this entire article is seemingly written by an LLM
Nvidia's $20B antitrust loophole
141–150 of 184 posts
Re: Nvidia's $20B antitrust loophole
#142I'm going to assume this is a predominantly AI-written article since for some reason it's talking about GroqCloud serving Llama 2, which they don't.
It claims they serve Llama 2 7B @ 750 tokens/s with 2K context, but over on OpenRouter Groq is listed as serving Llama 3.1 8B @ 1300 tokens/s with 128K context. (And the official GroqCloud site says 840 tokens/s.)
Re: Nvidia's $20B antitrust loophole
#143The analysis here is excellent. However, Groq's success was not obvious or straight forward. It require huge amounts of investment to keep it alive for many years long before any real positive cashflow. It was on its death bed for years before the ChatGPT moment in 2023. It has been over 9 years since its founding. If you know anything about VC funds and exit timelines, you will know that investors in Groq needed an exit by this time.
I'm happy that the investors and founders got a long and well deserved exit. I'm happy that the tech here will continue to see development and investment under Nvidia so we may one day get to use Claude Opus at 500 tokens per second.
Does it suck that certain employees got screwed over? Yes. Does this happen ALL THE TIME in startups? More often than you think. The expected value for employee options for this type of company is very very close to zero. Anyone who thinks otherwise is lying to themselves.
Does it suck that it didn't happen via a normal M&A process? As someone who used to work on tech M&As as an attorney, I would be first one to say that I hope this DOES become the norm. M&A sucks for the employees, the investors, the founders, the acquirers - it sucks for EVERYONE. The only people who it doesn't suck for are the lawyers and bankers who earn more fees the more complex and longer the process is. Best M&A I ever witnessed was the FB acquisition of Instagram that happened over the weekend (my old law firm was part of that deal).
Ask yourself: do you want to spend 2% of your funding round and 2 months on lawyers when you raise a $5m Series A? Then why do you want to do the same when you exit?
Re: Nvidia's $20B antitrust loophole
#144IANAL, and am especially weak on US law, but I suspect this is only an antitrust loophole if the administration chooses not to act. Substance over form must apply? Pretty sure this wouldn't fly in European law.
US has fairly weak antitrust post-Bork.
But even more importantly, NVIDIA is literally paying extra to the feds right now from each GPU sold to China. So they are "in good standing".
Why we allow such blatant bribery is another question.
Re: Nvidia's $20B antitrust loophole
#145Earlier quoted context omitted.
EXCELLENT analysis Ossama >"Non-exclusive" means no monopoly concerns (anyone can license Groq's tech) - except that you can bet only Nvidia gets the absolute top of the line architechture and design - - - - - all others get 2nd best or worse. >The "non-exclusive" label is legal fiction. When you acquire all the IP and hire everyone who knows >how to use it, exclusivity doesn't matter. But the “non exclusive” part is…
The “non exclusive” thing may come back to bite them. If another big player comes in to lic the tech and get “different” tech than nvidia it opens up law suits. Also this seems like it’s just a bet on time. The head engineer who invented this technology will be replicated. But I guess that will take a while and the margin money machine will print Bs while the dust settles.
I'm pretty sure Nvidia overpaid so that groq can charge the same absurd price to the second customer to whom the company's IP is worth maybe a billion or two.
Re: Nvidia's $20B antitrust loophole
#146Earlier quoted context omitted.
It has always been the case, but each year there’s a fresh crop of new, bright-eyed 20-year-olds who haven’t learned it yet. The entire startup ecosystem essentially depends on the fact that some people haven’t yet internalized that options are worthless and working 80+-hour weeks if you’re employee #3 or higher never pays off, because even in the slim chance your company has a successful exit you’ll get fucked over…
It hasn't actually always been the case and the real issue is the false advertising that you actually have equity. If my equity of 1% was real then I would get value as the company grew but the reality is that options/shares without some sort of exit is worth 0. Founders and the C suite often (always now?) get 'internal' raises meaning when a new round of funding hits they get to sell but nobody else does. This, to m…
Honestly the dilution thing never made much sense. It's penny pinching your most important employees.
If you don't want your employees holding shares, then tell them to sell their shares during the seed rounds where you will give them a chance to liquidate and renegotiate the shares allocation. Your employees now have a strong incentive to make it to the next seed round and the bigger the round the better.
The current system appears to be suboptimal for both parties. Employees receive options as replacement for a lower salary, but the founders don't actually want to give up control over the company. This means you now have the worst of both worlds. The employees know they will get shafted and value the options at zero, which kills the productivity incentive. The founders have given away options for nothing and now need to engineer a situation where the options are as valuable as the employees think they are.
Re: Nvidia's $20B antitrust loophole
#147[dead]
Re: Nvidia's $20B antitrust loophole
#148I don't think you can treat owners of the same shares differently in the way this is suggesting. The VC shareholders and the employee shareholders are probably on equal footing and getting the same price. VCs will own preferred but I doubt that is enough to windfall them at the expense of the common shareholders. So if VCs are getting paid a certain share price, employees with vested stock almost certainly are gettin…
very likely the VCs have a clause that allows them to trade at every re-valuation, whereas employees are locked in vested periods, and likely to see their stocks devalue by the time they can cash out.
Re: Nvidia's $20B antitrust loophole
#149This has nothing to do with antitrust. Not like the current administration is going to enforce it anyways. Nvidia simply wants Groq’s tech and leadership without the burden of 500+ employees.
I've posted this in many threads about startups. I have worked at 2 and had bad experiences at both.
Why didn't I get any money from my startup? - A guide to Liquidation Preferences and Cap Table
https://old.reddit.com/r/startups/comments/a8f6xz/why_didnt_...
I have told people that before they join a startup ask about the liquidation preferences and cap table. If the ownership doesn't tell you then consider that a red flag.
I would add this new Groq scenario to the list of questions to ask. "Can you and the executive team go to another company with the IP leaving the employees behind with stock worth $0?" Maybe phrase it better than that but I know a few former coworkers at Groq. I didn't know them well but this probably stinks for them.
Re: Nvidia's $20B antitrust loophole
#150Earlier quoted context omitted.
i thought so at first, but I did some digging and changed my mind. it's possible the following is how it goes: - secondary transaction with the preferred shareholders (VCs) at some price that implies a 20b valuation - founders quit and get new employment agreements - some cash is transferred to the company as a license fee - no acquisition means no DOJ approval in this scenario the headline can be $20b but the cash e…
Don’t the founders (and the board) still have fiduciary duty to the common holders? You can’t stop the founders from leaving, but selling the crown jewel IP in a transaction that doesn’t benefit the shareholders seems a stretch.
likely they can vote for the deal with their personal bias without any repercussions, whereas the CFO can be directly targeted so he stayed on the ship.