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Nvidia's $750B in Deals Reignite Circular AI Fears

bloomberg.com

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Re: Nvidia's $750B in Deals Reignite Circular AI Fears

#5

Post by vannevar »

bwfan123 wrote: post #2

I guess it gets bigger with each passing day. Tens of billions goes to Hundreds of billions.

It has to get bigger. As soon as it starts shrinking, the next round of debt will no longer be able to cover the prior round of commitments. What is happening in AI is essentially a gigantic version of what is happening in consumer auto loans, they just keep refinancing for more and more money. Eventually there will be no one willing to lend them more, and then they'll go to the government to bail them out.

Re: Nvidia's $750B in Deals Reignite Circular AI Fears

#6

Post by theideaofcoffee »

It's come to a point (or has it passed it) that these numbers are completely meaningless. One hundred billion here, $750B there, $1.2T over a year or so, toss in $300B for a few hyperscalers there. There's no imaginable scenario where these are actually backed up with real profit to where the investments make sense. Just passing the same hundred dollar bill among everyone and all booking it as revenue. I can't wait until it pops.

Re: Nvidia's $750B in Deals Reignite Circular AI Fears

#7

Post by apercu »

vannevar wrote: post #5
bwfan123 wrote: post #2

I guess it gets bigger with each passing day. Tens of billions goes to Hundreds of billions.

It has to get bigger. As soon as it starts shrinking, the next round of debt will no longer be able to cover the prior round of commitments. What is happening in AI is essentially a gigantic version of what is happening in consumer auto loans, they just keep refinancing for more and more money. Eventually there will be no one willing to lend them more, and then they'll go to the government to bail them out.

I'm not sure a government can bail out these irrational companies and have it not be political suicide.

Re: Nvidia's $750B in Deals Reignite Circular AI Fears

#9

Post by nickff »

scrappyjoe wrote: post #8
jdalgetty wrote: post #4

At what point do I start taking money out of my VTI holdings and parking it in cash - there is no way the market keeps going up.

Park it in BRK?

BRK has been roughly flat since the beginning of 2025; you might be better off in bonds or money markets (depending on your beliefs about near-term inflation).
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