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

301–310 of 366 posts

Re: Nvidia is the central bank of AI

#301

Post by cryptonector »

master_crab wrote: post #95
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…

“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).

> heavy lifting

Load bearing, heavy lifting... Your comment wasn't LLM-written, either. I think we're starting to see LLMisms infect human writing. I might try to start speaking like this and see if anyone notices. It could be a good gag.

Re: Nvidia is the central bank of AI

#302

Post by esikich »

mastax wrote: post #97
esikich wrote: post #89

Earlier quoted context omitted.

The $9000 has to be paid back, and then some. I sure hope you aren't an accountant.

But for the duration, there is more money. This isn’t some crank theory, it’s orthodox economics: https://en.wikipedia.org/wiki/Fractional-reserve_banking

Yeah, we all know what fractional reserve banking is. But a debt exists at the same time and the idea is the money that was lent builds something, creating value. Let me borrow some gold so I can use my herbalism expertise to make some potions and sell them for a price that is greater than the sum of ingredients. That's how value is created. Saying loaning money inflates money de facto is disingenuous. Wealth is being created on the other side via goods and services.

Re: Nvidia is the central bank of AI

#303

Post by ShinyLeftPad »

butterNaN wrote: post #271
anu7df wrote: post #198

Cracks are starting to appear. Open Ai and Anthropic are publicly asking for slowdown in AI research. Translation: We see this technology not being any more useful than what it is now, no AGI is coming, and the first one to accept this and slow down the dollar burn rate will incur the wrath of the market. So let's say this big boogey man technology will end all life on earth and we all slow down together. Bonus point…

It's always funny to me when they do the fear-propaganda, e.g. A statement like "There's a 10% chance that AI will destroy humanity in a decade". If a government were for the people, it can reasonably react with "Okay - if that's the case, you should shut down. And if not you will be arrested. Because if this is true, you're willingly building equivalent of a nuclear bomb."

> you're willingly building equivalent of a nuclear bomb

Not just building but actively testing

Re: Nvidia is the central bank of AI

#304

Post by daveguy »

cryptonector wrote: post #301
master_crab wrote: post #95

Earlier 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).

> heavy lifting Load bearing, heavy lifting... Your comment wasn't LLM-written, either. I think we're starting to see LLMisms infect human writing. I might try to start speaking like this and see if anyone notices. It could be a good gag.

Or you might find out how little people care about AI. Which would not bode well for bearing load.

Re: Nvidia is the central bank of AI

#305

Post by [deleted] »

ericd wrote: post #252
kennywinker wrote: post #203

Earlier quoted context omitted.

This is definitely the position of the big ai companies. But it doesn't match my experience. Qwen3.8 27b is clearly smarter at coding than MANY bigger models. gpt-oss-120b for example, is almost 4x the size, and performs way worse at coding tasks. It's clear to me that you can build small models that work well at specific tasks. Python vs Rust is probably too fine grained a way to build a model. Coding in general see…

Gpt-oss—120b is like 1000 years old in AI years, whereas Qwen 3.8 27b is pretty young. What you’re seeing is that parameters aren’t apples to apples, and at a given parameter level, the new models are much, much better than the ones from a year or two ago. Like, to a comical degree.

[deleted]

Re: Nvidia is the central bank of AI

#306

Post by daveguy »

manlymuppet wrote: post #157
qlte wrote: post #128

Earlier quoted context omitted.

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.

I would love for good governance principles to seep into corporations rather than the other way around. Seems about time the direction reversed.

Re: Nvidia is the central bank of AI

#307

Post by fatata123 »

cryptonector wrote: post #301
master_crab wrote: post #95

Earlier 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).

> heavy lifting Load bearing, heavy lifting... Your comment wasn't LLM-written, either. I think we're starting to see LLMisms infect human writing. I might try to start speaking like this and see if anyone notices. It could be a good gag.

[dead]

Re: Nvidia is the central bank of AI

#308

Post by rgmerk »

spott wrote: post #113
master_crab wrote: post #95

Earlier 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…

Maybe I’m just old and cynical but that sounds like the kind of assumption of independence of events that led to the GFC .

Re: Nvidia is the central bank of AI

#309

Post by cryptonector »

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…

In principle you need a banking license in order to create money, so not "anybody" can create money. For example, I can't, and neither can you (unless you're a bank, which I suspect you're not_.

Re: Nvidia is the central bank of AI

#310

Post by cryptonector »

ElProlactin wrote: post #273
YokoZar wrote: post #266

Earlier quoted context omitted.

"Create money" here doesn't mean literally fluffing the balance sheet like when the fed prints money (which would have accounting differences), it means spending the same money more rapidly than otherwise. This is NVidia's personal contribution to increasing the economy's Money Multiplier [ https://en.wikipedia.org/wiki/Money_multiplier ], which effectively increases the money supply from the broader economy's perspe…

You're conflating the money multiplier and velocity. They aren't the same thing. The multiplier is about banks turning reserves into deposits via lending while "spending the same money more rapidly" is velocity. This doesn't apply to Nvidia extending trade credit and this description of bank money creation isn't even the accepted version today anyway. Regarding velocity: a receivable on Nvidia's books isn't in M1 or…

I'm a bit shocked that this comment got flagged and went dead -- it might or might not be correct in its claims, but flagging it seems ridiculous to me.
Post reply on HN