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Nvidia dramatically reduces amount of OpenAI infra financing it may guarantee

reuters.com

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Re: Nvidia dramatically reduces amount of OpenAI infra financing it may guarantee

#81

Post by KurSix »

trollbridge wrote: post #58
nl wrote: post #22

It's worth noting that this is deal that has never been signed previously. There's a release from DoE about it: https://www.energy.gov/articles/fact-sheet-department-energy... That's a horrible amount of gas energy generation. https://www.datacenterdynamics.com/en/news/openai-in-talks-t... has more details. The whole campus build could be as much as $500B. Would that be the most expensive single thing ever built? The…

Yes, if this thing ever gets built, it will set a whole bunch of new records. If it doesn't get built, it will still set a bunch of records; some of them probably quite infamous. It is hard to describe the ridiculous scale they are trying to do there. For comparison, typical electrical demand is 17 GW and peaking to 25, with total generation capacity being 30 GW. That includes us-east-2, which is not a small data cen…

The permanent jobs number really puts it in perspective. You're not just dropping a giant data center into an existing community at that point, you're potentially reshaping the county around it

Re: Nvidia dramatically reduces amount of OpenAI infra financing it may guarantee

#82

Post by KurSix »

robotresearcher wrote: post #67

'May guarantee' is an oxymoron I've never come across before. Mangled headline. The article title is "Nvidia scales back funding guarantee for Ohio OpenAI data center, WSJ reports".

I think they just mean "is expected to guarantee". Since the deal hasn't been signed, Reuters is hedging, but "may guarantee" is definitely awkward wording for something whose entire purpose is certainty...

Re: Nvidia dramatically reduces amount of OpenAI infra financing it may guarantee

#83

Post by KurSix »

cmiles8 wrote: post #26

Nvidia is turning into a savings and loan company that happens to design computer chips on the side. What could possibly go wrong.

Soon the GPUs will just be the promotional gift you get for opening a sufficiently large Nvidia financing account

Re: Nvidia dramatically reduces amount of OpenAI infra financing it may guarantee

#84

Post by palmotea »

trescenzi wrote: post #70
gonzo41 wrote: post #48

Earlier quoted context omitted.

it'll be a rack based GPU without video ports. The only thing getting sick GPU's will be landfill when they all burn out and the data center rationalization happens.

Totally agree these won’t go to consumers but even after a crash I’d home they are able to be sold for parts and not just to landfills. If this all goes into the trash that would be even more tragic than it already is.

> Totally agree these won’t go to consumers but even after a crash I’d home they are able to be sold for parts and not just to landfills. If this all goes into the trash that would be even more tragic than it already is.

I'm not an accountant (so I could be wrong), but I'm vaguely under the impression it's sometimes financially beneficial to "write off" inventory, and to do that you have to destroy the items (e.g. https://en.wikipedia.org/wiki/Atari_video_game_burial, https://appleinsider.com/articles/23/05/30/apples-lisa-entom...).

So I kinda wouldn't be surprised if a bunch of these GPUs go in the dump, given that it sounds like they'd be extremely power-hungry and difficult to use outside a hyperscale data center setting.

Re: Nvidia dramatically reduces amount of OpenAI infra financing it may guarantee

#85

Post by SturgeonsLaw »

kees99 wrote: post #53
gonzo41 wrote: post #48

Earlier quoted context omitted.

it'll be a rack based GPU without video ports. The only thing getting sick GPU's will be landfill when they all burn out and the data center rationalization happens.

More like rack- sized GPU that takes in half-megawatt of power as 800 volts DC, and requires 10 gallons per second of liquid cooling or it'll catch fire.

Looks like I'll have to get back into casemodding then

Re: Nvidia dramatically reduces amount of OpenAI infra financing it may guarantee

#86

Post by PaulRobinson »

fooker wrote: post #52
Taikhoom10 wrote: post #49

Earlier quoted context omitted.

No, I get this; it is not a problem. It becomes one when they cannot pay back this financing, in the event that they cannot build a sustainable business, which they cannot, because the capital cycle leads to overinvestment, meaning the financiers cannot meet their returns. https://s-1.vercel.app/posts/the-capital-cycle-theory/

It's a problem when there's 10x leverage AND the underlying asset massively deprecates in value. Neither of those look likely yet.

You don’t think GPUs depreciate massively in value? I think they are written off to zero in less than 5 years.

And if you look at the ARR of the companies “buying” them, I think we can see there’s some significant leverage going on.

Re: Nvidia dramatically reduces amount of OpenAI infra financing it may guarantee

#87

Post by Ekaros »

chocolol wrote: post #54

Ed Zitron might be right

His numbers might be off or he might not have all of them.

But still I can not escape that he is most likely correct. All of this equipment needs to be paid. With interest and profit. With the usual overheads that the companies run. And if more is being bought each year. It doesn't seem like one and done deal. And then just asking where will all that money come from is very good one. And one we should be very honest about.

Re: Nvidia dramatically reduces amount of OpenAI infra financing it may guarantee

#88

Post by somenameforme »

jimbo808 wrote: post #30
gymbeaux wrote: post #11

What would happen to Nvidia, Anthropic, OpenAI, if tomorrow someone released an open weights model on HuggingFace that matched performance and accuracy of Opus 5 running locally on an RTX 5070? That won’t happen tomorrow, but it will likely happen someday… what’s the plan beyond “don’t be the one holding the bags?”

There’s no reason to assume frontier-level intelligence eventually collapses all the way onto a midrange consumer GPU. In fact, there are quite a few reasons not to assume that (information-theoretic constraints, etc).

Could you not say the exact same of image gen models? For those that haven't kept up with that domain, you can now efficiently run high quality image gen models on any plain old video card, with phenomenal results.

Re: Nvidia dramatically reduces amount of OpenAI infra financing it may guarantee

#89

Post by PaulRobinson »

zhivota wrote: post #47
notatoad wrote: post #46

Earlier quoted context omitted.

probably not all that much... the market would dip, just like every time a new open weights model gets announced. but hundreds of millions of people aren't going to immediately self-hosting their own models. the biggest winner in that scenario would be ai providers, who suddenly have a capable model that they can serve much more efficiently. and the incumbents have a whole lot of compute. wouldn't anthropic and openA…

They could but then their valuation is no longer justifiable, which breaks a lot of things downstream (loans being the biggie). They'd rather lose money than start making money in a non defensible way.

I think this might be the core signal that it’s a bubble.

Re: Nvidia dramatically reduces amount of OpenAI infra financing it may guarantee

#90

Post by anon7725 »

theobreuerweil wrote: post #66
anon7725 wrote: post #57

Earlier quoted context omitted.

Shouldn’t the analogy be “Apple lends you money to buy a MacBook. You pay Apple for a MacBook…”

This happens as well, no? If you pay for anything in instalments that is effectively a loan.

Typically not a loan on the seller’s books and typically not for the lion’s share of the seller’s annual revenue, no?
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