Reminds me of Iceland pre 2008 - lot of circular & complex deals - but now it's different
How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise
361–370 of 428 posts
Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise
#362Earlier quoted context omitted.
Odd how they are simultaneously having large layoffs even as reporting record revenues. The question is where the profits are.
Amazon - 14,000 layoffs; significant Microsoft - 14,000 (multiple rounds); significant Meta - 600 layoffs; insignificant for company size Google - "Several hundred layoffs"; insignificant for a company size Apple - No layoffs Source: https://techcrunch.com/2025/10/24/tech-layoffs-2025-list/
Also every one of them has hundreds of thousands of external contractors which are not reported anywhere.
And offshoring is also a huge cost-cutting effort everywhere.
Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise
#363Here 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…
Yup. Not just Nvidia. Just look at the quarterly results reported by Amazon, Google, Meta, Microsoft and Apple. Each one is reporting revenues never before seen in history. If you make 100 Billion a quarter you have to spend it on something. These guys are running hyper optimized cash extraction mega machines. There is no comparison to previous bubbles, cause so no such companies ever existed in the past.
What's shocking is the gulf between those companies and corporate 'normality'.
Eastern Airways, a UK airline, has just gone bust due to accumulated debts of £26 million. That's not even a rounding error for Google, yet was enough to put a 47-year-old company into bankruptcy and its staff out of work.
I think the only historical parallel to this disparity was the era of the East India Company.
Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise
#364Sam Conman.
Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise
#365These kinds of deals were very much a la mode just prior to the .com crash. Companies would buy advertising, then the websites and ad agencies would buy their services and they'd spend it again on advertising. The end result is immense revenues without profits.
The original "Tech" boom was an infrastructure boom by the telecoms funded by leveraged debt. It was an overbuild mismatch with the market timing. If you brought forward the timeline to when that infrastructure was used (late 2000s) you probably would never have had the crash. This boom is a data center boom with AI being the software layer/driver. This one potentially has a lot longer to run even though everyone is…
One interesting aspect of this is that, with the exception of OpenAI, all of the companies leading this boom generate massive amounts of income from other arms of their buinesses. I think this is one reason for the potentially longer run, since they can subsidize AI CapEx with these cash flows for quite a while.
Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise
#366Earlier quoted context omitted.
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 se…
Okay, sure, but we are probably all interested in tech. I know I am! Being interested in tech, though, doesn't mean that I blindly trust any and all new tech and marketing.
I mean, what OpenAI is saying about their value is marketing. It's sales. It's not technical. Doubting them doesn't make anyone a luddite.
Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise
#367Earlier quoted context omitted.
If you can only continue to fund a venture using scam-like structures, then maybe it's time to re-evaluate what the goals and value prop of the unfundable venture is.
I don't think you understand how ventures are funded.
Maybe, or maybe you think all venture funding schemes are scams. I am not totally there just yet.
Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise
#368Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise
#369Complex and circular deals sounds suspiciously close to fraud.
Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise
#370Earlier quoted context omitted.
It won't work, because most people do not understand what a digital signature is and they will just say that has been faked as well.
Journalists will know how to check it in high profile cases. And annoyed and suspicious techies can use it to check other people's content and report them as fake. Yeah, there are a lot of dumb people who want to be deceived. But would be good for the rest of us to have some tools.
This will just create a black market for AI generated video content that doesn't have a signature. Which I'm sure that China, Russia, hell even the US governments would not have a problem with because that would be extremely useful for them.