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Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom

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Re: Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom

#101

Post by michaelt »

aurareturn wrote: post #3

Why is it a big deal? Nvidia invested $2b into CoreWeave for 9% equity stake. CoreWeave is spending $35b in CapEx in 2026. Therefore, Nvidia's investment is only 5.7% of CoreWeave's single year CapEx. The other $32b is coming from other sources that isn't Nvidia. This is hardly circular. Nvidia invests in Neoclouds because it's a hedge against hyperscalers having too much power, ie designing and prioritizing their ow…

Bear in mind the last big thing from the tech industry was cryptocurrency.

And that was rife with scams, chicanery, and nonexistent investments. As well as needing lots of GPU-filled power hungry data centres.

So I think a lot of people are viewing the AI boom through the same lens.

Re: Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom

#102

Post by khurs »

RetroTechie wrote: post #31

Might be a blessing in disguise that these companies can't roll out datacenters as quick as they want (due to financing, power issues, permit delays or whatever). That puts a cap on surplus (potentially unused?) datacenter capacity that's around by the time the AI bubble pops.

Blessing in disguise for who?

Any surplus after a pop will be sold for market value and lead to more new cloud provider startups and co-location options.

Re: Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom

#103

Post by khurs »

spwa4 wrote: post #94
brikym wrote: post #35

Earlier quoted context omitted.

Didn't they move to escape that world?

Not too well known, but Yandex very suddenly moved almost all of their employees + families to Israel, and then on to the Netherlands (where they already had an office and a company called "Nebius" to avoid sanctions against Russia) and US. Certainly looks like they were trying to get out, and were rich enough to actually pull it off (that can't have been cheap). Also they deserve some serious kudos for actually tryi…

Wasn't it just a business decision? Move and cut ties with Russia or face closure of Yandex EU

Re: Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom

#104

Post by TrackerFF »

darksim905 wrote: post #86

This isn't really related to the post, but I need to vent I suppose. CoreWeave feels very YC-ish. I thought I had an in as a referral for a position there and got interviewed by someone who knew a lot of my peers where I worked. Dude seemed to ask very textbook style questions that you would only learn if you went to a school system for this particular position/subject. I guess I didn't answer to their satisfaction d…

Could it be that someone there just didn’t like or vibe with you?

FWIW, I’ve referred someone 3 times to the same position because I’m very sure he would be a good fit, and I’ve seen his work.

But for trivial reasons (“He doesn’t seem enthusiastic enough” and “the other candidates are better at promoting/selling themselves”) , a couple of managers that are above me in seniority (and directly in the hiring loop) just refuse to pass said person.

In the end he’s stopped applying, and I feel shitty for referring him.

Re: Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom

#105

Post by boesboes »

CrimsonRain wrote: post #98
vb-8448 wrote: post #22

Earlier quoted context omitted.

My understanding is that it's not about the money itself but the model: - you fund a new company and sign long terms contracts with it - this new company uses the money you gave it and a lot of debt (backed by long term contracts) to build datacenters and buy a lot of GPU - your figures look great What happens when they run out of debt or funds? If they reach some kind of profitability it's not a big deal, but if not…

If you think it's a problem, short NV or buy competitors who are not doing this or don't buy their share at all. If you're right, they'll get burned soon enough and it's none of your business!

Heavy bags huh?

Re: Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom

#106

Post by ilaksh »

mNovak wrote: post #73
ilaksh wrote: post #44

Dumb question, but when the Nebius capacity dashboard says they have around 3 non-preemptible B200s available, does that mean _total_, or is it just how many I myself might be able to rent on demand? One aspect of the profitability might be the utilization and the pricing a few years down the line for slightly older hardware. Already now it seems like the increased processing you get from newer devices versus the cos…

> So the question is can they keep the pricing up on the older ones a few years down the line They don't expect to keep the prices flat over time, and everyone involved will have planned for this. Prices are highest when they're the newest and greatest (part of why it's valuable for neoclouds to be first in line for new models), and drop year by year as newer GPU models can do equivalent work at lower cost. You can s…

hm. I should have written that more precisely, but I thought it was implied/obvious that it would go down to some degree or another. I didn't mean it would literally remain flat. it's a question of how much they drop though, and I don't think they know for sure, because there are new technologies that are really just being held back by manufacturing scale and anti-competition which otherwise could cause larger than anticipated pricing drops for older hardware. like.. how could you read what I wrote in that comment and conclude that I needed you to explain that the prices would drop?

Re: Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom

#107

Post by emil-lp »

roenxi wrote: post #92
vasco wrote: post #85

Earlier quoted context omitted.

It's not circular! And if it is, it's not a problem! And if it's a problem, it doesn't affect me!

Those are 3 thresholds that a situation typically has to meet before people get upset about something. Arguably the 3rd one is not great, but the other two are just obvious and basic requirements. In this case even that last one is fine, the financial system is set up so that, in theory, other people losing money doing something stupid is a problem firewalled to just them.

Well, in this case, it's your pension.

Re: Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom

#108

Post by vb-8448 »

CrimsonRain wrote: post #98
vb-8448 wrote: post #22

Earlier quoted context omitted.

My understanding is that it's not about the money itself but the model: - you fund a new company and sign long terms contracts with it - this new company uses the money you gave it and a lot of debt (backed by long term contracts) to build datacenters and buy a lot of GPU - your figures look great What happens when they run out of debt or funds? If they reach some kind of profitability it's not a big deal, but if not…

If you think it's a problem, short NV or buy competitors who are not doing this or don't buy their share at all. If you're right, they'll get burned soon enough and it's none of your business!

To make money on financial markets it's not just about "if" but also "when" ... and even if I think it's problem (which I didn't say) i for sure don't know "when"!

Re: Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom

#109

Post by spwa4 »

khurs wrote: post #103
spwa4 wrote: post #94

Earlier quoted context omitted.

Not too well known, but Yandex very suddenly moved almost all of their employees + families to Israel, and then on to the Netherlands (where they already had an office and a company called "Nebius" to avoid sanctions against Russia) and US. Certainly looks like they were trying to get out, and were rich enough to actually pull it off (that can't have been cheap). Also they deserve some serious kudos for actually tryi…

Wasn't it just a business decision? Move and cut ties with Russia or face closure of Yandex EU

I have no clue about the reasoning behind the decision. I'm not associated with the company, just know some employees. The feeling is that many more people were taken along than necessary.

Re: Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom

#110

Post by roenxi »

emil-lp wrote: post #107
roenxi wrote: post #92

Earlier quoted context omitted.

Those are 3 thresholds that a situation typically has to meet before people get upset about something. Arguably the 3rd one is not great, but the other two are just obvious and basic requirements. In this case even that last one is fine, the financial system is set up so that, in theory, other people losing money doing something stupid is a problem firewalled to just them.

Well, in this case, it's your pension.

It isn't my pension, and if it was my pension the major issue would be that I was relying on people I think are untrustable with money to fund my retirement. That is one of those ideas so strategically bad that no tactical success or failure matters. I personally wouldn't choose to let more than a fraction of my money get pushed into that vortex. It looks like a disaster waiting to happen (hopefully I'm wrong and everyone goes home happy).

As a rule of thumb in life, if someone is managing your money then you should by and large agree with their judgement of the markets.

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