how they are financed?
Yes, it seems very possible to me that Nvidia makes a lot of money. They are literally the largest company in the world.
Who pays? Only all the companies, desperately raising as much capital as possible, issuing new stock to do it, going for unprecedented investment rounds, burning cash reserves to fund the largest data centre rollout in history.
Who builds the things that go into said datacenters? The thing that has also raised in price dramatically in recent years?
From sub million to hundreds of millions I could theoretically see. Even tens of millions to billions. And even then I would be extremely skeptical.
But with Nvidia we are talking somewhere in the scale at tens or hundreds of billions. And that is actually very large sums of money. Even if it often does not look like it.
They are also talking out of their asses, as they are massively overselling their capacity, and everyone is on a 5 to 10 year backlog.
--- Bernie Madoff
My name is Charles Ponzi and I approve of this message.
Your salaries if AI works (and takes your jobs), and your taxes if it doesn’t (bubble bursts, your taxes bail them out Becasue it’s too big to fail).
Mega eyeroll
God heavens. It's worse than 2000/2001!
Gotta start selling my portfolio