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This is truly bubble behavior. Open AI is losing billions of dollars and is only sustainable based on continued investor funding. Oracle is banking on money f

This is truly bubble behavior. Open AI is losing billions of dollars and is only sustainable based on continued investor funding. Oracle is banking on money from Open AI. All of the other BigTech public companies are investing in infrastructure from free cash flow.

more_corn 1y ago
So, when will the music stop? And will you recognize it when it does?
- orwin 1y ago
  So, interestingly, the same happened during the dot-com bubble, with less money though, but it kept the bubble afloat for around 6 months for a year (don't make any predictions about now, the amounts aren't the same, neither is global GDP percentage, and borrowing rate can fall to 0). Cisco and other infrastructure companies 'invested' in dot-com companies, who paid datacenter companies who paid Cisco and infrastructure companies. When you see Nvidia investing 100 billions into OpenAi who promised to Oracle at least 150 billions of investments (which means oracle RTO on 10 year is like 400 billion now, around 4x what it was before Nvidia investment), and Oracle will buy its chips, which are the cost driver for AI datacenter, from Nvidia. Which is probably the most circular economy-like capitalism can do, in a way, as a leftist I should be happy.
- scarface_74 1y ago
  That’s the beauty of it this time. Money losing companies are staying private and the only public companies that are involved in the Ponzi scheme seem to be Oracle and to a lesser extent Nvidia. But at least Nvidia is not borrowing money for its investments. Of course Tesla. But it’s always been a meme stock. I don’t see the AI bubble busting and it affecting the S&P 500 that much. Even before AI, the other public tech companies have real business and AI will be a “sustaining innovation” (see Clay Christenson). For me personally, Gen AI is just another tool in my tool belt when I implement projects - ie another AWS SDK service call (boto3/Bedrock). Yes if you have a pension, on the other hand, all bets are off since ther do invest in private equity unlike most defined contribution plans.
- rsynnott 1y ago
  When the debt markets and VCs stop increasing the amount of money they're willing to hand out (really, it wouldn't even take them stopping handing out money; the constant increases are necessary to keep the lights on). Probably slowly, then all at once, that's how these things usually go.

more_corn 1y ago

So, when will the music stop? And will you recognize it when it does?

orwin 1y ago
So, interestingly, the same happened during the dot-com bubble, with less money though, but it kept the bubble afloat for around 6 months for a year (don't make any predictions about now, the amounts aren't the same, neither is global GDP percentage, and borrowing rate can fall to 0). Cisco and other infrastructure companies 'invested' in dot-com companies, who paid datacenter companies who paid Cisco and infrastructure companies. When you see Nvidia investing 100 billions into OpenAi who promised to Oracle at least 150 billions of investments (which means oracle RTO on 10 year is like 400 billion now, around 4x what it was before Nvidia investment), and Oracle will buy its chips, which are the cost driver for AI datacenter, from Nvidia. Which is probably the most circular economy-like capitalism can do, in a way, as a leftist I should be happy.
scarface_74 1y ago
That’s the beauty of it this time. Money losing companies are staying private and the only public companies that are involved in the Ponzi scheme seem to be Oracle and to a lesser extent Nvidia. But at least Nvidia is not borrowing money for its investments. Of course Tesla. But it’s always been a meme stock. I don’t see the AI bubble busting and it affecting the S&P 500 that much. Even before AI, the other public tech companies have real business and AI will be a “sustaining innovation” (see Clay Christenson). For me personally, Gen AI is just another tool in my tool belt when I implement projects - ie another AWS SDK service call (boto3/Bedrock). Yes if you have a pension, on the other hand, all bets are off since ther do invest in private equity unlike most defined contribution plans.
rsynnott 1y ago
When the debt markets and VCs stop increasing the amount of money they're willing to hand out (really, it wouldn't even take them stopping handing out money; the constant increases are necessary to keep the lights on). Probably slowly, then all at once, that's how these things usually go.