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NVIDIA frenemy relation with OpenAI and Oracle

philippeoger.com

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Re: NVIDIA frenemy relation with OpenAI and Oracle

#31

Post by mewpmewp2 »

mvkel wrote: post #16
kart23 wrote: post #3

The critiques of 'circular funding' don't really make sense to me. If you invest 20 billion and you get back 20 billion, your profit is the same. Sure your revenues look higher but investors have access to all that information and should be taking that into account, just like all the other financial data. Michael Burry is betting against AI growth translating into real profits as a whole, not the circular funding.

The problem is that stocks are often valued and traded on revenue growth, not profit[0] So circular funding generates stock price bumps when, as you said, there's no inherent value underneath. Creates a recipe for a crash. [0] consider pagerduty, incredibly profitable with little revenue growth. Trading at 1.5X revenue, where high revenue growth, unprofitable companies are trading at 10X revenue.

Both are taken into account. Potential profitability is taken into account with growth companies. Circular funding has no effect on that. With unprofitable companies case is made on how risky the company is and what the potential profit will be in the future.

Re: NVIDIA frenemy relation with OpenAI and Oracle

#32

Post by buzzin_ »

kart23 wrote: post #3

The critiques of 'circular funding' don't really make sense to me. If you invest 20 billion and you get back 20 billion, your profit is the same. Sure your revenues look higher but investors have access to all that information and should be taking that into account, just like all the other financial data. Michael Burry is betting against AI growth translating into real profits as a whole, not the circular funding.

It's worse than that. One side of the "circle" is 40 billion, the other side is 300. Why not just subtract it, and say 260 billion is going one way.

The real story is that Nvidia is accepting equity in their customers as a payment for their hardware. "What, you don't have cash to buy our chips? That's OK, you can pay by giving us 10% of everything you earn in perpetuity."

This has happened before, let's call it the "selling the goose that lays golden eggs scan." You can buy our machine that converts electricity into cash, but we will only take preorders, after all it is such a good deal. Then, after bulding the machines with the said preorder money, they of course plugged the machines in themselves instead of shipping them, claiming various "delays" in production. Here I'm talking about the bitcoin mining hardware when the said hardware first appeared.

Nvidia is doing similar thing, just instead of doing it 100% themselves, they are 10% in by acquiring the equity in their customers.

Re: NVIDIA frenemy relation with OpenAI and Oracle

#33

Post by zozbot234 »

jsheard wrote: post #23
gchadwick wrote: post #15

> However, Groq’s architecture relies on SRAM (Static RAM). Since SRAM is typically built in logic fabs (like TSMC) alongside the processors themselves, it theoretically shouldn't face the same supply chain crunch as HBM. It's true SRAM comes with your logic, you get a TSMC N3 (or N6 or whatever) wafer, you got SRAM. Unfortunately SRAM just doesn't have the capacity you have to augment with DRAM which you see compani…

SRAM scaling also hit a wall a while ago, so you can't really count on new processes allowing for significantly higher density in the future. That's more of a longer-term issue with the SRAM gambit that'll come into play after the DRAM shortage is over though - logic and DRAM will keep improving while SRAM probably stays more or less where it is now.

You can still scale SRAM by stacking it in 3D layers, similar to the common approach now used with NAND flash. I think HBM DRAM is also directly stacked on-die to begin with, apparently that's the best approach to scaling memory bandwidth too.

It'll be interesting to see if we get any kind of non-NAND persistent memory in the near future, that might beat some performance metrics of both DRAM and NAND flash.

Re: NVIDIA frenemy relation with OpenAI and Oracle

#35

Post by altairprime »

nelox wrote: post #26

[flagged]

Given that not all information is public in this scenario, there is no choice but to construct theories that are plausible regardless of the gaps in evidence; such is the basic nature of investing and economics both. Is your objection that available evidence was excluded that you consider to be materially relevant, or that theories were constructed when we don’t have the complete story, or..?

Re: NVIDIA frenemy relation with OpenAI and Oracle

#38

Post by nelox »

ericmcer wrote: post #30
mewpmewp2 wrote: post #29

Earlier quoted context omitted.

I'm sorry, but did you ask ChatGPT or another LLM to critique this article?

definitely reads like it... what is the point lol? Can you sell HN accounts or something?

The point was simply to analyse the argument on its merits

Re: NVIDIA frenemy relation with OpenAI and Oracle

#39

Post by jchw »

tzury wrote: post #22

The Burry short is just one data point, but the "facts we know" are piling up fast. Here is a possible roadmap for the coming correction: 1. The Timeline: We are looking at a winter. A very dark and cold winter. Whether it hits before Christmas or mid-Q1 is a rounding error; the gap between valuations and fundamentals has widened enough to be physically uncomfortable. The Burry thesis—focused on depreciation schedule…

I don't believe your comment is just a direct dump out of an LLM's output, mainly because of the minor typo of "acquihires", but as much as I'd love to ignore superficial things and focus on the substance of a post, the LLM smells in this comment are genuinely too hard to ignore. And I don't just mean because there's em-dashes, I do that too. Specifically these patterns stink very strong of LLM fluff:

> leadership credibility isn’t a soft factor—it’s a structural risk.

> The Timeline/The Big Players/The "Pre-Product" Unicorns/The Downstream Impact

If you really just write like this entirely naturally then I feel bad, but unfortunately I think this writing style is just tainted.

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