Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Nvidia is the central bank of AI

economist.com

Post reply on HN
Print view View original

101–110 of 363 posts

Re: Nvidia is the central bank of AI

#101

Post by zbentley »

jrmg wrote: post #88
JumpCrisscross wrote: post #49

> worth around $5.4trn Note that the Fed has a $6.7tn balance sheet [1]. (This is a silly comparison. But still fun.) The real comparison: Nvidia's $500+ billion of investments and commitments [2] is substantially more than any easing the Fed has done in the same time [3]. Monetarily, Nvidia is creating a lot of money in our economy. The good news: I have seen no evidence Nvidia has borrowed against its stock or othe…

Its stock could crash without causing–as long as its cash flows continue–a credit crisis through its investments and commitments Uh, that’s a pretty load-bearing as long as its cash flows continue . The two things are surely correlated.

Related but in specific ways. Stock is often priced in anticipation of growth. If NVDA could meet its credit obligations while its real profit stayed flat, the two would diverge, at least for awhile. A large amount of NVDA’s current cash flow is likely purchase contracts with a fixed multi-year term, which further smooths out the impact of, say, a stock crash following a couple of quarters of terrible earnings.

Now, whether many things NVDA has invested in with expectation of repayment or earnings would be able to repay or appreciate in a market environment where Nvidia’s stock was crashing? That’s another question entirely.

Re: Nvidia is the central bank of AI

#102

Post by selectodude »

Espressosaurus wrote: post #65
selectodude wrote: post #44

Earlier quoted context omitted.

It's still a 15B market for Nvidia, it's not nothing. But I'm curious how they're going to turn Rubin into a gaming GPU. I think at this point consumer GPU upgrades are going to be AI-related upgrades that happen to also help raster capabilities. Blackwell was already kind of a dud on performance uplift from Ada beyond the new LLM features.

That 15B also includes people buying 5090s for local LLMs. And it’s maybe 5-10% of their revenue at lower profit margins. Consumer cards just don’t matter very much to nVidia anymore. In 2020 it was half of their revenue.

Hermes still makes saddles that are somewhat reasonably priced compared to their handbags.

It's still profitable, it's their original raison d'etre, and there's no real reason for them to stop even if it its rounding error on their regular business.

Probably will never, ever see an Nvidia card with >32GB of VRAM though unless they start making dies that lack LLM performance like the gimped ethereum mining cards.

Re: Nvidia is the central bank of AI

#103

Post by dehrmann »

jrmg wrote: post #88
JumpCrisscross wrote: post #49

> worth around $5.4trn Note that the Fed has a $6.7tn balance sheet [1]. (This is a silly comparison. But still fun.) The real comparison: Nvidia's $500+ billion of investments and commitments [2] is substantially more than any easing the Fed has done in the same time [3]. Monetarily, Nvidia is creating a lot of money in our economy. The good news: I have seen no evidence Nvidia has borrowed against its stock or othe…

Its stock could crash without causing–as long as its cash flows continue–a credit crisis through its investments and commitments Uh, that’s a pretty load-bearing as long as its cash flows continue . The two things are surely correlated.

> load-bearing

I'm worried I'm going to start picking up claudisms, and then accused of being AI.

Re: Nvidia is the central bank of AI

#107

Post by conmod278 »

manlymuppet wrote: post #74
sailfast wrote: post #57

Earlier quoted context omitted.

It would also follow that by increasing the money supply significantly they’re also contributing to inflation a great deal correct? (Given the rest of the economy is not growing at near the same rate as the AI industry)

Maybe a dumb question but how is NVIDIA increasing the total supply of money? Only the fed can actually order more money to be "created". Private companies can only work within the existing supply, that is, their reserves, no?

I think at the top level between Govt and Industry and understanding has been reached that AI industry will be backstopped

Re: Nvidia is the central bank of AI

#108

Post by neilwilson »

cyberpunk wrote: post #83
manlymuppet wrote: post #74

Earlier quoted context omitted.

Maybe a dumb question but how is NVIDIA increasing the total supply of money? Only the fed can actually order more money to be "created". Private companies can only work within the existing supply, that is, their reserves, no?

NV gives out a $100 to Party A, who puts it in their bank. Bank takes $90 of that deposit (assuming 10% fractional reserve rule, no idea what the actual number is), and loans it out to party B, who pays it into either the same or another bank. Same rules apply -- except now it's down to $81 being loaned out, and so on and so forth, until that 100$ generated $1000 in total bank deposits. edit: of course, it's never ac…

There is no such thing as fractional reserve banking. The multiplier is a myth.

Quite why this persists when the Bank of England debunked it in 2014 [0] is anybody’s guess.

Just another of those concepts that is neat, plausible and wrong.

[0]: https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...

Re: Nvidia is the central bank of AI

#109

Post by neilwilson »

conmod278 wrote: post #87
arcanemachiner wrote: post #86

Earlier quoted context omitted.

Banks create money when issuing a loan. This is how fractional reserve banking works. They lend money they don't have (most of). This is institutionalized fraud, and it's been standard operating procedure for centuries.

But the fraction to be kept in reserve has been zero for 4-5 years.

Almost like the concept is complete bunkum.

It’s been zero in the UK for hundreds of years.

Re: Nvidia is the central bank of AI

#110

Post by master_crab »

manlymuppet wrote: post #74
sailfast wrote: post #57

Earlier quoted context omitted.

It would also follow that by increasing the money supply significantly they’re also contributing to inflation a great deal correct? (Given the rest of the economy is not growing at near the same rate as the AI industry)

Maybe a dumb question but how is NVIDIA increasing the total supply of money? Only the fed can actually order more money to be "created". Private companies can only work within the existing supply, that is, their reserves, no?

They aren’t; the parent comment is incorrect. It’s safer to say Nvidia is encouraging the money that already exists to be deployed on AI buildouts.

But everyone is now chasing the same opportunity (AI and its dependencies like hardware and power) that will drive prices higher in those sectors until supply responds (or demand disappears).

Post reply on HN