That’s my main concern with the bubble as well. The economy functions better with diversity. There are so many industries that could use funding outside of tech and some that could use funding with some new tech approaches.
Just the sheer size of investment into a single idea should worry people. Diversity is very important.
nobody would scream circular financing because of this. it's only circular if those companies would then be investing (directly or indirectly) in nvidia.
this however does scream "manufactured demand" - if the terms of your financing dictates that the money is used to purchase your own product.
It can also be a way to make the numbers look bigger for everyone...
Rather than sell a GPU at $500, instead you put the price up to $2000 but then invest in a startup on condition 80% of the investment is used to buy your hardware at inflated prices.
Arguably this is what's happening to 'datacenter' GPU's which are far more expensive than consumer ones for similar performance.
Isnt that... what circular financing often refers to?
If I invest in you and you use my stack and pay me for it. It's circular. I don't think it should be illegal to do this type of vendor financing/investment or what not as it has its legitimate uses.
Circular financing is when the revenue you get back is a fraction of what you put in, essentially. If you put in 1$ to get 10$ back in (future) revenue, that's not circular financing.
Yes but how many such isolated cases are there? There is a real possibility that a lot of the AI bubble is fuelled not by dealing with itself but by pulverizing influence all over the market.
I don't think 1 loop is enough. You could remove the loop by just giving the GPUs directly as part of the investment. But investing in pure cash gives more flexibility especially in time where there may not even been spare GPUs able to be given away.
no, circular financing refers to it bouncing through several loops of that. the implication is that it’s system predators working the math, not the business. you should hear it in the same tones that bankers use the word leverage
Doesn't it? I would not expect the largest public companies to be the most active venture capitalists. The other 10 most active funders are all specialist investors, not standalone companies with venture arms. You have to go down to about #15 to find the next corporate investor, and it's not Microsoft or Apple or Saudi Aramco, but relative minnow Salesforce.
Bear with me.... Leverage and Insurance. Leverage against whom? US govt.
Maybe VCs and Private Equity funds represents what is essentially oligarchs. They are oligarchs as institutions. Everyone knows this already. US has certain liking to captialism as long as it is represented trough institutions and not individuals. Controversial I know, but standard oil, billy boy gates and monopoly trials, musk and spacex being public companies. It is just America.
So, NVIDIA figured out an interesting play. NVIDIA is playing a risky game where US govt can anytime say "fuck you, I hate you now". But if they embroil themselves in enough foundational businesses across america saying fuck you to them is difficult. Startups are " think of the children" corporate America.
They have become part of the oligarch class, they have invested where politicians childrens are working or lets be clear founded startups. This is not curricular economy, it is nvidia buying insurance. If they were read blooded America it would have been leverage, but this is insurance. Saying fuck you to them is progressively getting harder.
Any way my legs are frozen that is enough conspiracy theories I can write from the stall.
Is this leaving good companies unfunded because they're not sufficiently "AI"?
Just the sheer size of investment into a single idea should worry people. Diversity is very important.
It's almost certainly about making sure that these startups use Nvidia stack.
this however does scream "manufactured demand" - if the terms of your financing dictates that the money is used to purchase your own product.
Rather than sell a GPU at $500, instead you put the price up to $2000 but then invest in a startup on condition 80% of the investment is used to buy your hardware at inflated prices.
Arguably this is what's happening to 'datacenter' GPU's which are far more expensive than consumer ones for similar performance.
I paid real money for the 4090. Real $2000
AI boosters always deny reality.
If I invest in you and you use my stack and pay me for it. It's circular. I don't think it should be illegal to do this type of vendor financing/investment or what not as it has its legitimate uses.
But it is circular.
It's just to make sure the next OpenAI uses Nvidia stack.
This is not the case. This is just having influence.
I don't think this locks the startup into Nvidia stack. I don't think this is advertising either. It's just influence.
Circular is not the word I use to describe this business tactic.
Maybe VCs and Private Equity funds represents what is essentially oligarchs. They are oligarchs as institutions. Everyone knows this already. US has certain liking to captialism as long as it is represented trough institutions and not individuals. Controversial I know, but standard oil, billy boy gates and monopoly trials, musk and spacex being public companies. It is just America.
So, NVIDIA figured out an interesting play. NVIDIA is playing a risky game where US govt can anytime say "fuck you, I hate you now". But if they embroil themselves in enough foundational businesses across america saying fuck you to them is difficult. Startups are " think of the children" corporate America.
They have become part of the oligarch class, they have invested where politicians childrens are working or lets be clear founded startups. This is not curricular economy, it is nvidia buying insurance. If they were read blooded America it would have been leverage, but this is insurance. Saying fuck you to them is progressively getting harder.
Any way my legs are frozen that is enough conspiracy theories I can write from the stall.