NVIDIA frenemy relation with OpenAI and Oracle • Hacker News Board

Re: NVIDIA frenemy relation with OpenAI and Oracle

#71

Post by dylan604 » Mon, Dec 08, 2025, 8:30 PM UTC

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.

I've run into this before in other industries as well. Sports franchises are notorious where they expect any company doing work for the franchise to then spend some of that money earned back with the franchise in forms of buying advertising, suites, etc to the point that very little money if any is made by the vendor.

Re: NVIDIA frenemy relation with OpenAI and Oracle

#72

Post by nelox » Mon, Dec 08, 2025, 8:33 PM UTC

altairprime wrote: post #35

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..?

The problem isn’t theorising itself, investing is full of it. The issue is when speculation is presented with the tone and certainty of established fact. The article doesn’t merely offer possibilities in light of missing data; it states mechanisms and outcomes as though the evidence for them is already in hand. So the objection isn’t to building a model, but to blurring the line between assumption and demonstration, and to glossing over the range of alternative explanations that the same incomplete information could support.

Re: NVIDIA frenemy relation with OpenAI and Oracle

#73

Post by chasd00 » Mon, Dec 08, 2025, 8:33 PM UTC

mr_toad wrote: post #44

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.

Nvidia could have invested elsewhere, but they’re doubling down on AI. Their shares have been tanking for a month, even after a very good earnings report, so perhaps the market seeks a little more diversity?

this isn't an investing site but Coreweave is what I watch. All those freaking datacenters have to get built, come online, and work for all the promises to come true. Coreweave is already in a bit of a picklye, I feel like they are the first domino.

/not an investing/finance/anything to do with money expert.

Re: NVIDIA frenemy relation with OpenAI and Oracle

#74

Post by arcticbull » Mon, Dec 08, 2025, 8:34 PM UTC

wtallis wrote: post #54

zozbot234 wrote: post #33

Earlier quoted context omitted.

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.

NAND is built with dozens of layers on one die. HBM DRAM is a dozen-ish dies stacked and interconnected with TSVs, but only one layer of memory cells per die. AMD's X3D CPUs have a single SRAM die stacked on top of the regular CPU+SRAM, with TSVs in the L3 cache to connect to the extra SRAM. I'm not aware of anyone shipping a product that stacks multiple SRAM dies; the tech definitely exists but it may not be economi…

The issue is size, SRAM is 6 transistors per bit while DRAM is 1 transistor and a capacitor. Anyone who wants density starts with DRAM. There’s never been motivation to stack.

Re: NVIDIA frenemy relation with OpenAI and Oracle

#75

Post by 0xbadcafebee » Mon, Dec 08, 2025, 8:34 PM UTC

pinkmuffinere wrote: post #17

fwip wrote: post #13

- **The Cash Flow Mystery**: ... - **The Inventory Balloon**: ... - **The "Paper" Chase**: ... More AI slop.

I agree it's poorly written, but I'm _much_ more interested in whether it is correct, or incorrect. Do you believe it is incorrect?

Apparently it doesn't matter to them

Re: NVIDIA frenemy relation with OpenAI and Oracle

#76

Post by nelox » Mon, Dec 08, 2025, 8:34 PM UTC

altairprime wrote: post #45

mewpmewp2 wrote: post #29

Earlier quoted context omitted.

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

If you think this comment was not written by the account holder or that account sales are occurring, please do as asked by the guidelines in such cases and contact the mods to report that, instead of posting about it in a discussion.

Thank you

Re: NVIDIA frenemy relation with OpenAI and Oracle

#77

Post by morshu9001 » Mon, Dec 08, 2025, 8:36 PM UTC

jmole wrote: post #43

Isn't circular funding how the entire economy works? I can see how you could make an argument that this particular ouroboros has an insufficient loop area to sustain itself, or more significantly, lacks connection to the rest of the economy, but money has to flow in circles/cycles or it doesn't work at all.

Parties in an economy don't normally buy something that they sell at the same time. It's hazier than that here, but still looks like Nvidia is buying GPUs from itself via OpenAI and Oracle.

Btw there are examples involving sanctioned economies. Most US saffron comes from Spain, all of whose saffron comes from Iran. Azerbaijan exports way more gas than they produce, cause they also buy from Russia.

Re: NVIDIA frenemy relation with OpenAI and Oracle

#78

Post by toast0 » Mon, Dec 08, 2025, 8:36 PM UTC

wtallis wrote: post #54

zozbot234 wrote: post #33

Earlier quoted context omitted.

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.

NAND is built with dozens of layers on one die. HBM DRAM is a dozen-ish dies stacked and interconnected with TSVs, but only one layer of memory cells per die. AMD's X3D CPUs have a single SRAM die stacked on top of the regular CPU+SRAM, with TSVs in the L3 cache to connect to the extra SRAM. I'm not aware of anyone shipping a product that stacks multiple SRAM dies; the tech definitely exists but it may not be economi…

> AMD's X3D CPUs have a single SRAM die stacked on top of the regular CPU+SRAM, with TSVs in the L3 cache to connect to the extra SRAM.

Just FYI, the latest X3D flipped the stack; the cache die is now on the bottom. This helps transfer heat from the compute die to the heatsink more effectively. In armchair silicon designer mode, one could imagine this setup also adds potential for multiple cache dies stacked, since they do interpose all the signals, why not add a second one ... but I'm sure it's not that simple, for one: AMD wants the package z-heights to be consistent between the x3d and normal chip.

Re: NVIDIA frenemy relation with OpenAI and Oracle

#79

Post by tims33 » Mon, Dec 08, 2025, 8:39 PM UTC

The specifics of the article zero sense. Net Income and Operating Cash Flow are not the same thing so there is no mystery about whey they are different especially in a business with large Capex and long lead times.

NVIDIA's historic DSO figures have also ranged from 41 to 57 over the last 5 years, so again not that crazy.

Re: NVIDIA frenemy relation with OpenAI and Oracle

#80

Post by arcticbull » Mon, Dec 08, 2025, 8:40 PM UTC

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.

Burrys critique is that the Nvidia funding deals have them investing money in a company and getting both stock in that company and their own money back to buy the chips. They then book the chip sales in revenue but they don’t show the investment as a cost, since investments are treated separately from an accounting perspective. So it looks like they’re growing revenue organically at no cost, while that doesn’t seem logically consistent with what’s actually happening.