Here 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 companies.
- Since growth for these companies is accelerated, future revenue will be brought forward for nvidia and since these investments must be spent on nvidia gpus it drives further lock in to their platform.
- Nvidia also benefits from growth due to the equity they own.
This is all dependent on token economics being or becoming profitable. Everything seems to indicate that once the models are trained, they are extremely profitable and that training is the big money drain. If these models become massively profitable (or at least break even) then I don't see how this doesn't benefit Nvidia massively.
> Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally.
Here's an idea: they could make actual GPUs used for games affordable again, and not have Jensen Huang lie on stage about their performance to justify their astronomical prices. Sure, companies might want to buy them for ML/AI and crash the market again but I'm sure a company of their caliber could solve that if they _really_ wanted to.
I also just don’t understand, as someone with no business experience, how they aren’t just pouring all of that money into enhancing their production capacity. That’s very clearly their bottleneck here.
Yes, I’m certain they are spending an astronomical amount on that already, but why not more? Surely paying more money for construction of more facilities still nets gain even if you run into diminishing returns?
Instead they set up this whacko tax laundering scheme? Just seems like more corporate pocket filling to me, an idiot with no business knowledge.
Why would they want to do that? The only sector that matter to nvidia is datacenter, its where 90%+ of their profits are. Making their consumer sector even less profitable just seems like a waste of time
Your conclusion about training being the cost factor that will eventually align with profitability in the inference phases relies on training new models not being an endless arms race.
I'm just confused why people think token-based computing is going to be in such demand in the future. It's such a tiny slice of problems worth solving.
> - Nvidia also benefits from growth due to the equity they own.
aka this might be nvidia's next pivot. Contrary to gaming cards, the AI GPUs are productive assets. If nvidia feels that they will be very productive, then it makes sense that they invest broadly in the companies that are likely to make these profits. To share in the rewards while selling more GPUs.
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.
100 billion a quarter is Alphabet, right? Given how much click fraud there is, and that every org and business under the sun is held to ransom to feature on the SERP for their own name even — it’s tempting to say Google’s become a private tax on everything.
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.
So many such profitable companies are the best possible evidence for the need for drastic antitrust intervention. The lack of competition and regulation is leading to a massive drain on every other sector.
Right. As far as I can tell, OpenAI, Grok, etc sell me tokens at a loss.
But I am having a hard time figuring out how to turn tokens into money (i.e. increased productivity). I can justify $40-$200 per developer per month on tokens but not more than that.
I can't read your hyperbolically titled paywalled medium post, so idk if it has data I'm not aware of or is just rehashing the same stats about OpenAI & co currently losing money (mostly due to training and free users) but here's a non paywalled blog post that I personally found convincing: https://www.snellman.net/blog/archive/2025-06-02-llms-are-ch...
These 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.
Circular investments were also a compounding factor in the Japanese asset price bubble.
The practice was known as “zaitech”
> zaitech - financial engineering
> In 1984, Japan’s Ministry of Finance permitted companies to operate special accounts for their shareholdings, known as tokkin accounts. These accounts allowed companies to trade securities without paying capital gains tax on their profits.
> At the same time, Japanese companies were allowed to access the Eurobond market in London. Companies issued warrant bonds, a combination of traditional corporate bonds with an option (the “warrant") to purchase shares in the company at a specified price before expiry. Since Japanese shares were rising, the warrants became more valuable, allowing companies to issue bonds with low-interest payments.
> The companies, in turn, placed the money they raised into their tokkin accounts that invested in the stock market. Note the circularity: companies raised money by selling warrants that relied on increasing stock prices, which was used to buy more shares, thus increasing their gains from investing in the stock market.
There’s one key difference in my opinion: pre-.com deals were buying revenue with equity and nothing else. It was growth for growth’s sake. All that scale delivered mostly nothing.
OpenAI applies the same strategy, but they’re using their equity to buy compute that is critical to improving their core technology. It’s circular, but more like a flywheel and less like a merry-go-round. I have some faith it could go another way.
> they’re using their equity to buy compute that is critical to improving their core technology
But we know that growth in the models is not exponential, its much closer to logarithmic. So they spend =equity to get >results.
The ad spend was a merry go round, this is a flywheel where the turning grinds its gears until its a smooth burr. The math of the rising stock prices only begins to make sense if there is a possible breakthrough that changes the flywheel into a rocket, but as it stands its running a lemonade stand where you reinvest profits into lemons that give out less juice
If they don't then they're spending a ton of money to level up models and tech now, but others will eventually catch up and their margins will vanish.
This will be true if (as I believe) AI will plateau as we run out of training data. As this happens, CPU process improvements and increased competition in the AI chip / GPU space will make it progressively cheaper to train and run large models. Eventually the cost of making models equivalent in power to OpenAI's models drops geometrically to the point that many organizations can do it... maybe even eventually groups of individuals with crowdfunding.
OpenAI's current big spending is helping bootstrap this by creating huge demand for silicon, and that is deflationary in terms of the cost of compute. The more money gets dumped into making faster cheaper AI chips the cheaper it gets for someone else to train GPT-5+ competitors.
The question is whether there is a network effect moat similar to the strong network effect moats around OSes, social media, and platforms. I'm not convinced this will be the case with AI because AI is good at dealing with imprecision. Switching out OpenAI for Anthropic or Mistral or Google or an open model hosted on commodity cloud is potentially quite easy because you can just prompt the other model to behave the same way... assuming it's similar in power.
I think that, at best, that description boils down to Nvidia, Oracle, etc inventing fake wealth to build something and OpenAI building their own fake wealth by getting to use that new compute effectively for free.
There are physical products involved, but the situation otherwise feels very similar to ads prior to dotcom.
> OpenAI applies the same strategy, but they’re using their equity to buy compute that is critical to improving their core technology. It’s circular, but more like a flywheel and less like a merry-go-round. I have some faith it could go another way.
I'm commenting here in case a large crash occurs, to have a nice relic of the zeitgeist of the time.
Eventually when ChatGPT replaces Google Search, they will run ads, and so have that whole revenue stream. Still isn't enough money to buy the trillions worth of infrastructure they want, but it might be enough to keep the lights on.
The customers bought real equipment that was claimed to be required for the "exponential growth" of the Internet. It is very much like building data centers.
Wasn’t there also a bunch of telecom infrastructure created in the dot-com bubble, tangible products created, etc? Things like servers, telephone wires, underwater internet cables, tech-storefronts, internet satellites, etc.
The other difference (besides Sam's deal making ability) is, willing investors: Nvidia's stock rally leaves it with a LOT of room to fund big bets right now. While in Oracle's case, they probably see GenAI as a way to go big in the Enterprise Cloud business.
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 freaking out now. If you believe the AI is rebuilding compute then this changes our compute paradigm in the future. As well as long as we don't get an over leveraged build out without revenue coming in the door. I think we are seeing a lot of revenue come in for certain applications.
The companies that are all smoke and mirrors built on chatGPT with little defensibility are probably the same as the ones you are referring to in the current era. Or the AI tooling companies.
To be clear circular deal flow is not a good look.
I can see the both sides of bull and bear at this moment.
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.
I'd gander a guess that there's nothing tech specific here and that fraudulent schemes are well defined for the SEC and commercial courts to take action if something is not kosher
It's usually not actually fraud. It's the amazon reinvesting back into growth, except the unit economics don't work if everyone cashes out at the same time, and if anyone starts cashing out the growth stops and everyone cashes out before it's too late.
Real question -- how else is OpenAI supposed to fund itself? It has capital requirements that the most moneyed business companies can't provide. So it has to come up with ways to get access to money while de-risking the terms. Not saying the circularity works but I don't know how else you raise at their scale.
This money is well beyond VC capability.
Either this lets them build to net positive without dying from painful financing terms or they explode spectacularly. Their rate of adoption it seems to be the former.
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.
Edit: the following is incorrect. I didn't know that the change to IRC § 174 was cancelled this summer.
------
What's crazy is that with the
2021 changes to IRC § 174 most software r&d spending is considered capital investment and can't be immediately expensed. Has to be amortized over 5 years.
I don't know how that 11.5B number was derived, but I would wager that the net loss on income statement is a lot lower than the net negative cash flow on cash flow statement.
If that 11.5B is net profit/loss, then whatever the portion of the expense part of the calculation that's software R&D could be 5x larger if it weren't for the new amortization rule.
It's incredible how Tesla used to lose a few hundred million a year and analysis shows would freak out claiming they'd never be profitable. Now Rivian can lose 5 billion a year and I don't hear anything about it, and OpenAI can lose 11 billion in a quarter and Microsoft still backs them.
I do think this is going to be a deeply profitable industry, but this feels a little like the WeWork CEO flying couches to offices in private jets
> Now Rivian can lose 5 billion a year and I don't hear anything about it, and OpenAI can lose 11 billion in a quarter and Microsoft
Rivian stock is down 90%, and I fairly regularly read financial news about it having bad earnings, stock going even lower, worst-in-industry reliability, etc etc.
I don't know why you don't hear about it, but it might be because it's already looking dead in the water so there's no additional news juice to squeeze out of it.
Rivian lost something like $5B in 2024, but they're on track to only lose $2.25B in 2025. That trend line is clear. In 2026 they release a much lower cost model, and a lot of that loss has been development of that model. They probably won't achieve profitability in 2026, but if they get their loss down to $1B in 2026, in 2027 we'll likely see them go net positive.
Investors are trying to bet on OpenAI being the first to replace all human skilled labor. Of course, this is foolish for a few reasons:
1. Performance of AI tools improving but marginally so in practice
2. If human labor was replaced, it's the start of global societal collapse so any winnings would be moot.
We had an impressive new technology (the Web), and everyone could see it was going to change the world, which fueled a huge gold rush that turned into a speculative bubble. And yes, ultimately the Web did change the world and a lot of people made a lot of money off of it. But that largely happened later, after the bubble burst, and in ways that people didn't quite anticipate. Many of the companies people were making big bets on at the time are now fertile fodder for YouTube video essays on spectacular corporate failures, and many of the ones that are dominant now were either non-existent or had very little mindshare back in the late '90s.
For example, the same year the .com bubble burst, Google was a small new startup that failed to sell their search engine to Excite, one of the major Web portal sites at the time. Excite turned them down because they thought $750,000 was too high a price. 2 years later, after the dust had started to settle, Excite was bankrupt and Google was Google.
And things today sure do strike me as being very similar to things 25, 30 years ago. We've got an exciting new technology, we've got lots of hype and exuberant investment, we've got one side saying we're in a speculative bubble, and the other side saying no this technology is the real deal. And neither side really wants to listen to the more sober voices pointing out that both these things have been true at the same time many times in the past, so maybe it's possible for them to both be true at the same time in the present, too. And, as always, the people who are most confident in their ability to predict the future ultimately prove to be no more clairvoyant than the rest of us.
>and OpenAI can lose 11 billion in a quarter and Microsoft still backs them.
For Microsoft, and the other hyperscalers supporting OpenAI, they're all absolutely dependent on OpenAI's success. They can realistically survive through the difficult times, if the bubble bursts because of a minor player - for example if Coreweave or Mistral shuts down. But if the bubble bursts because the most visible symbol of AI's future collapses, the value-destruction for Microsoft's shareholders will be 100x larger than OpenAI's quarterly losses. The question for Microsoft is literally as fundamental as "do we want to wipe $1tn off our market cap, or eat $11bn losses per quarter for a few years?" and the answer is pretty straightforward.
Altman has played an absolute blinder by making the success of his company a near-existential issue for several of the largest companies to have ever existed.
This comment is pretty depressing but it seems to be the path we're headed to:
> It's bad enough that people think fake videos are real, but they also now think real videos are fake. My channel is all wildlife that I filmed myself in my own yard, and I've had people leaving comments that it's AI, because the lighting is too pretty or the bird is too cute. The real world is pretty and cute all the time, guys! That's why I'm filming it!
Combine this with selecting only what you want to believe in and you can say that video/image that goes against your "facts" is "fake AI". We already have some people in pretty powerful positions doing this to manipulate their bases.
> We already have some people in pretty powerful positions doing this to manipulate their bases.
You don't have to be vague. Let's be specific. The President of the United States implied a very real voiceover of President Reagan was AI. Reagan was talking about the fallacy of tariffs as engines of economic growth, and it was used in an ad by the government of Ontario to sow divide within Republicans. It worked, and the President was nakedly mad at being told by daddy Reagan.
We are heading to an apocalyptic level of psychosis where human beings won't even believe the things they see with their own eyes are real anymore because of being flooded with AI slop 24/7/365.
There was a discussion on here recently about a new camera that could prove images taken with it weren't AI fakes, and most of the comments were skeptical anyone would care about such things.
This is an example of how people viscerally hate anyone passing off AI generated images and video as real.
I was at a bitcoin conference in 2018. One guy in the booth told me that the company had set up a $100M fund to fund startups that agreed to build apps on their blockchain. I wonder where they are now?
Okay, that article is a little bit shallow. I just summarises the headlines of the last weeks of circular deals. But is there also a more in depth article that sheds a little more light onto what this actually means? From a financial perspective?
He also has a podcast called Better Offline, which is slightly too ad heavy for my taste. Nevertheless, with my meagre understanding of the large corporate finances I was not able to find any errors in his core argument regardless of his somewhat sensationalist style of writing.
My complaint about Ed Zitron is that he's _always_ shouting into the void about something. A lot of the issues he covers are legitimate and deserve the scorn he gives them but at some point it became hard for me to sort the signal from the noise.
Ed Zitron sucks because he constantly spitballs on easy to confirm topics and keeps being wrong in ways that should be trivial to check and fix. Case in point:
It’s probably hard to do that in a news context because the real rationales are pretty tight.
Depending on your POV OpenAI and the surrounding AI hype machine is at the extremes either the dawn of a new era, or a metastasized financial cancer that’s going to implode the economy. Reality lies in the middle, and nobody really knows how the story is going to end.
In my personal opinion, “financial innovation” (see: the weird opaque deals funding the frantic data center construction) and bullshit like these circular deals driving speculation is a story we’ve seen time and time again, and it generally ends the same way.
An organization that I’m familiar with is betting on the latter - putting off a $200M data center replacement, figuring they’ll acquire one or two in 2-3 years for $0.20 on the dollar when the PE/private debt market implodes.
> Depending on your POV OpenAI and the surrounding AI hype machine is at the extremes either the dawn of a new era
Eh, in a way they're not mutually exclusive. Look back at the dot com crash: it was all about things like online shopping, which we absolutely take for granted and use every day in 2025. Same for the video game crash in the 80s. They are both an overhyped bubble and and the dawn of a new era.
Readit News
- 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 companies.
- Since growth for these companies is accelerated, future revenue will be brought forward for nvidia and since these investments must be spent on nvidia gpus it drives further lock in to their platform.
- Nvidia also benefits from growth due to the equity they own.
This is all dependent on token economics being or becoming profitable. Everything seems to indicate that once the models are trained, they are extremely profitable and that training is the big money drain. If these models become massively profitable (or at least break even) then I don't see how this doesn't benefit Nvidia massively.
Here's an idea: they could make actual GPUs used for games affordable again, and not have Jensen Huang lie on stage about their performance to justify their astronomical prices. Sure, companies might want to buy them for ML/AI and crash the market again but I'm sure a company of their caliber could solve that if they _really_ wanted to.
Yes, I’m certain they are spending an astronomical amount on that already, but why not more? Surely paying more money for construction of more facilities still nets gain even if you run into diminishing returns?
Instead they set up this whacko tax laundering scheme? Just seems like more corporate pocket filling to me, an idiot with no business knowledge.
Just give it a few years.
What is the actual value of a token? If it were generated by a human expert in a given field? This should set an upper limit for now.
aka this might be nvidia's next pivot. Contrary to gaming cards, the AI GPUs are productive assets. If nvidia feels that they will be very productive, then it makes sense that they invest broadly in the companies that are likely to make these profits. To share in the rewards while selling more GPUs.
Deleted Comment
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.
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.
The question is where the profits are.
Some data would reinforce your case. Do you have it?
Here is my data point: "You Have No Idea How Screwed OpenAI Actually Is" - https://wlockett.medium.com/you-have-no-idea-how-screwed-ope...
The practice was known as “zaitech”
> zaitech - financial engineering
> In 1984, Japan’s Ministry of Finance permitted companies to operate special accounts for their shareholdings, known as tokkin accounts. These accounts allowed companies to trade securities without paying capital gains tax on their profits.
> At the same time, Japanese companies were allowed to access the Eurobond market in London. Companies issued warrant bonds, a combination of traditional corporate bonds with an option (the “warrant") to purchase shares in the company at a specified price before expiry. Since Japanese shares were rising, the warrants became more valuable, allowing companies to issue bonds with low-interest payments.
> The companies, in turn, placed the money they raised into their tokkin accounts that invested in the stock market. Note the circularity: companies raised money by selling warrants that relied on increasing stock prices, which was used to buy more shares, thus increasing their gains from investing in the stock market.
https://www.capitalmind.in/insights/lost-decades-japan-1980s...
OpenAI applies the same strategy, but they’re using their equity to buy compute that is critical to improving their core technology. It’s circular, but more like a flywheel and less like a merry-go-round. I have some faith it could go another way.
But we know that growth in the models is not exponential, its much closer to logarithmic. So they spend =equity to get >results.
The ad spend was a merry go round, this is a flywheel where the turning grinds its gears until its a smooth burr. The math of the rising stock prices only begins to make sense if there is a possible breakthrough that changes the flywheel into a rocket, but as it stands its running a lemonade stand where you reinvest profits into lemons that give out less juice
If they don't then they're spending a ton of money to level up models and tech now, but others will eventually catch up and their margins will vanish.
This will be true if (as I believe) AI will plateau as we run out of training data. As this happens, CPU process improvements and increased competition in the AI chip / GPU space will make it progressively cheaper to train and run large models. Eventually the cost of making models equivalent in power to OpenAI's models drops geometrically to the point that many organizations can do it... maybe even eventually groups of individuals with crowdfunding.
OpenAI's current big spending is helping bootstrap this by creating huge demand for silicon, and that is deflationary in terms of the cost of compute. The more money gets dumped into making faster cheaper AI chips the cheaper it gets for someone else to train GPT-5+ competitors.
The question is whether there is a network effect moat similar to the strong network effect moats around OSes, social media, and platforms. I'm not convinced this will be the case with AI because AI is good at dealing with imprecision. Switching out OpenAI for Anthropic or Mistral or Google or an open model hosted on commodity cloud is potentially quite easy because you can just prompt the other model to behave the same way... assuming it's similar in power.
There are physical products involved, but the situation otherwise feels very similar to ads prior to dotcom.
I'm commenting here in case a large crash occurs, to have a nice relic of the zeitgeist of the time.
https://time.com/archive/6931645/how-the-once-luminous-lucen...
The customers bought real equipment that was claimed to be required for the "exponential growth" of the Internet. It is very much like building data centers.
That's only like 1/8th of the flywheel, though.
The other difference (besides Sam's deal making ability) is, willing investors: Nvidia's stock rally leaves it with a LOT of room to fund big bets right now. While in Oracle's case, they probably see GenAI as a way to go big in the Enterprise Cloud business.
It is at the very least highly debatable how much their core technology is improving from generation to generation despite the ballooning costs.
I wonder how they felt during the .com era.
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2020: https://www.youtube.com/watch?v=rpiZ0DkHeGE 2019: https://www.cadtm.org/spip.php?page=imprimer&id_article=1732...
Dead Comment
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 freaking out now. If you believe the AI is rebuilding compute then this changes our compute paradigm in the future. As well as long as we don't get an over leveraged build out without revenue coming in the door. I think we are seeing a lot of revenue come in for certain applications.
The companies that are all smoke and mirrors built on chatGPT with little defensibility are probably the same as the ones you are referring to in the current era. Or the AI tooling companies.
To be clear circular deal flow is not a good look.
I can see the both sides of bull and bear at this moment.
https://www.theregister.com/2025/10/29/microsoft_earnings_q1...
Microsoft seemingly just revealed that OpenAI lost $11.5B last quarter
This money is well beyond VC capability.
Either this lets them build to net positive without dying from painful financing terms or they explode spectacularly. Their rate of adoption it seems to be the former.
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What's crazy is that with the 2021 changes to IRC § 174 most software r&d spending is considered capital investment and can't be immediately expensed. Has to be amortized over 5 years.
I don't know how that 11.5B number was derived, but I would wager that the net loss on income statement is a lot lower than the net negative cash flow on cash flow statement.
If that 11.5B is net profit/loss, then whatever the portion of the expense part of the calculation that's software R&D could be 5x larger if it weren't for the new amortization rule.
I do think this is going to be a deeply profitable industry, but this feels a little like the WeWork CEO flying couches to offices in private jets
Rivian stock is down 90%, and I fairly regularly read financial news about it having bad earnings, stock going even lower, worst-in-industry reliability, etc etc.
I don't know why you don't hear about it, but it might be because it's already looking dead in the water so there's no additional news juice to squeeze out of it.
I found there was more than just couches on the WeWork private jets:
https://www.inverse.com/input/tech/weworks-adam-neumann-got-...
1. Performance of AI tools improving but marginally so in practice 2. If human labor was replaced, it's the start of global societal collapse so any winnings would be moot.
We had an impressive new technology (the Web), and everyone could see it was going to change the world, which fueled a huge gold rush that turned into a speculative bubble. And yes, ultimately the Web did change the world and a lot of people made a lot of money off of it. But that largely happened later, after the bubble burst, and in ways that people didn't quite anticipate. Many of the companies people were making big bets on at the time are now fertile fodder for YouTube video essays on spectacular corporate failures, and many of the ones that are dominant now were either non-existent or had very little mindshare back in the late '90s.
For example, the same year the .com bubble burst, Google was a small new startup that failed to sell their search engine to Excite, one of the major Web portal sites at the time. Excite turned them down because they thought $750,000 was too high a price. 2 years later, after the dust had started to settle, Excite was bankrupt and Google was Google.
And things today sure do strike me as being very similar to things 25, 30 years ago. We've got an exciting new technology, we've got lots of hype and exuberant investment, we've got one side saying we're in a speculative bubble, and the other side saying no this technology is the real deal. And neither side really wants to listen to the more sober voices pointing out that both these things have been true at the same time many times in the past, so maybe it's possible for them to both be true at the same time in the present, too. And, as always, the people who are most confident in their ability to predict the future ultimately prove to be no more clairvoyant than the rest of us.
For Microsoft, and the other hyperscalers supporting OpenAI, they're all absolutely dependent on OpenAI's success. They can realistically survive through the difficult times, if the bubble bursts because of a minor player - for example if Coreweave or Mistral shuts down. But if the bubble bursts because the most visible symbol of AI's future collapses, the value-destruction for Microsoft's shareholders will be 100x larger than OpenAI's quarterly losses. The question for Microsoft is literally as fundamental as "do we want to wipe $1tn off our market cap, or eat $11bn losses per quarter for a few years?" and the answer is pretty straightforward.
Altman has played an absolute blinder by making the success of his company a near-existential issue for several of the largest companies to have ever existed.
Fascinating! I unearthed the TL;DR for anyone else interested:
* WeWork purchased a $60 million Gulfstream G650ER private jet for Neumann's use.
* The G650ER was customized with two bedrooms and a conference table.
* Neumann used the jet extensively for global travel, meetings, and family trips.
* The jet was also used to transport items like a "sizable chunk" of marijuana in a cereal box, which might be worse and more negligent than couches.
Sources:
https://www.vanityfair.com/hollywood/2022/03/adam-neumann-re...
https://nypost.com/2021/07/17/the-shocking-ways-weworks-ex-c...
ChatGPT was mind blowing when you first used it. WeWork is a real estate play fronted by a self aggrandizing self dealing CEO.
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This comment is pretty depressing but it seems to be the path we're headed to:
> It's bad enough that people think fake videos are real, but they also now think real videos are fake. My channel is all wildlife that I filmed myself in my own yard, and I've had people leaving comments that it's AI, because the lighting is too pretty or the bird is too cute. The real world is pretty and cute all the time, guys! That's why I'm filming it!
Combine this with selecting only what you want to believe in and you can say that video/image that goes against your "facts" is "fake AI". We already have some people in pretty powerful positions doing this to manipulate their bases.
You don't have to be vague. Let's be specific. The President of the United States implied a very real voiceover of President Reagan was AI. Reagan was talking about the fallacy of tariffs as engines of economic growth, and it was used in an ad by the government of Ontario to sow divide within Republicans. It worked, and the President was nakedly mad at being told by daddy Reagan.
This is an example of how people viscerally hate anyone passing off AI generated images and video as real.
https://youtu.be/Q0TpWitfxPk
He also has a podcast called Better Offline, which is slightly too ad heavy for my taste. Nevertheless, with my meagre understanding of the large corporate finances I was not able to find any errors in his core argument regardless of his somewhat sensationalist style of writing.
https://bsky.app/profile/notalawyer.bsky.social/post/3ltkami...
Depending on your POV OpenAI and the surrounding AI hype machine is at the extremes either the dawn of a new era, or a metastasized financial cancer that’s going to implode the economy. Reality lies in the middle, and nobody really knows how the story is going to end.
In my personal opinion, “financial innovation” (see: the weird opaque deals funding the frantic data center construction) and bullshit like these circular deals driving speculation is a story we’ve seen time and time again, and it generally ends the same way.
An organization that I’m familiar with is betting on the latter - putting off a $200M data center replacement, figuring they’ll acquire one or two in 2-3 years for $0.20 on the dollar when the PE/private debt market implodes.
The argument to moderation/middle ground fallacy is a fallacy.
https://en.wikipedia.org/wiki/Argument_to_moderation
Eh, in a way they're not mutually exclusive. Look back at the dot com crash: it was all about things like online shopping, which we absolutely take for granted and use every day in 2025. Same for the video game crash in the 80s. They are both an overhyped bubble and and the dawn of a new era.
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