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How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

nytimes.com

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Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#341

Post by lukev »

Lord-Jobo wrote: post #329
moogly wrote: post #326

Earlier quoted context omitted.

> Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally. Here's an idea: they could make actual GPUs used for games affordable again, and not have Jensen Huang lie on stage about their performance to justify their astronomical prices. Sure, companies might want to buy them for ML/AI and crash the market again but I'm sure a company of their caliber could solve that if they _r…

I also just don’t understand, as someone with no business experience, how they aren’t just pouring all of that money into enhancing their production capacity. That’s very clearly their bottleneck here. Yes, I’m certain they are spending an astronomical amount on that already, but why not more? Surely paying more money for construction of more facilities still nets gain even if you run into diminishing returns? Instea…

The bottleneck is TSMC, who also make chips for almost every other hardware vendor.

TSMC is indeed increasing their production capability as fast as possible, but it's not easy... chip foundries are extremely expensive, complex, and take serious expertise to operate.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#342

Post by brookst »

Lord-Jobo wrote: post #329
moogly wrote: post #326

Earlier quoted context omitted.

> Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally. Here's an idea: they could make actual GPUs used for games affordable again, and not have Jensen Huang lie on stage about their performance to justify their astronomical prices. Sure, companies might want to buy them for ML/AI and crash the market again but I'm sure a company of their caliber could solve that if they _r…

I also just don’t understand, as someone with no business experience, how they aren’t just pouring all of that money into enhancing their production capacity. That’s very clearly their bottleneck here. Yes, I’m certain they are spending an astronomical amount on that already, but why not more? Surely paying more money for construction of more facilities still nets gain even if you run into diminishing returns? Instea…

It’s called seeding the market. If they can accelerate the growth of potential customers, it will be more profitable than just increasing production to serve existing customers.

Think of exponential growth — would you rather increase the base or the exponent?

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#343

Post by PeterStuer »

vmg12 wrote: post #37

Here is a charitable perspective on what's happening: - Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally. - Nvidia instead invests in other companies that use their gpus by providing them deals that must be spent on nvidia products. - This accelerates the growth of these companies, drives further lock in to nvidia's platform, and gives nvidia an equity stake in these com…

It is'nt just nvidia though.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#344

Post by guywithahat »

dmoy wrote: post #201
guywithahat wrote: post #140

Earlier quoted context omitted.

It's incredible how Tesla used to lose a few hundred million a year and analysis shows would freak out claiming they'd never be profitable. Now Rivian can lose 5 billion a year and I don't hear anything about it, and OpenAI can lose 11 billion in a quarter and Microsoft still backs them. I do think this is going to be a deeply profitable industry, but this feels a little like the WeWork CEO flying couches to offices…

> Now Rivian can lose 5 billion a year and I don't hear anything about it, and OpenAI can lose 11 billion in a quarter and Microsoft Rivian stock is down 90%, and I fairly regularly read financial news about it having bad earnings, stock going even lower, worst-in-industry reliability, etc etc. I don't know why you don't hear about it, but it might be because it's already looking dead in the water so there's no addit…

That's true, I shouldn't have written it off and was too eager to make the analogy.

There was a point where because of Tesla's enormous profits, it was seen as ok for Rivian to lose that much in a year, which was incredible because it's about the same amount of money Tesla lost during its entire tenure as a public company. You're right though they've been criticized for it and have paid the (stock) price for it.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#345

Post by brookst »

thorncorona wrote: post #340
MangoToupe wrote: post #339

Earlier quoted context omitted.

I'm just confused why people think token-based computing is going to be in such demand in the future. It's such a tiny slice of problems worth solving.

It's like how every big co these days is ML. It will transition to LLMs as well. Just give it a few years.

Yep. Same vibes as “ha ha who needs internet connected appliances” (pretty much all appliances are internet connected now). And the apocryphal “there is a worldwide market for maybe 5 computers”.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#346

Post by griffzhowl »

marbro wrote: post #305
skywhopper wrote: post #109

Earlier quoted context omitted.

So many such profitable companies are the best possible evidence for the need for drastic antitrust intervention. The lack of competition and regulation is leading to a massive drain on every other sector.

This bubble is caused by excess competition. There are 4 large companies who believe that a large new market is being created so each is investing large amounts without any evidence that there will be a single winner that dominates the future market. None of these companies has anything remotely resembling a monopoly except for Amazon in online retail.

Google: search, chrome, youtube

Microsoft: desktop software

Meta: social media

Maybe on some technical definitions of "monopoly" these aren't monopolies, but nothing remotely resembling a monopoly? come on maan

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#347

Post by throwaway106382 »

chermi wrote: post #138
throwaway106382 wrote: post #26

Isn't paying a company to dig a hole who then pays you the same amount to fill said hole illegal?

Yes, but what does that have to do with this situation? The hole served no purpose. The companies are using the GPUs.

I suppose we could use a few pennies to hire some security guards to protect the filled holes.

Now we’re creating jobs!

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#348

Post by anthem2025 »

gitremote wrote: post #211
parineum wrote: post #132

Earlier quoted context omitted.

Not really. The idea that reality lies _in_ the middle is fairly coherent. It's not, on it's face, absolutely true but there are and infinite number of options between two outcomes so the odds are overwhelmingly in the favor that the truth lies somewhere in between. Is either side totally right about every single point of contention between them? Probably not, so the answer is likely in the middle. The fallacy is a l…

Flat-earthers: The earth is flat. Round-earthers: The earth is round. "Reality lies in the middle" argument: The earth is oblong, not a perfect sphere, so both sides were right.

[dead]

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#349

Post by anthem2025 »

mamonster wrote: post #241
parineum wrote: post #221

Earlier quoted context omitted.

It isn't. "AI is a bubble" and "AI is going to replace all human jobs" is, essentially, the two extremes I'm seeing. AI replacing some jobs (even if partially) and the bubble-ness of the boom are both things that exist on a line between two points. Both can be partially true and exist anywhere on the line between true and false. No jobs replaced All jobs replaced Bubble crashes the economy and we all end up dead in a…

It is completely fallacious. For one, in higher dimensions, most of the volume of a hypersphere is concentrated near the border. Secondly, and it is somewhat related, you are implicitly assuming some sort of convexity argument (X is maybe true, Y is maybe true, 0.5X + 0.5 Y is maybe true). Why?

[dead]

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#350

Post by mrguyorama »

array_key_first wrote: post #308
OldGreenYodaGPT wrote: post #121

[flagged]

We're all engineers here, you can't handwave all arguments as "luddites" That means you'll have to, you know, actually use your brain and try to construct an argument on how any of this is good for people.

>We're all engineers here

Don't do this. HN has no interview, screening, or application process.

There's plenty people here on HN who are not even programmers. For a long time there were a significant amount of people here who were literally GME bagholders in a cult FFS

There is no reason to believe HN is any different than any other comments selection beyond some very minimal self selection bias, and that doesn't self select for competence. The self selection is "doesn't mind minimal UI"

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