Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble? • Hacker News Board

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#31

Post by Mo3 » Sat, Oct 04, 2025, 2:34 PM UTC

mg wrote: post #18

Fiber networks were using less than 0.002% of available capacity, with potential for 60,000x speed increases. It was just too early. I doubt we will see unused GPU capacity. As soon as we can prompt "Think about the codebase over night. Try different ways to refactor it. Tomorrow, show me your best solution." we will want as much GPU time at the current rate as possible. If a minute of GPU usage is currently $0.10, a…

> I doubt we will see unused GPU capacity

I'd argue we very certainly will. Companies are gobbling up GPUs like there's no tomorrow, assuming demand will remain stable and continue growing indefinitely. Meanwhile LLM fatigue has started to set in, models are getting smaller and smaller and consumer hardware is getting better and better. There's no way this won't end up with a lot of idle GPUs.

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#32

Post by chatmasta » Sat, Oct 04, 2025, 2:35 PM UTC

cantor_S_drug wrote: post #20

mg wrote: post #18

Fiber networks were using less than 0.002% of available capacity, with potential for 60,000x speed increases. It was just too early. I doubt we will see unused GPU capacity. As soon as we can prompt "Think about the codebase over night. Try different ways to refactor it. Tomorrow, show me your best solution." we will want as much GPU time at the current rate as possible. If a minute of GPU usage is currently $0.10, a…

With improvements on the algorithm side and new techniques, even older hardware will become useful.

This is the biggest threat to the GPU economy – software breakthroughs that enable inference on commodity CPU hardware or specialized ASIC boards that hyperscalers can fabricate themselves. Google has a stockpile of TPUs that seem fairly effective, although it’s hard to tell for certain because they don’t make it easy to rent them.

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#33

Post by jcranmer » Sat, Oct 04, 2025, 2:36 PM UTC

dangus wrote: post #4

I think we are at the PS3/Xbox 360 phase of AI. By that I mean, those were the last consoles where performance improvements delivered truly new experiences, where the hardware mattered. Today, any game you make for a modern system is a game you could have made for the PS3/Xbox 360 or perhaps something slightly more powerful. Certainly there have been experiences that use new capabilities that you can’t literally put…

> By that I mean, those were the last consoles where performance improvements delivered truly new experiences, where the hardware mattered.

The PS3 is the last console to have actual specialized hardware. After the PS3, everything is just regular ol' CPU and regular ol' GPU running in a custom form factor (and a stripped-down OS on top of it); before then, with the exception of the Xbox, everything had customized coprocessors that are different from regular consumer GPUs.

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#34

Post by Theodores » Sat, Oct 04, 2025, 2:37 PM UTC

This reminds me of SGI at the peak of the dot-com bubble.

SGI (Silicon Graphics) made the 3D hardware that many companies relied on for their own businesses, in the days before Windows NT and Nvidia came of age.

Alias|Wavefront and Discreet were two companies where their product cycles were very tied in the SGI product cycles, with SGI having some ownership, whether it be wholly owned or spun out (as SGI collapsed). I can't find the reporting from the time, but it seemed to me that the SGI share price was propped up by product launches from the likes of Alias|Wavefront or Discreet. Equally, the 3D software houses seemed to have share prices propped up by SGI product launches.

There was also the small matter of insider trading. If you knew the latest SGI boxes were lemons then you could place your bets of the 3D software houses accordingly.

Eventually Autodesk, Computer Associates and others eventually owned all the software, or, at least, the user bases. Once upon a time these companies were on the stock market and worth billions, but then they became just another bullet point in the Autodesk footer.

My prediction is that a lot of AI is like that, a classic bubble, and, when the show moves on, all of these AI products will get shoehorned into the three companies that will survive, with competition law meaning that it will be three rather than two eventual winners.

Equally, much like what happened with SGI, Nvidia will eventually come a cropper due to the evaluations due to today's hype and hubris not delivering.

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#35

Post by digitcatphd » Sat, Oct 04, 2025, 2:37 PM UTC

The biggest issue with Nvidia is their revenue is not recurring but the market is treating their stock as it were, which is correlated with all semi stocks, with a one-time massive CAPEX investment lasting 1-2 years.

Simple as this - as to why its just not possible for this to continue.

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#36

Post by delusional » Sat, Oct 04, 2025, 2:38 PM UTC

stephc_int13 wrote: post #27

Knowing history of past bubbles is only mildly informative. The dotcom bubble was different than the railroads bubble etc. The only thing to keep in mind is that all of this is about business and ROI. Given the colossal investments, even if the companies finances are healthy and not fraudulent, the economic returns have to be unprecedented or there will be a crash. They are all chasing a golden goose.

> only mildly informative

I agree, but would like to maybe build out that theory. When we start talking about the mechanisms of the past we end up over-constricting the possibility space. There were a ton of different ways the dotcom bubble COULD have played out, and only one way it did. If we view the way it did as the only way it possibly could have, we'll almost certainly miss the way the next bubble will play out.

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#37

Post by JCM9 » Sat, Oct 04, 2025, 2:39 PM UTC

The smartest finance folks I know say that this “irrational exuberance” works until it doesn’t. Meaning nobody really thinks it’s sustainable, but companies and VCs chasing the AI hype bubble have backed themselves into a corner where the only way to stop the bubble from bursting is to keep inflating the bubble.

The fate of the bubble will be decided by Wall Street not tech folks in the valley. Wall Street is already positioning itself for the burst and there’s lots of finance types ready to call party over and trigger the chaos that lets them make bank on the bubble’s implosion.

These finance types (family offices, small secret investment funds) eat clueless VCs throwing cash on the fire for lunch… and they’re salivating at what’s ahead. It’s a “Big Short” once in 20-30 years type opportunity.

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#38

Post by hodgesrm » Sat, Oct 04, 2025, 2:40 PM UTC

dvt wrote: post #7

alephnerd wrote: post #2

Glad to see Tom's blog on HN - as usual a great write up. A number of us have been chatting about this for several months now, and the take is fairly sober. Meta commentary but I've grown weary of how commentary by actual domain experts in our industry are underrepresented and underdiscussed on HN in favor of emotionally charged takes.

> actual domain experts Calling a VC a "domain expert" is like calling an alcoholic a "libation engineer." VC blogs are, in the best case, mildly informative, and in the worst, borderline fraudulent (the Sequoia SBF piece being a recent example, but there are hundreds). The incentives are, even in a true "domain expert" case (think: doctors, engineers, economists), often opaque. But when it comes to VCs, this gets ra…

Martin Casado is a counter-example. His writings on technology starting with his phd thesis are very informative. [0] He’s the real thing as are many others.

[0] http://yuba.stanford.edu/~casado/mcthesis.pdf

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#39

Post by xadhominemx » Sat, Oct 04, 2025, 2:40 PM UTC

Mo3 wrote: post #31

mg wrote: post #18

Fiber networks were using less than 0.002% of available capacity, with potential for 60,000x speed increases. It was just too early. I doubt we will see unused GPU capacity. As soon as we can prompt "Think about the codebase over night. Try different ways to refactor it. Tomorrow, show me your best solution." we will want as much GPU time at the current rate as possible. If a minute of GPU usage is currently $0.10, a…

> I doubt we will see unused GPU capacity I'd argue we very certainly will. Companies are gobbling up GPUs like there's no tomorrow, assuming demand will remain stable and continue growing indefinitely. Meanwhile LLM fatigue has started to set in, models are getting smaller and smaller and consumer hardware is getting better and better. There's no way this won't end up with a lot of idle GPUs.

Test time compute has made consumption highly elastic. More compute = better results. Marginal cost of running these GPUs when they would otherwise be idle is relatively very low. It will be utilized.

Re: Circular Financing: Does Nvidia's $110B Bet Echo the Telecom Bubble?

#40

Post by delusional » Sat, Oct 04, 2025, 2:40 PM UTC

Mo3 wrote: post #31

mg wrote: post #18

Fiber networks were using less than 0.002% of available capacity, with potential for 60,000x speed increases. It was just too early. I doubt we will see unused GPU capacity. As soon as we can prompt "Think about the codebase over night. Try different ways to refactor it. Tomorrow, show me your best solution." we will want as much GPU time at the current rate as possible. If a minute of GPU usage is currently $0.10, a…

> I doubt we will see unused GPU capacity I'd argue we very certainly will. Companies are gobbling up GPUs like there's no tomorrow, assuming demand will remain stable and continue growing indefinitely. Meanwhile LLM fatigue has started to set in, models are getting smaller and smaller and consumer hardware is getting better and better. There's no way this won't end up with a lot of idle GPUs.

> There's no way this won't end up with a lot of idle GPUs.

Nvidia is betting the farm on reinventing GPU compute every 2 years. The GPUs wont end up idle, because they will end up in landfills.

Do I believe that's likely, no, but it is what I believe Nvidia is aiming for.