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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

#81

Post by wmf »

BobbyTables2 wrote: post #68
ctkhn wrote: post #12

Earlier quoted context omitted.

Stock buyback isn't a total scam as it seems, but it does mean "we can't figure out any productive use case for this cash in advancing R&D or scaling our business anymore" which is still pretty worrying

It’s more like, “the executives with lots of shares can’t see how to make the company grow, so they’ll just use profits to pump up the share price for their gain”. I deeply feel buybacks shouldn’t be illegal but treated shamefully. Instead of using profits to build up long term savings or fund R&D, they basically choose to do as little as possible. There is no vision.

Realistically, if the execs think they can't do R&D then they can't. If they tried they would just waste the money.

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

#83

Post by wmf »

deadbabe wrote: post #27

All I want to know is, should we be investing into these companies as a result of these deals? Or should we be moving out of these positions.

The OpenAI/AMD deal has an explicit AMD price target of $600. I don't see how it can be any clearer.

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

#86

Post by [deleted] »

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"…

[deleted]

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

#87

Post by sbierwagen »

Angostura wrote: post #14

This reminds me of around 2002 when I wrote an article looking at how all the web behemoths at the time were claiming profitability through ad sales, but actually the vast majority of ads were from one web behemoth advertising on an other's site and vice versa.

Also a pg essay from 2010: https://www.paulgraham.com/yahoo.html

>By 1998, Yahoo was the beneficiary of a de facto Ponzi scheme. Investors were excited about the Internet. One reason they were excited was Yahoo's revenue growth. So they invested in new Internet startups. The startups then used the money to buy ads on Yahoo to get traffic. Which caused yet more revenue growth for Yahoo, and further convinced investors the Internet was worth investing in. When I realized this one day, sitting in my cubicle, I jumped up like Archimedes in his bathtub, except instead of "Eureka!" I was shouting "Sell!"

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

#88

Post by 01100011 »

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.

Equities in the US are priced in dollars. If you think the dollar is going to lose value(because the government is led by people who have repeatedly told you this is their goal) then you expect stocks to rise commensurate with the devaluation of the dollar. I am not a bitcoiner or saying the USD is done for, but it seems clear that the dollar is weakened and will continue to weaken and this is a significant risk for folks like me with minimal exposure to stocks and precious metals.

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

#89

Post by themafia »

sbierwagen wrote: post #87
Angostura wrote: post #14

This reminds me of around 2002 when I wrote an article looking at how all the web behemoths at the time were claiming profitability through ad sales, but actually the vast majority of ads were from one web behemoth advertising on an other's site and vice versa.

Also a pg essay from 2010: https://www.paulgraham.com/yahoo.html >By 1998, Yahoo was the beneficiary of a de facto Ponzi scheme. Investors were excited about the Internet. One reason they were excited was Yahoo's revenue growth. So they invested in new Internet startups. The startups then used the money to buy ads on Yahoo to get traffic. Which caused yet more revenue growth for Yahoo, and further convinced investors…

That's not how Ponzi schemes work. Yahoo had a defacto _monopoly_ and the market had bad discovery leading to bad price information. There was no point at which the internet was /not/ worth investing in and everyone who had experience with it knew that.

The real problem seemed to be that you can only put so much money into pets.com before it becomes stupid. You had more short term investment capital than could be _effectively_ spent at the time. The long term players, as usual, avoided the Archimedian idealism, and were heavily rewarded anyways.

pg has startup brains.

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

#90

Post by noitpmeder »

themafia wrote: post #89
sbierwagen wrote: post #87

Earlier quoted context omitted.

Also a pg essay from 2010: https://www.paulgraham.com/yahoo.html >By 1998, Yahoo was the beneficiary of a de facto Ponzi scheme. Investors were excited about the Internet. One reason they were excited was Yahoo's revenue growth. So they invested in new Internet startups. The startups then used the money to buy ads on Yahoo to get traffic. Which caused yet more revenue growth for Yahoo, and further convinced investors…

That's not how Ponzi schemes work. Yahoo had a defacto _monopoly_ and the market had bad discovery leading to bad price information. There was no point at which the internet was /not/ worth investing in and everyone who had experience with it knew that. The real problem seemed to be that you can only put so much money into pets.com before it becomes stupid. You had more short term investment capital than could be _ef…

pg has completely clairvoyant vision, if only about historical events
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