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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

#161

Post by thiago_fm »

The MI450 is the pets.com from the 90s of AI hardware. It's bad.

The bubble now isn't even about LLMs, but has affected the entire stack. Even hardware companies are offering rubbish for the sake of prop'ing up their own valuation.

CUDA had decades of improvements, we may have AGI (tm) earlier than what it will take AMD to fix their broken software.

MI450 doesn't work well at all, OpenAI would rather take the deal and overspend in a project to try to use it for their software stack, which is incompatible with it.

Just for the sake of proping up valuations, with no "market competitiveness" guidance. Just for moving money.

Funnily enough, Google is ahead of all of this, as they can make their on TPUs and have their integrated stack. They don't need to generate fake economic activityu.

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

#162

Post by lm28469 »

Fade_Dance wrote: post #63
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.

These sorts of outlooks are notoriously hard to predict. Paul Tudor Jones (one of the most successful investors of our time) is of the mindset that if anything we are about to see equity appreciation far in excess of what we have seen for decades. https://fortune.com/2025/10/07/paul-tudor-jones-hedge-fund-b... If that's the case, right when you're looking to rebalance your portfolio, you're going to be looking at a m…

> These sorts of outlooks are notoriously hard to predict

The gut feeling you're about to lose your life savings isn't worth it for a lot of people, when I had most of my money invested it was always in the back of my mind. I cashed out and bought land/started building a multi generational house. All doubts and fear disappeared overnight, I'm for sure losing money compared to going all in on Nvidia or even btc, but I don't need any mental gymnastics to rationalize my choice.

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

#163

Post by ben_w »

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.

Even smart people belive a lot of untrue things, and his domain of knowledge isn't likely to include much more biology than my GCSE grade C and a handfull of brilliant.org micro-lessons; it's quite possible, though I would not put specific odds on it, that he's seen e.g. the sudden change in the rate of progress in protein folding, where before it was ~ one PhD thesis per protein and then suddenly AlphaFold did all of them, and extrapolated from that to everything else like an over-enthusiastic PopSci reporter.

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

#164

Post by thiago_fm »

wmf wrote: post #80
tshaddox wrote: post #69

Earlier quoted context omitted.

Does he explain why the valuation of the company would go up by $78 billion on the public news that AMD agreed to give $78 billion of goods to OpenAI for free?

It validates that MI450 works. Jensen was saying other GPUs are so bad that companies wouldn't even take them for free and then OpenAI said no, we actually will take AMD GPUs for free. They're not that bad.

It's very bad

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

#165

Post by jrflowers »

lelanthran wrote: post #152
jrflowers wrote: post #61

Earlier quoted context omitted.

I don’t know what to tell you guy, but when people see money moving in a circle in a deal there is a good chance that “circular deal” might pop into their heads. Because it’s a deal that is shaped like a circle. > Is that circular? Doesn’t really seem so because at the end of the day the money goes from me to them. I don’t get my money back, I get a car in exchange for my money. Also this deal didn’t begin with the m…

> Your car manufacturer leases your car back from you? And you use that revenue to raise debt to buy more cars from them? Honestly, if this was possible people would be doing it (not that they are not - fleet services and rental fleet services do some pretty funky accounting sometimes, so I wouldn't be surprised at all if this sort of thing happened). If this was possible, I'd be doing it. > What manufacturer are you…

> Good question. The minute an answer gets posted I'm going to have a really good side-hustle.

Yeah “everybody buys cars through the infinite car glitch” sounds like the sort of thing that would be part of an enormously long answer to “should I try WoW for the first time in 2025”

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

#166

Post by thiago_fm »

throw234234234 wrote: post #22
credit_guy wrote: post #16

I don't understand why they are calling these deals circular. OpenAI is buying Nvidia and AMD chips. Oracle is also buying Nvidia chips. OpenAI is buying datacenters from Oracle, which will be powered by the chips Oracle buys from Nvidia. This is one directional: hardware makers (Nvidia and AMD) sell either to datacenter makers (Oracle), or to AI firms (like OpenAI). That's it. No circular deals. But "circular deals"…

In the end with most of these deals its the shareholders paying through market cap dilution. Given the current market structure (the big companies are tech companies) there's PLENTY of capital for OpenAI to fund their expansion. They've discovered a cheat code IMO. Instead of using and raising money themselves, use their reputation/popularity and use their suppliers market caps (e.g. NVIDIA, AMD, etc). The deal makes…

The systemic risk is real

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

#167

Post by OhioMan2943 »

throw-10-8 wrote: post #142
altacc wrote: post #135

Earlier quoted context omitted.

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…

I completely withdrew from the US market last Nov 5th. It's plainly obvious where all of this is going.

Where did you put your funds? bonds are screwed but I'm thinking gold

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

#168

Post by sunrunner »

willvarfar wrote: post #140
victorbjorklund wrote: post #136

Earlier quoted context omitted.

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 )

Ah yes, my favourite philosophical dilemma, The Organs of Theseus, and whether or not a sufficiently organ-replaced person is absolved of their previous actions by virtue of not necessarily being the same person.

As a more serious point related to this though, I was under the impression that organ replacement didn't address issues with telomere length?

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

#169

Post by jeswin »

Traubenfuchs wrote: post #141
jeswin wrote: post #138

Earlier quoted context omitted.

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.

> Can you get that without adding a payment mechanism? No! There are actually two free tiers. The limited free tier you get without adding a CC and then this advanced "always free" tier I am using, where you have to use and verify a CC and have to pay big bucks if you mess up. limited free tier: 300$ to be spent in 30 days advanced always free tier: https://docs.oracle.com/en-us/iaas/Content/FreeTier/freetier...

Messing up with Oracle is a bit different from messing up with Google. I'll go with Hetzner which I love anyway. :)

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

#170

Post by OJFord »

fluoridation wrote: post #32
gruez wrote: post #15

For an interesting interpretation of the recent AMD-OpenAI deal, see Matt Levine's column from a few days ago: > OpenAI: We would like six gigawatts worth of your chips to do inference. > AMD: Terrific. That will be $78 billion. How would you like to pay? > OpenAI: Well, we were thinking that we would announce the deal, and that would add $78 billion to the value of your company, which should cover it. > AMD: … > Ope…

There's no way someone would be stupid enough to part with $x worth of product and $ 0.5 x worth of stock in exchange for $x, is there? Honestly, it's stupid to even make such an offer. What prevents AMD from turning it around on them? > AMD: Oh, since you put it like that, why don't you pay us $x for the chips and give us $ 0.5 x worth of stock? When your market cap rises by $ 0.5 x you'll get the money for those st…

Because OpenAI has the hype and delivers the pop, not AMD. An AMD investment in OpenAI would probably have had a similar effect on AMD, not an equivalent one on OpenAI. (Either way it's Ooh AMD is getting seriously into AI, awesome, suddenly it seems worth 100x whatever it was before!)

Replace AMD & OpenAI with some crypto company and Trump, hypothetically the latter doesn't really obviously get any significant benefit from the former's endorsement.

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