How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

Post by crazygringo » Fri, Oct 31, 2025, 2:37 PM UTC

Eisenstein wrote: post #60

crazygringo wrote: post #39

This is such a strange article -- there's nothing particularly unusual going on here. The first example basically stands in for all of them -- Microsoft invests $13B in OpenAI, and OpenAI spends $13B on Azure. This is literally just OpenAI purchasing Microsoft cloud usage with OpenAI's stock rather than its cash . There is nothing unusual, illicit, or deceptive about this. This is entirely normal. You can finance you…

The bubble part is that nvidia is getting revenue from people investing money in their hardware in order to sell something that has not yet been shown to be profitable. If it turns out no one can make enough money selling AI generated data to justify the costs spent on the compute needed to generate it at the current rate, then what nvidia are selling becomes much less valuable, and the whole thing collapses. We have…

Post by wongarsu » Fri, Oct 31, 2025, 2:38 PM UTC

NBJack wrote: post #47

embedding-shape wrote: post #34

Earlier quoted context omitted.

Why is ML knowledge "in the engineers" while chip manufacturing apparently sits in the company/hardware/something else than the engineers/humans?

Read up a bit on the effort needed to get a fab going, and the yield rates. While engineers are crucial in the setup, the fab itself is not as 'fungible' as the employees involved. I can spin up a strong ML team through hiring in probably 6-12 months with the right funding. Building a chip fab and getting it to a sensible yield would take 3-5 years, significantly more funding, strong supply lines, etc.

Post by throwaway106382 » Fri, Oct 31, 2025, 2:39 PM UTC

gtirloni wrote: post #22

rw3 wrote: post #6

Hank green did a vlog on this a few weeks ago and it’s a great explainer.

This one? https://www.youtube.com/watch?v=Vz0oQ0v0W10 This comment is pretty depressing but it seems to be the path we're headed to: > It's bad enough that people think fake videos are real, but they also now think real videos are fake. My channel is all wildlife that I filmed myself in my own yard, and I've had people leaving comments that it's AI, because the lighting is too pretty or the bird is too cute. The real…

Post by afavour » Fri, Oct 31, 2025, 2:39 PM UTC

sergiotapia wrote: post #25

adaisadais wrote: post #21

I’ve been listening to “The Smartest Guys In The Room” (the definitive book on Enron and their scandal) and one of the ways Enron continued to grow and grow is by setting up a really complicated system of moving debt onto equities off of their balance sheet. While it was sorta legal (at the time) it was not ethical and led to a massive collapse of the #1 company at the time. Makes you wonder if AI is in such a bubble…

When the AI bubble pops, what will happen to the software engineering jobs?

Post by trollbridge » Fri, Oct 31, 2025, 2:40 PM UTC

belter wrote: post #58

vmg12 wrote: post #37

Here is a charitable perspective on what's happening: - Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally. - Nvidia instead invests in other companies that use their gpus by providing them deals that must be spent on nvidia products. - This accelerates the growth of these companies, drives further lock in to nvidia's platform, and gives nvidia an equity stake in these com…

> Everything seems to indicate that once the models are trained, they are extremely profitable Some data would reinforce your case. Do you have it? Here is my data point: "You Have No Idea How Screwed OpenAI Actually Is" - https://wlockett.medium.com/you-have-no-idea-how-screwed-ope...