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Nvidia's $750B in Deals Reignite Circular AI Fears

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Re: Nvidia's $750B in Deals Reignite Circular AI Fears

#12

Post by jshen »

jdalgetty wrote: post #4

At what point do I start taking money out of my VTI holdings and parking it in cash - there is no way the market keeps going up.

First, don't park it in actual cash or you'll lose value to inflation which is currently running high. At a minimum put it in treasuries.

Second, trying to time the market is almost always a suboptimal strategy. The question is when will you likely need the money? If you won't need it for 10 years or more, keep it in index funds. Otherwise, treasuries.

Re: Nvidia's $750B in Deals Reignite Circular AI Fears

#14

Post by ryandvm »

vannevar wrote: post #5
bwfan123 wrote: post #2

I guess it gets bigger with each passing day. Tens of billions goes to Hundreds of billions.

It has to get bigger. As soon as it starts shrinking, the next round of debt will no longer be able to cover the prior round of commitments. What is happening in AI is essentially a gigantic version of what is happening in consumer auto loans, they just keep refinancing for more and more money. Eventually there will be no one willing to lend them more, and then they'll go to the government to bail them out.

Yeah, I'm pretty sure we've already passed some sort of fiscal singularity where economic and political interests are so intertwined that there can only be growth. If there ever isn't growth, then the legislators (who are elected via corporate sponsorship) will pull whatever levers necessary to make sure that there will always be asset growth.

It's some sort of tragic positive feedback loop that isn't going to stop until the whole thing comes crashing down for everyone and we're paying $37,000 for a loaf of bread.

Re: Nvidia's $750B in Deals Reignite Circular AI Fears

#15

Post by niklasd »

nickff wrote: post #9
scrappyjoe wrote: post #8

Earlier quoted context omitted.

Park it in BRK?

BRK has been roughly flat since the beginning of 2025; you might be better off in bonds or money markets (depending on your beliefs about near-term inflation).

Not that I have any skills in stock-picking whatsoever, but couldn't the recent lukewarm performance not also be an argument for BRK?

I mean their cash pile is also invested in money markets (so you get that), and the rest of the portfolio consists of quality companies where their (combined) valuation didn't explode in the last 1,5 years. So it's an opportunity to invest into something that might not be overheated.

Re: Nvidia's $750B in Deals Reignite Circular AI Fears

#16

Post by fullshark »

apercu wrote: post #7
vannevar wrote: post #5

Earlier quoted context omitted.

It has to get bigger. As soon as it starts shrinking, the next round of debt will no longer be able to cover the prior round of commitments. What is happening in AI is essentially a gigantic version of what is happening in consumer auto loans, they just keep refinancing for more and more money. Eventually there will be no one willing to lend them more, and then they'll go to the government to bail them out.

I'm not sure a government can bail out these irrational companies and have it not be political suicide.

I'd kill my political career for the private sector rewards sure to follow.

Re: Nvidia's $750B in Deals Reignite Circular AI Fears

#18

Post by bryanlarsen »

nickff wrote: post #9
scrappyjoe wrote: post #8

Earlier quoted context omitted.

Park it in BRK?

BRK has been roughly flat since the beginning of 2025; you might be better off in bonds or money markets (depending on your beliefs about near-term inflation).

BRK is 40% cash at the moment. I think "roughly flat" is evidence they're performing the strategy the OP wanted.

BRK has stated that they'll buy back in when prices are reasonable again, so it's an automatic "sell-high buy-low" strategy.

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