@cstross @laird
For those who haven't been watching:
A load of AI companies are actually just OpenAI resellers. OpenAI is among the biggest investors in these companies, but NVIDIA is also big. The way it works is something a bit like this:
NVIDIA invests $10M in some AI company.That company takes $2M in revenue for effectively reselling OpenAI models at well below cost.That company buys $12M of OpenAI credits (from their revenue plus investor money).OpenAI reports $12M of revenue and uses this to justify raising $100M more investor money.OpenAI buys $100M of GPUs from NVIDIA.NVIDIA reports $100M of revenue and an asset worth at least $10M.Everyone wins! Money from thin air!
There's a more fun variant that is, roughly:
Investment firm has a $100M stake in NVIDIA.Investment firm borrows $50 against this stake and uses it to invest in a load of AI startups (maybe even OpenAI).Demand for GPUs goes up!NVIDIA valuation increases significantly and now the firm's NVIDIA portfolio is worth $1BCompany slowly sells 20% of their stake (slowly, so it doesn't spook the market, but it's a fairly small fraction of market cap, so that's fine).Company writes off the $50M investment in startups.Company now has $150M in cash and an NVIDIA stake valued at $800M that they can borrow against.If anyone except Trump were in the White House, I'd expect the end result of a bunch of SEC investigations to result in a lot of folks going to prison.