I bet Enron also claimed it wasn't Enron.

In some ways the victim of their own success, that's just the way this system is built, for better or worse (mostly worse). The incentives drive the behaviour, but the architecture is hostile in nature, so it's hard to have different outcomes at a certain level. Infinite growth is literal cancer.

You can't steal from employee pensions if you don't offer a pension

Especially since they made the comparison on their own! Relevant article: https://www.wheresyoured.at/nvidia-isnt-enron-so-what-is-it/

Yeah. Enron's scheme was trading money back and forth with itself to inflate its value until it all came crashing down, tanking Enron.

Nvidia is at the center of a scheme involving the entire economy trading money back and forth between a few companies to inflate value, so when the scheme tanks it'll crush everybody.

Man that reminds me of an old comic where two guys give each other the same $50,000 back and forth to eat horse shit and in the end their like, "we just created two jobs and grew GDP by $100,000!" Lol

hot potatoes, but they do need someone to hold on to that 100bn debt, usually other industries outside the tech sector. thats why they peddle it so hard to trump, to be used with palintir, and then other services.

Enron crashed because they were cooking their books and faking income, declaring potential profit where none existed

• Sell chips to X

• Receive stock in X

• Value of stocks = discounted sum of future (fake) income

• Booked as an asset on the balance sheet

This is exactly like Enron but the underlying commodity isn't energy, it's compute.

NVIDIA is producing and delivering GPUs. However this does NOT translate into income, and that's what's making it shady. These companies are paying in shares that will be worth nothing when it pops.

It depends on the customer. Microsoft, Google, Amazon all have the revenue to carry the debts they are taking on. Oracle, Chat GPT, Musk and others are waay more sketchy.

The build out is going to take billions of dollars and these companies aren’t going to see a return for at least 5 years or more. The majors can carry that kind of debt load long term even if AI doesn’t pan out. Other businesses will struggle or go under if AI doesn’t bring the returns.

The next major movers will be companies that do a lot of IT business consulting like IBM. They are going to be busy helping non IT focused firms incorporate AI into their business model.

Finally if all these data centers pan out and the US keeps oscillating between shunning Renewables or Fossil fuels every time a new party comes to office we are going to have major problems with our energy infrastructure. Think energy bills as high as your mortgage within the next 5 years. Invest in utilities or energy companies and try to put solar and some kind of storage on your home.

It's all of Nvidia's customers that are mini-Enrons.

I don't think that those are faking profit. Well, I don't have some comprehensive list, and maybe somewhere someone is, but not for the majority of purchases. It's possible that they won't wind up being long-term profitable, but there isn't fraud involved in that.

I don't think that the Enron analogy is very applicable in general. Like, what people who are critical of the extent of AI investment are worried about is analogous to the dot-com bubble, where the returns to investors from companies didn't warrant the level of investment and stock prices for many companies shot way up and then fell back down.

EDIT: It's fair to say that Nvidia is driving demand for its products. But..that may be quite sensible, since if you have a killer app or two explode, it can drive massive demand for the hardware that runs it. If you have capital available and control the best hardware out there, it may well make more sense to use that capital on building more demand for your product than to go and try and improve the product more. There's only so many chip engineers available that Nvidia can hire, and unless they want to get into the "writing AI software" game themselves, which would have them compete with their customers, I'd think that that's potentially a reasonable place to put their capital if they're trying to improve their business potential.

Nvidia sold a lot of hardware when cryptocurrency became popular. I think that it's probably fairly safe to say that AI applications have considerably more potential to provide utility than does cryptocurrency.

OPENAI is probably the one that will be set to lose the most, and then oracle? i dont know if palintir fits into this, but THEIls company have been desperately trying to peddle his services to multiple countries already.

Enron 2.0, bigger, faster, better.

What if it's not a bubble?

So I tried using some AI chatbots to find a movie recently, it made up a few, none being the answer.

(The question was about a historical movie, made in perhaps 1970s by the feeling, set someplace in southern France somewhere around 1650s, has a few beautiful views of nature and castles ; one scene where a guard captain enters a room, asks a question, as a power gesture drinks a glass of wine on the table and a minute later falls ; another scene where for whatever reason a rapier fight happens in something like a tavern, two women in pastel dresses are descending by an open ladder from the second floor, seeing the brawl take our pocket pistols, one of them is stabbed with a rapier ; another scene where a guy is getting questioned with his feet over the fire ; another when another guy is climbing a tower clinging at brick mortars outside and hears guards' boots on the ladder very loudly ; when I was a kid and saw that, someone said it's an adaptation of something by Lope de Vega, but I'm not sure that's correct ; that's just in case someone reading this knows such a movie.)

But some googling sessions they do optimize, without you the user ever having to browse a webpage, and just getting a textual answer. That's a valid use.

And some other processes. They don't have to be useful for all things they are applied to, just some profitable.

Nvidia is Cisco in this analogy

openai has practically no value and that’s well known… nvidia is paying companies to buy their chips and playing bullshit shell games

the difference is openai is a pretty well known unprofitable company, and they aren’t doing quite as much of the bullshit shell games. nvidia is selling to basically everyone, taking stakes in companies, giving weird deals… it’s bloody impossible to track how much of their sales are real and how much those real sales are actually worth, or if those sales are loss leaders for some investment then those investments look a lot like openai

so nvidia not only is invested in a lot of very questionable AI bubble companies, but also their own sales figures are… unreliable

they’re making billions upon billions because they’re using their own money multiple times. it’s kinda like leveraged trading with all the risk and it’s incredible arrogant at the scale that nvidia is doing it

If you want to get advantage from a speculative fund making a bet on a popped bubble, then you need to be already invested now, before the bubble bursts. (And also, you/your fund need to be right that it’s really about to pop now, and not later)

Once the race is over it’s too late to bet on the ponies.

LinkedIn perverts could write long screeds about AI..

Lmao

It's a bad position to be in. If they crash it will be bad, but if they keep growing and then crash it could be worse.

America is about to learn the lesson Nortel taught Canada.

LOSE

Steam can do massive numbers spikes because they have essentially infinite inventory. The whole reason scalping video cards works is that Nvidia can not make as many as people want, even at full retail price. The existence of scalpers implies that Nvidia could raise prices, sell slightly fewer units at higher margin and get greater total return.

You can never be too big to fail

P.S. No, I'm not saying that Nvidia's going bankrupt

Nvidia has competitive edge. They won't go bankrupt but they they will undermined heavily when the AI bubble pops.

Nvidia has cuda. Most ai only used cuda so only uses nvidia, but people are working too get over that particular moat

hes probably stressing out in behind the scenes.