For scale: The 1960's era US Navy submarine I served on had a 78MW reactor, so 10GW is 128 nuclear submarines
Or just ten very safe РБМК reactors rated 1GW each (they can't explode).
OpenAI and Nvidia announce partnership to deploy 10GW of Nvidia systems
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Re: OpenAI and Nvidia announce partnership to deploy 10GW of Nvidia systems
#152Re: OpenAI and Nvidia announce partnership to deploy 10GW of Nvidia systems
#153Earlier quoted context omitted.
Nvidia has consistently done this with Coreweave, Nscale, really most of its balance sheet investments are like this. On the one hand there's a vaguely cogent rationale that they're a strategic investor and it sort of makes sense as an hardware-for-equity swap; on the other, it's obviously goosing revenue numbers. This is a bigger issue when it's $100B than with previous investments. It's a good time to gently remind…
A relevant joke, paraphrased from the internet: Two economists are walking in a forest when they come across a pile of shit. The first economist says to the other “I’ll pay you $100 to eat that pile of shit.” The second economist takes the $100 and eats the pile of shit. They continue walking until they come across a second pile of shit. The second economist turns to the first and says “I’ll pay you $100 to eat that…
The punchline is supposed to be GDP, but yeah, same concept.
Re: OpenAI and Nvidia announce partnership to deploy 10GW of Nvidia systems
#154In accounting terms, this is a shady business practice known as "round tripping" where you invest in a company for the sole purpose of them buying your product. It allows you to count your revenue multiple times.
Nvidia has consistently done this with Coreweave, Nscale, really most of its balance sheet investments are like this. On the one hand there's a vaguely cogent rationale that they're a strategic investor and it sort of makes sense as an hardware-for-equity swap; on the other, it's obviously goosing revenue numbers. This is a bigger issue when it's $100B than with previous investments. It's a good time to gently remind…
This should go without saying but unfortunately it really doesn't these days:
This kind of corporate behavior is bad and will end up hurting somebody. If we're lucky the fallout will only hurt Nvidia. More likely it will end up hurting most taxpayers.
Re: OpenAI and Nvidia announce partnership to deploy 10GW of Nvidia systems
#155This is throwing more cards on the house of cards. Nvidia is “investing” in OpenAI so OpenAI can buy GPUs from NVidia. Textbook “round tripping.” I generally like what’s been happening with AI but man this is gonna crash hard when reality sets in. We’re reaching the scary stage of a bubble where folks are forced to throw more and more cash on the fire to keep it going with no clear path to ever get that cash back. If…
reminds me of this image https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2F6...
Re: OpenAI and Nvidia announce partnership to deploy 10GW of Nvidia systems
#156Earlier quoted context omitted.
Is it counting revenue multiple times? It's buying your own products really, but not sure how that counts as double counting revenue
Customer A pays you $100 for goods that cost you $10. You invest $100-$10=$90 in customer B so that they'll pay you $90 for goods that cost you $9. Your reported revenue is now $100+$90=$190, but the only money that entered the system is the original $100.
Except that this is isn't round-tripping at all. Round-tripping doesn't result in a company actually incurring expenses to create more product. Round-tripping is the term for schemes that enable you to double count assets/revenue without any economic effects taking place.
Every time HackerNews talks about anything in the legal or finance realm, people trip over themselves to make arguments for why something a big tech is doing is illegal. This is definitively neither illegal nor shady. If Nvidia believes, for example, that OpenAI can use their GPUs to turn a profit, then this is inherently positive sum economically for both sides: OpenAI gets capital in the form of GPUs, uses them to generate tokens which they sell above the cost of that capital and then the return some of the excess value to Nvidia. This is done via equity. It's a way for Nvidia to get access to some of the excess value of their product.
Re: OpenAI and Nvidia announce partnership to deploy 10GW of Nvidia systems
#157So OpenAI is breaking up with Microsoft and Azure?
Are Anthropic and Google breaking up with Nvidia?
Re: OpenAI and Nvidia announce partnership to deploy 10GW of Nvidia systems
#158For scale: The 1960's era US Navy submarine I served on had a 78MW reactor, so 10GW is 128 nuclear submarines
Some more context, Nuclear power stations can be up to 2GW, offshore windfarms are seemingly hitting a plateau at ~1.5GW, individual turbines in operations now are 15MW. Grids are already strained, 525kV DC systems can transmit ~2GW of power per cable bundle…
Adding 10GW of offtake to any grid is going to cause significant problems and likely require CAPEX intensive upgrades (try buy 525kV dc cable from an established player and you are waiting until 2030+), as well as new generation for the power!
Re: OpenAI and Nvidia announce partnership to deploy 10GW of Nvidia systems
#159We are definitely closer to the top in this market. Do people even realize what they’re predicting in terms of energy use? It’s going to be a wasteland territory sooner than people think.
Re: OpenAI and Nvidia announce partnership to deploy 10GW of Nvidia systems
#160This is throwing more cards on the house of cards. Nvidia is “investing” in OpenAI so OpenAI can buy GPUs from NVidia. Textbook “round tripping.” I generally like what’s been happening with AI but man this is gonna crash hard when reality sets in. We’re reaching the scary stage of a bubble where folks are forced to throw more and more cash on the fire to keep it going with no clear path to ever get that cash back. If…
reminds me of this image https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2F6...
It would be amusing if it also wasn't so accurate.