Being the central bank of anything is certainly not a compliment. I'd take it as an insult
Nvidia is the central bank of AI
161–170 of 363 posts
Re: Nvidia is the central bank of AI
#162I'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
To be clear: I'm not trying to advocate for more corporate power.
Re: Nvidia is the central bank of AI
#163Earlier 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?
Private banks increase money supply by lending. If 10 people deposit $1000 in a bank, it can loan $9000 to an 11th person. Now the economy has $19000 total.
Ummm. No. I suggest you research how balance sheets work.
Unfortunately this kind of thinking is why so many people seem to think the big AI labs are totally killing it the second they make a “profit” on inference. Yes if you ignore the balance sheet all looks fine. Unfortunately companies go bankrupt because of their balance sheets, not operating profits and losses. You can make money on the direct COGS on every transaction and still be bankrupt.
Re: Nvidia is the central bank of AI
#164Earlier quoted context omitted.
> 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
It's kinda nuts to me how people can act like Claude is lightyears ahead of OpenAI models. Sure, it's one thing to simply have a preference or claim that Claude does some things better, but in reality they are both about as effective at doing the same job. I've long preferred GPT models because they know better how to shut up and don't seem to overthink as much as Claude, but I'm under no illusions that if OpenAI went belly-up then I couldn't do my job essentially the same with Claude. GPT models have also clearly improved over time in terms of programming. There haven't been any "big bangs" necessarily, but it's really not hard to give the same task to 5.3 and 6 and see which one has better output.
Re: Nvidia is the central bank of AI
#165>Nvidia’s financial engineering is partly a response to its biggest customers’ transformation into rivals. “Hyperscalers”, tech giants such as Amazon, Google, Meta and Microsoft, account for roughly half of Nvidia’s revenue
Companies just don't want to pay Jensen's tax. Hyperscalers might still pay Jensen's tax for LLM training but for inference. you don't have to. they are also betting on their own chip for training to replace Nvidia.
this is Nvidia panicking and doing vendor fiance to Neoclouds and buying Hugging Face. even none hyperscalers like Meta is betting on its own chip for AI inference.
Re: Nvidia is the central bank of AI
#166I'm curious what the actual rate of replacement/useful life of these GPUs running AI inference 24/7 is.
If these cards burn out in less than the ~5 years of depreciation that accounting puts them at, well then there will be problems.
Re: Nvidia is the central bank of AI
#167Earlier quoted context omitted.
Private banks increase money supply by lending. If 10 people deposit $1000 in a bank, it can loan $9000 to an 11th person. Now the economy has $19000 total.
Ummm. No. I suggest you research how balance sheets work. Unfortunately this kind of thinking is why so many people seem to think the big AI labs are totally killing it the second they make a “profit” on inference. Yes if you ignore the balance sheet all looks fine. Unfortunately companies go bankrupt because of their balance sheets, not operating profits and losses. You can make money on the direct COGS on every tra…
You should research economics.
That $9000 can build a house that wouldn’t have existed otherwise. Then it gets paid back. $10000 in the bank and a $9000 house.
Re: Nvidia is the central bank of AI
#168Weird to think we are currently living in the ‘unlimited free Ubers because you recommended a friend or 2’ phase of this new technology.
Imagine if running fable costs you what it actually costs to run fable. A lot of vibe coders (and just proper software engineers) are gonna be very sad if that comes to pass.
Re: Nvidia is the central bank of AI
#169Earlier quoted context omitted.
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 ?
I’m guessing it doesn’t “cancel out” due to interest.
Re: Nvidia is the central bank of AI
#170Earlier quoted context omitted.
“as long as it’s cash flow continues” is doing a lot of optimistic heavy lifting. The whole premise of the circular financing worry is that Nvidia sits in the middle of all the guarantees made to companies like OpenAI. If any of those companies become insolvent, Nvidia is on the hook for it. Also Nvidia isn’t really creating money. The 500B number is third party capital that already exists (BX, Apollo, etc).
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…
Granted OpenAI going insolvent
All the "frontier" AI companies *are* currently insolvent. They have never been anything other than cash burning machines.
The only way they keep the lights on and the doors open is by borrowing money --- and epic amounts of it. If those operating the cash spigot decide to turn it off, all AI companies will likely be similarly affected --- and so will Nvidia.
OpenAI expects to burn through more cash between 2024 and 2029 than Uber, Tesla, Amazon and Spotify did - combined - before those companies started making money
https://www.morningstar.com/news/marketwatch/20251205243/thi...