Oracle debt holders are sweating profusely right now I imagine. How does OpenAI gets 300B$ to pay Oracle [1] when nVidia has to be convinced to shell out "just" 30B for actually purchasing nVidia hardware.
I am very curios if OpenAI's IPO attempt this year will turn into WeWork 2.0 where all the air suddenly comes out of the valuation once the market acknowledges that they have no moat and lack a clear path to profitability that would make these huge investments worthwhile.
Regardless of the promise of the underlying technology, I do wonder about the long-term viability of companies like OpenAI and Anthropic. Not only are they quite beholden to companies like Nvidia or Google for hardware, but LLM tech as it stands right now will turn into a commodity.
It's why Amodei has spoken in favor of stricter export controls and Altman has pushed for regulation. They have no moat.
I'm thankful for the various open-weighted Chinese models out there. They've kept good pace with flagship models, and they're integral to avoiding a future where 1-2 companies own the future of knowledge labor. America's obsession with the shareholder in lieu of any other social consideration is ugly.
There are serious balance sheet concerns for these companies with exposure to OpenAI, Anthropic and such.
It’s all fun and games till it’s not. All this capital investment is going to start hitting earnings as massive deprecation and/or mark-to-market valuation adjustments and if the bubble pops (or even just cools a bit) the math starts to look real ugly real quick.
Now the only question is when. When does this bubble burst?
Great promise, replace all your call centre staff, then your developers with AI. It is cheaper, but only because the AI companies are not charging you what it really costs to do the work.
I wonder how the huge slug of memory that might now have to re-direct mid-ramp as this (and other AI pullbacks) ramify forward? Will Crucial re-enter the desktop market? Or will it create a slow/fast subsidence in memory?
We will live in interesting times..
Considering how gasoline pricing works, RAM prices will likely decay at 1/xth the rate that the grew, so that retailers can capture maximum profit per price point before lowering to the next, and manufacturers can hold the oversupply in reserve for more AI demand. I would expect possible sharp price drop events (depending on the overage levels) just after the end of e.g. Micron’s financial years, though, as they will have unloaded the overflow at discount bulk pricing enabling some retailers to undercut the pre-unload pricing and resuming somewhat rational market behavior.
NVDA has more money than they know what to do with. One strategy when you have extra money is investing it in equities. You exchange money for a slice of future profits. Not sure what the confusion is here
OpenAI is going to have to leapfrog everyone else with some kind of alien tech to remain viable. Nvidia is probably just saving face here and possibly hedging.
Does this mean I will be able to buy RAM for the NAS build I left too late (stupid me assuming I could rely on some basic modicum of price stability)? I assume not.
I have the disks but only random old gaming PCs to put them in. I think I'm going to expand my Proxmox cluster and run Ceph so that I don't have to pay that 6x markup or whatever the fuck it is these days.
I'm tired, man. I'm tired of living in this world where AI is simultaneously an unstoppable eschatological juggernaut that's already making everything worse and at best is going to steal my livelihood and destroy my family's future, but also a hype driven shell game with full buy-in from world leaders and the moneyed elite who see a golden opportunity to extract unprecedented amounts of wealth for themselves before the West falls and they have to make other arrangements.
99% of hobbyist and small business use cases can be served by hardware from 5-10 years which is still relatively cheap. You don't need to compete with Nvidia for brand new DDR5 RAM for your basement NAS.
Ed Zitron is gonna have a field day with this. He wrote / spoke about the dark horses of the AI apocalypse a year or more ago. Scaling back investment was one of the signs he predicted would signal its start.
I like his podcast, Better Offline[0]. Some here might also like it, some would definitely hate it. He's not right about everything he says, but I agree with a lot of it. He has a newsletter for those who don't like podcasts.
There are certainly some good AI critics but Ed Zitron and Gary Marcus are not among them. They're just people who get paid to write anti-AI newsletters whether or not any of it is true.
Really hard for me to understand why the average HN commenter has an almost cultish behavior towards Anthropic, they are somehow excused for all their sins whereas everything OpenAI does is taken in the most uncharitable way. It’s a very consistent pattern.
OpenAI is not worth $860B to anyone other than to the companies hoping to inflate their own valuations by selling it goods and services, at least until OpenAI inevitably goes to zero and its assets are acquired for substantially less than $30B. It simply does not cost $30B to build an OpenAI competitor and the opportunity cost of building one also isn't approaching $30B (unless one accounts for the stock hit from investor FOMO over such a delay, as, for example, Apple knows all too well).
If OpenAI were one of many companies generally promoting the increased use of GPUs in industry, thereby developing the market that nVidia operates in, that would be one thing, but $30B, to one company, that then gets spent on nVidia purchases? Just, No. nVidia will get into a lot of trouble for doing this kind of deal that undermines confidence in the entire stock market.
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[ 1.7 ms ] story [ 58.1 ms ] thread[1] https://www.ft.com/content/90aa74a5-b39d-4131-a138-367726cb1...
It's why Amodei has spoken in favor of stricter export controls and Altman has pushed for regulation. They have no moat.
I'm thankful for the various open-weighted Chinese models out there. They've kept good pace with flagship models, and they're integral to avoiding a future where 1-2 companies own the future of knowledge labor. America's obsession with the shareholder in lieu of any other social consideration is ugly.
It’s all fun and games till it’s not. All this capital investment is going to start hitting earnings as massive deprecation and/or mark-to-market valuation adjustments and if the bubble pops (or even just cools a bit) the math starts to look real ugly real quick.
Great promise, replace all your call centre staff, then your developers with AI. It is cheaper, but only because the AI companies are not charging you what it really costs to do the work.
OpenAi gets 30b, buys chips from nvidia for 30b.
How is that an investment?
well if OpenAi uses a credit card at least they'll get a ton of rewards points :)
I have the disks but only random old gaming PCs to put them in. I think I'm going to expand my Proxmox cluster and run Ceph so that I don't have to pay that 6x markup or whatever the fuck it is these days.
I'm tired, man. I'm tired of living in this world where AI is simultaneously an unstoppable eschatological juggernaut that's already making everything worse and at best is going to steal my livelihood and destroy my family's future, but also a hype driven shell game with full buy-in from world leaders and the moneyed elite who see a golden opportunity to extract unprecedented amounts of wealth for themselves before the West falls and they have to make other arrangements.
I like his podcast, Better Offline[0]. Some here might also like it, some would definitely hate it. He's not right about everything he says, but I agree with a lot of it. He has a newsletter for those who don't like podcasts.
0. https://www.betteroffline.com
hah Nvidia just announced the deal with OpenAI is now $30B instead of $100B.
Think about how valuable HN is for a company whose primary market is professional devs.
If OpenAI were one of many companies generally promoting the increased use of GPUs in industry, thereby developing the market that nVidia operates in, that would be one thing, but $30B, to one company, that then gets spent on nVidia purchases? Just, No. nVidia will get into a lot of trouble for doing this kind of deal that undermines confidence in the entire stock market.