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OpenAI, Nvidia fuel $1T AI market with web of circular deals

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Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals

#131

Post by neuronic »

athrowaway3z wrote: post #130
Sam6late wrote: post #93

Earlier quoted context omitted.

This is How Larry Elisson beat Musk for a short while although Oracle was struggling.' The deals among Oracle, Nvidia, and OpenAI have raised concerns about their circular and potentially risky nature. Oracle is reportedly spending tens of billions on Nvidia's advanced chips, Nvidia plans to invest up to $100 billion in OpenAI, and OpenAI uses Oracle's cloud infrastructure through Microsoft's Azure, creating a closed…

It's worth noting Elisson is 2 years older than Trump. What's he going to do with all that money, and what does he care for the risk it's bad or shady? Worst case, he got to be #1 for a bit for a few dozen billion, best case he's hoping AGI will extend his life before he croaks.

What does Ellisons personal wealth have to do with this? The concern is that the circular pattern of shifting money between these companies is artificially inflating the stock market to heights that will crash very very badly when this bubble finally pops.

Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals

#132

Post by fedeb95 »

churchill wrote: post #47

On the surface, the circular financing seems worrying but once you dig into it, it seems quite benign, tbh. NVIDIA is handing out GPUs into OpenAI, in return for stock/future revenue, whichever way you want to slice it. OpenAI has wonky unit economics, yes, but they're growing at ~100% YoY, so it all checks out, if you ask me.

yes but their growth isn't driven by actual profits. It's a bet.

Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals

#133

Post by pta2002 »

Traubenfuchs wrote: post #123
nl wrote: post #121

Earlier quoted context omitted.

Oracle most certainly is not struggling. Even putting aside the NVidia deal, their cloud business is thriving.

They give you 4 nodes with 1 vcpu and 6GB RAM each for free forever by the way. Most other stuff has a free tier too. I used it to learn terraform and have a kubernetes cluster running. I know it's always trendy to bash oracle and simp for AWS, but it is THE best option for learning and hobbyists.

You can also get all of that in a single node, which makes for a fairly beefy build server :)

Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals

#134

Post by neuronic »

XorNot wrote: post #119
heywoods wrote: post #97

Earlier quoted context omitted.

Is it fair to say OpenAI is in a sense “washing” the money passing between Nvidia and Oracle? And instead of taking a cut in the traditional money laundering they are enjoying massive valuation gains? When the fed investigates this does it matter if one of the 3 companies is not a publicly traded company?

What you're missing is that real value can be created in these exchanges - Nvidia really makes chips for example. The issue is that it's an industry of investment which exists solely to power more investment in AI - the entire chain is still assuming that someone will eventually pay for this. At the end of the day all that money leaks out to employees and suppliers...but no one those people transact with may have any…

That's only really value if the chips are useful and if there are people buying the chips for something they want to do with them.

It's entirely based on the perception that LLM training & inference is here to stay at ever growing scales when the shortcomings of Artificial Dreaming are increasingly scrutinized. Not all businesses want to end up paying refunds to their clients like Deloitte [1] because the LLM hallucinated crap into their reports (and they failed to correct it).

[1] https://www.theguardian.com/australia-news/2025/oct/06/deloi...

Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals

#135

Post by altacc »

throw-10-8 wrote: post #104

Anyone remember the subprime crisis?

The other day I was helping somebody choose some funds to invest in. The majority of "global" or "index" funds we looked into either directly or indirectly had the largest share of holdings in Nvidia, Microsoft, Meta, Alphabet, AMD. Often these were about 50-70% of their portfolio. The returns for the past year look great but the crash is going to be devastating and widespread because so many investments link back to this bubble.

Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals

#136

Post by victorbjorklund »

athrowaway3z wrote: post #130
Sam6late wrote: post #93

Earlier quoted context omitted.

This is How Larry Elisson beat Musk for a short while although Oracle was struggling.' The deals among Oracle, Nvidia, and OpenAI have raised concerns about their circular and potentially risky nature. Oracle is reportedly spending tens of billions on Nvidia's advanced chips, Nvidia plans to invest up to $100 billion in OpenAI, and OpenAI uses Oracle's cloud infrastructure through Microsoft's Azure, creating a closed…

It's worth noting Elisson is 2 years older than Trump. What's he going to do with all that money, and what does he care for the risk it's bad or shady? Worst case, he got to be #1 for a bit for a few dozen billion, best case he's hoping AGI will extend his life before he croaks.

Doubt he believes that. Getting AGI (whatever that actually means) means we are still far away from reversing ageing.

Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals

#138

Post by jeswin »

Traubenfuchs wrote: post #123
nl wrote: post #121

Earlier quoted context omitted.

Oracle most certainly is not struggling. Even putting aside the NVidia deal, their cloud business is thriving.

They give you 4 nodes with 1 vcpu and 6GB RAM each for free forever by the way. Most other stuff has a free tier too. I used it to learn terraform and have a kubernetes cluster running. I know it's always trendy to bash oracle and simp for AWS, but it is THE best option for learning and hobbyists.

That's very cool. I was going to get a hetzner for some hobby projects.

Can you get that without adding a payment mechanism? For some reason, I'd be more cautious about putting my card into Oracle's offering than anyone else.

Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals

#139

Post by altacc »

chasd00 wrote: post #26

Yeah I spoke to my wife a few min ago about these deals and other indicators of a bubble. We’re updating our 401k’s and the old college fund brokerage account in the morning and have agreed to not make any additional changes until Jan 2027. Going to sit out a year and see what happens.

I am for a medium risk profile and I've already started diversifying. A lot of major "global" or "index" tracking funds are now majority comprised of holdings in Nvidia, Microsoft, Meta, Alphabet and also Tesla. I've seen many supposedly non-tech funds where about 50-75% of their portfolio are linked to this bubble. Sometimes the holdings aren't clear if the fund invests in other funds. As an individual investor I won't be able to react fast enough to a crash, so am being proactive with moving investments so that no more than half is exposed. Will obviously keep an eye on things to reduce that if it looks wise.

Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals

#140

Post by willvarfar »

victorbjorklund wrote: post #136
athrowaway3z wrote: post #130

Earlier quoted context omitted.

It's worth noting Elisson is 2 years older than Trump. What's he going to do with all that money, and what does he care for the risk it's bad or shady? Worst case, he got to be #1 for a bit for a few dozen billion, best case he's hoping AGI will extend his life before he croaks.

Doubt he believes that. Getting AGI (whatever that actually means) means we are still far away from reversing ageing.

(Interestingly, some of the world's dictators do seem to have an interest in the current state of the art in prolonging life. For example Xi and Putin chatted about organ replacement https://www.bbc.com/news/articles/cr70rvrd41ko)
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