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Nvidia is the central bank of AI

economist.com

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Re: Nvidia is the central bank of AI

#151

Post by creativeSlumber »

neilwilson wrote: post #124
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?

All debt is money. Anybody can create money, the trick is getting other people to accept it. Nvidia is vendor financing its output. An ai company order $100m of GPUs. Nvidia delivers and holds onto that debt as an asset - like a bank loan. The production company uses AI to create better plant and purchases $100m of AI tokens to do so. The ai company hold that debt like a bank loan Nvidia requests $100m of production…

If the debt cancels out doesn't this mean that there was no debt ?

Re: Nvidia is the central bank of AI

#152

Post by hammock »

JumpCrisscross wrote: post #144
hammock wrote: post #140

Earlier quoted context omitted.

“Federal reserve note” You are taking this too literally anyway. I know they don’t backstop jack squat but in practice there is a fed put. Have a conversation with me, don’t be a pedant. If you are saying they will lend last resort against treasuries you should know there are $40 trillion of those outstanding… How about what’s the amount from banks that the fed would willing lend as a last resort?

> “Federal reserve note” That isn't a backstop, it's a direct obligation. It's also, like, not a real one? You can't redeem notes for specie. The term originates from when you could redeem dollars for metal. The Fed did play a role in backstopping that guarantee. > know they don’t backstop jack squat but in practice there is a fed put Sure. That isn't the same as a backstop. Backstops are hard–the Fed can't turn away…

Wasn’t trying to dick measure nvda vs fed. More thinking thru guarantees vs assets for the two institutions

Re: Nvidia is the central bank of AI

#153

Post by SleightOfHand »

More like investors/AWS right?

Funding companies under the condition that they use their infra.

Also called: Buying customers.

I thought a central bank would be like: China is the world's largest official creditor and holds the highest foreign exchange reserves.

That's what makes you a naturally forming central bank.

Re: Nvidia is the central bank of AI

#154

Post by viccis »

awesomeMilou wrote: post #133
manlymuppet wrote: post #69

I've always found it interesting when corporations start acting like public institutions. When traditionally philosophical, social contract ideas apply to things like corporate governance. Or like here, where private structures get powerful and important enough to resemble government structures. The ideas we deal with when we discuss society and organization aren't exclusive to government, they relate to human nature…

Yeah its soooo interesting! Totally not dystopian, just soooo interesting and fascinating to ponder these scenarios in which corporations hold equal power to national governments! Just such a curious scenario to let your mind wander about, how society would look like in these scenarios! /s I'm honestly so sick of the suspense of disbelief on this site, how is this more "interesting" to you, than the absolute sheer te…

Lighten up

Re: Nvidia is the central bank of AI

#155

Post by MachineMan »

petcat wrote: post #27
overcast wrote: post #18

Earlier quoted context omitted.

ASML is the foundation. Without them, none of this would exist.

I think we can go even further and say that IBM, Zeiss, several Japanese companies, and even the US Department of Energy are the actual foundation since ASML is largely just an integrator of many different technologies they license from elsewhere.

“Our age of silicon is collapsing” - Christopher Nolan

Re: Nvidia is the central bank of AI

#156

Post by kennywinker »

SleightOfHand wrote: post #149
kennywinker wrote: post #137

Earlier quoted context omitted.

Compute has already lost value for me. Six months ago I thought you needed a 1T+ model to be useful coding. Now I am able to get by just fine with a 27b model. I see two factors converging to cause a collapse of this house of cards: 1. People are realizing that what they need isn't more general intelligence, it's more specialization. A small but well tuned coding model, a small but well tuned customer service model,…

You're not considering video which OpenAI opted out of when they retired Sora. Generative video requires significantly more computing power and energy than generative text. OpenAI is fucked, compute is still needed, it's just them that isn't.

OpenAI dropped sora because it was costing them ridiculous amounts of money and earning them very little. They determined that the market can't support the cost of generating video.

Without a material change in the market (more buyers, vastly cheaper generation), it's unlikely a different company could make that work. More buyers isn't likely to happen, so that leaves vastly cheaper generation - something that would cause nvidia's value to collapse if it happened.

Re: Nvidia is the central bank of AI

#157

Post by manlymuppet »

qlte wrote: post #128
manlymuppet wrote: post #69

I've always found it interesting when corporations start acting like public institutions. When traditionally philosophical, social contract ideas apply to things like corporate governance. Or like here, where private structures get powerful and important enough to resemble government structures. The ideas we deal with when we discuss society and organization aren't exclusive to government, they relate to human nature…

Well the key difference making any superficial similarities fall apart is Nvidia does not have neutral economy-wide goals of maintaining small+stable inflation, near-full employment and stabilizing financial institutions like the Fed does. Nvidia is entirely self interested in protecting their own shareholder value (that includes the incestuous web of investments ultimately ending up spent on their GPUs). The structu…

Corporations certainly don't have the same goals government does, but human nature applies universally.

I'm not saying that corporations should have exactly the same rules and structure as government does, but perhaps many of the ideas used to design governments can be borrowed.

Re: Nvidia is the central bank of AI

#158

Post by spunker540 »

SleightOfHand wrote: post #148
spott wrote: post #113

Earlier quoted context omitted.

Yea, but they would have to become insolvent in a way that makes compute lose value. The reason Nvidia is comfortable making these deals is because if OpenAI can’t use the compute, someone else can. Granted OpenAI going insolvent likely means a drop in the value of compute…

> if OpenAI can’t use the compute, someone else can This is the big point IMO since I have never given $1 to OpenAI but I subscribe to Vidu and Typecast, and have given money to Kling, Hailou, and even Gemini in the form of Google Workspace. So these other guys have products and use cases, which OpenAI has never been able to crack beyond ChatGPT. And ChatGPT was never worth paying for, IMO. If OpenAI dies, it's not b…

Do you use coding agents? Just curious bc from my experience using coding agents, open ai’s codex is neck and neck with anthropic’s claude code if not ahead. I wouldn’t agree that OpenAI hasn’t done anything since ChatGPT since codex is my daily driver for software engineering

Re: Nvidia is the central bank of AI

#159

Post by JumpCrisscross »

hammock wrote: post #152
JumpCrisscross wrote: post #144

Earlier quoted context omitted.

> “Federal reserve note” That isn't a backstop, it's a direct obligation. It's also, like, not a real one? You can't redeem notes for specie. The term originates from when you could redeem dollars for metal. The Fed did play a role in backstopping that guarantee. > know they don’t backstop jack squat but in practice there is a fed put Sure. That isn't the same as a backstop. Backstops are hard–the Fed can't turn away…

Wasn’t trying to dick measure nvda vs fed. More thinking thru guarantees vs assets for the two institutions

> guarantees vs assets for the two institutions

The Fed can never default on any dollar-denominated debt. There is no similar currency that Nvidia can create ad infinitum.

That said, the number I think you're looking for in respect of the Fed is $30 to 40 trillion. It's about U.S. GDP. And it's also about U.S. bank and money-market assets plus the Fed's balance sheet. If every American bank failed, this could be the amount of money the Fed would have to create.

That said, Treasury running out and e.g. defending the euro-yen could easily increase that cross section in practice.

Re: Nvidia is the central bank of AI

#160

Post by NooneAtAll3 »

manlymuppet wrote: post #69

I've always found it interesting when corporations start acting like public institutions. When traditionally philosophical, social contract ideas apply to things like corporate governance. Or like here, where private structures get powerful and important enough to resemble government structures. The ideas we deal with when we discuss society and organization aren't exclusive to government, they relate to human nature…

USA is trying to become corporatocracy

In a country without religion, banner or ideology to unite the people in current-and-coming turbulent times, the bet is made on "unite under money, or have no money left"

the way to fight it is to be principled even in front of cheaper options - and to support others like you

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