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[–] 98 points 9 months ago (18 children)

You'll know because when it dies it's going to cause a huge market crash and take a shit ton of other companies with it...

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  • [–] 14 points 9 months ago (12 children)

    And possibly the most parts of shadow banking, i.e the alt accounts of major financial institutions.

    Fun times ahead!

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  • [–] 23 points 9 months ago (11 children)

    Not really...

    The reason it will domino is AI companies can't afford the hardware, so Nvidia "invests" in AI companies and trades hardware for shares.

    They have like 100 billion just in OpenAI, which they're leveraging into loans to make more of the chips no one can afford.

    If openai goes down, the banks call in the loans Nvidia has openai for collateral. So then Nvidia will have to sell all their other shares of other AI companies to cover the loans, and likely will have to drastically cut production of AI chips, driving the cost up.

    Now all those other AI companies that Nvidia just sold, can't afford the higher price, because they couldn't afford a subsidized price along with shares.

    As those companies fold, it makes even less people who would even want to buy those AI chips at any prices, driving Nvidia further down and maybe all the way to bankrupt

    That's when it starts fucking with index funds and the wider market

    But all those shadow banks won't really get hit. They're not holding stocks to make money, they're buried treasure chests filled with liquid assets in case of emergency. The only way they'd be hit is if the currency they're held in collapses. Even then, that method almost always includes safety deposit boxes with precious metals/jewels to account for that

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  • [–] 6 points 9 months ago

    The problem is that it isn't clear what kinds of exposure private credit and other actors in the shadow banking space hold, because they generally operate on a model of financial obfuscation to get around banking regulation (i.e. being actual banks). What is known is that they are deeply intertwined with financing the AI bubble, even if all their exposure is through debt instruments, crypto schemes or insurance contracts (that probably is not the full scope though), they will be hit hard when their "borrowers" can't pay back.

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  • [–] 4 points 9 months ago (7 children)

    That’s a very interesting deep dive. Didn’t mind this wall of text at all.

    Is AMD also involved in the same shenanigans? Sounds like the AI bubble pop could also mess up the GPU market.

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  • [–] 4 points 9 months ago (3 children)

    They are but not to the same degree as Nvidia.

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  • [–] 3 points 9 months ago (2 children)

    Maybe AMD is betting on NVIDIA suffering more from the oncoming crash. If that happens, AMD could increase their market share.

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  • [–] 2 points 9 months ago (1 child)

    Their presentation at CES was as focused on enterprise AI as Nvidias was.

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  • [–] 1 point 9 months ago

    Well, that’s the public-facing side of the story. Lending GPUs to AI startups seems like a pretty risky strategy. If NVIDIA is lending out a lot of hardware, while AMD isn’t, that puts these companies in very different positions.

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  • [–] 3 points 9 months ago

    AMD is largely left behind. They are trying real hard to pitch their MI products as an nvidia alternative, but no one is biting. Strangely some of their line is even more exotic to try to host than the highest end Nvidia gear.

    So they are relatively less exposed to a crash than nVidia. On top of not doing that lending to their customers...

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  • [–] 28 points 9 months ago (1 child)

    I just want to add that the crash will take down the entire economy, not just AI and tech companies.

    Simply by subtracting AI companies from the equation, the US is already in a pretty substantial recession. The process of them crashing out will make that even worse.

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  • [–] 3 points 9 months ago

    Thanks for noting this. People get all gleeful without knowing how connected everything is. The other thing I like to remind them is that fatcat bankers aren’t the only ones invested in the stock market. Regular people with 401ks or college savings set aside for their kid are exposed as well.

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  • [–] 40 points 9 months ago (15 children)
  • [–] 11 points 9 months ago (3 children)

    I got a PC with everything except the gpu for 250 euro. It has 32gbs of ram, albeit ddr4, very good deal after all. Thanks marktplaats

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  • [–] 7 points 9 months ago (2 children)

    Now, where did you got the motherboard with 32 slots for ddr1 ram?

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  • [–] 3 points 9 months ago (7 children)

    Sorry I'm a stupid Murican, what does 584,- mean?

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  • [–] 3 points 9 months ago (3 children)
  • [–] 25 points 9 months ago (4 children)

    Keep an eye on the trump family investments, when they dump a load of shares the bubble will burst tomorrow

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  • [–] 24 points 9 months ago (3 children)

    That’s the thing about this bubble. Most of the companies involved aren’t public. The only public company is nvidia, but they’re just selling shovels to the gold prospectors. (Though, they’re giving money to the prospectors to buy the shovels, which is criminal at best.) Oracle is public too but they’re on the periphery.

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  • [–] 8 points 9 months ago (1 child)

    What a great little site. It reminds me of istheshipstillstuck.com. I'm bookmarking that shit. Thanks, OP!

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  • [–] 7 points 9 months ago (2 children)

    And unlike Wolverine, please stay dead when you get there.

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  • [–] 5 points 9 months ago (1 child)

    It'll never die. It'll take it's ram and what not and become a hedge fund (a lá GameStop) it's only purpose will be to upset me personally.

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  • [–] 4 points 9 months ago

    Well I guess if we find out that RDIMM modules get incredibly cheap, then OpenAI is dead, but if it’s alternatively SOCAMM modules, unfortunately they aren’t.

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  • [–] 2 points 9 months ago

    Price of NAS HDD I am monitoring, went up 1% in past week in ongoing trend (over 20% over the past ~4 months).
    I'd say BIG AI is still steaming.

    No idea about OpenAI, specifically.

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