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If this means that the fall of OpenAI will cause Oracle and Nvidia to crash and downsize, bubbles aren't completely bad.

re-thc 1y ago
> If this means that the fall of OpenAI will cause Oracle and Nvidia to crash and downsize Only if those are the only actual real customers. It's not. The pie is a lot bigger. And with the current hype some other AI company will just take over and the bubble will continue.
passwordoops 1y ago
You can't discount the impact this will have on global stock markets and what that may do to both individuals and, more importantly, pension funds, as a large swath of people are retiring
- HelloNurse 1y ago
  Damage is unavoidable, we can only hope that it happens to someone deserving. Innocent individuals and pension funds still have time to retreat; if they don't it will be their fault.
  - azan_ 1y ago
    We are moving towards gerontocracy - if pension funds will have large losses it’s very likely that young, working age people will be taxed extra heavily to keep the QOL of pensioners.
    - zmgsabst 1y ago
      That would likely lead to a revolution: Millennials are 30-45 and they’re not in a good place; neither is Gen Z. We’re already seeing revolutions elsewhere — and it’s likely that trying to loot them further by generations who sold out the nation will simply lead to social collapse.
      - jfil 1y ago
        Have you ever battled an 87-year-old wearing mechanized battle armour? They're crazed, hopped on speed, eyes goggling in their sockets A pack of 3 oldies burst through our perimeter one winter night... the screaming woke me up. Outside my tent the forest was lit up red by our laser blasts, trying desparately to take them out. We thought that a revolution would be a good idea, but an upside-down population pyramid is a hell of a thing when you're on the bottom.
- mnky9800n 1y ago
  Yes but this is by design. Wealthy people want bubbles, when they pop, you can gobble up all the value at all time lows. Then you hold until you don't feel like it anymore as the market goes back to growing. You see this as how private equity has bought up real estate across the USA to turn into rentals after 2008, for example.
  - azan_ 1y ago
    Aren’t extremely wealthy people that wealthy due to the valuation of their stock? IIRC generally the higher the networth, the higher share is kept in stocks
    - markus_zhang 1y ago
      I suspect $$ is just a number for them. Being able to control more resources is the ultimate game. You gotta have zillions of $$ to join the tournament, though.
    - cjrp 1y ago
      They can move their wealth from stocks to gold, for example. Look at the price of gold.
      - lesuorac 1y ago
        More importantly you keep the portfolio semi-balanced. Just using Google / Gold as a comparison [1]. Assume you have 100 units of each. In late 2021, Googs gone up ~100% so you have to rebalance because you have $200 in Goog and $92 in Gold. So lets say you rebalance to 80 Goog (160$) and 144 Gold ($130). In late 2022, Googs gone down ~40% so you have to rebalance because you have $96 in Goog and $141 in Gold. So lets say you rebalance to 100 Goog ($120) and 118 Gold ($112). So over the course of 2 years Goog has gone up 20% and Golds gown down 5% but your investments are overall up 16%. Obviously a 100% Goog investment is higher but with more risk. If you didn't do any rebalancing then you have a gain of 7.5% (100*1.2 + 100*0.95 = 215) [1]: https://www.google.com/finance/beta/quote/PHYS:TSE?comparison=GOOG%3ANASDAQ&type=line&window=5Y https://www.google.com/finance/beta/quote/PHYS:TSE?compariso...
- limpbizkitfan 1y ago
  Perhaps most of the impact could be burdened on NVIDIA investors, employees, leadership, or OpenAI investors, employees, leadership, etc., etc.
sailfast 1y ago
Sure who cares if we wipe out 15% of everyone’s retirement right as long as it’s got some schadenfreude involved.
- somenameforme 1y ago
  I doubt, or at least hope, that no sort of managed fund for retirement (read: low risk) is going 15% on AI stuff. Regardless of what one thinks might happen, it has to be accepted at this is an obviously very high risk bet, because this all is screaming bubble even more than the era of 'zomg i flipped this house i financed on an insta-approved loan, installed granite counter tops, and walked away with $20k profit in 4 days.'
  - kelvinjps10 1y ago
    But probably they will invest in the sp500, and tech companies make a big portion of the sp 500 and these tech companies also happen to be big in AI
    - arielcostas 1y ago
      Failing to diversify is the fund managers' problem. Pension funds shouldn't have all their investment in a single countries' stock market (doesn't matter that most, if not all, of those companies operate worldwide, they are still from the US), not even in equity markets. A wiser investment manager (or individual investor) would put a chunk in different kind of equities, and diversify into fixed rate, precious metals, perhaps real estate... Not bet it all to the volatile S&P 500. "Past performance does not guarantee future results.".
- overfeed 1y ago
  Who's "we"? Most of us have zero say when the backroom circular deals are made.
- pfannkuchen 1y ago
  If it’s a bubble, then the long term value people are now counting on to retire with in the future is not actually real though, right? Like a bubble popping doesn’t destroy real value that used to exist, it exposes fictional value that never really existed.
xgkickt 1y ago
Where does that leave AMD, considering OAI are taking a 10% stake?
- overfeed 1y ago
  A shareholder going bust is a no-op. However, the loss of large customer, is concerning, but less so, relative to the market souring on AI investments as a whole, which would be not great for AMD, but disastrous for Nvidia.
  - xgkickt 1y ago
    They'd just pitch for using the same GPUs to run the digital dollar ledger, and begin the cycle again, maybe.

re-thc 1y ago

> If this means that the fall of OpenAI will cause Oracle and Nvidia to crash and downsize Only if those are the only actual real customers. It's not. The pie is a lot bigger. And with the current hype some other AI company will just take over and the bubble will continue.

passwordoops 1y ago

You can't discount the impact this will have on global stock markets and what that may do to both individuals and, more importantly, pension funds, as a large swath of people are retiring

HelloNurse 1y ago
Damage is unavoidable, we can only hope that it happens to someone deserving. Innocent individuals and pension funds still have time to retreat; if they don't it will be their fault.
- azan_ 1y ago
  We are moving towards gerontocracy - if pension funds will have large losses it’s very likely that young, working age people will be taxed extra heavily to keep the QOL of pensioners.
  - zmgsabst 1y ago
    That would likely lead to a revolution: Millennials are 30-45 and they’re not in a good place; neither is Gen Z. We’re already seeing revolutions elsewhere — and it’s likely that trying to loot them further by generations who sold out the nation will simply lead to social collapse.
    - jfil 1y ago
      Have you ever battled an 87-year-old wearing mechanized battle armour? They're crazed, hopped on speed, eyes goggling in their sockets A pack of 3 oldies burst through our perimeter one winter night... the screaming woke me up. Outside my tent the forest was lit up red by our laser blasts, trying desparately to take them out. We thought that a revolution would be a good idea, but an upside-down population pyramid is a hell of a thing when you're on the bottom.
mnky9800n 1y ago
Yes but this is by design. Wealthy people want bubbles, when they pop, you can gobble up all the value at all time lows. Then you hold until you don't feel like it anymore as the market goes back to growing. You see this as how private equity has bought up real estate across the USA to turn into rentals after 2008, for example.
- azan_ 1y ago
  Aren’t extremely wealthy people that wealthy due to the valuation of their stock? IIRC generally the higher the networth, the higher share is kept in stocks
  - markus_zhang 1y ago
    I suspect $$ is just a number for them. Being able to control more resources is the ultimate game. You gotta have zillions of $$ to join the tournament, though.
  - cjrp 1y ago
    They can move their wealth from stocks to gold, for example. Look at the price of gold.
    - lesuorac 1y ago
      More importantly you keep the portfolio semi-balanced. Just using Google / Gold as a comparison [1]. Assume you have 100 units of each. In late 2021, Googs gone up ~100% so you have to rebalance because you have $200 in Goog and $92 in Gold. So lets say you rebalance to 80 Goog (160$) and 144 Gold ($130). In late 2022, Googs gone down ~40% so you have to rebalance because you have $96 in Goog and $141 in Gold. So lets say you rebalance to 100 Goog ($120) and 118 Gold ($112). So over the course of 2 years Goog has gone up 20% and Golds gown down 5% but your investments are overall up 16%. Obviously a 100% Goog investment is higher but with more risk. If you didn't do any rebalancing then you have a gain of 7.5% (100*1.2 + 100*0.95 = 215) [1]: https://www.google.com/finance/beta/quote/PHYS:TSE?comparison=GOOG%3ANASDAQ&type=line&window=5Y https://www.google.com/finance/beta/quote/PHYS:TSE?compariso...
limpbizkitfan 1y ago
Perhaps most of the impact could be burdened on NVIDIA investors, employees, leadership, or OpenAI investors, employees, leadership, etc., etc.

sailfast 1y ago

Sure who cares if we wipe out 15% of everyone’s retirement right as long as it’s got some schadenfreude involved.

somenameforme 1y ago
I doubt, or at least hope, that no sort of managed fund for retirement (read: low risk) is going 15% on AI stuff. Regardless of what one thinks might happen, it has to be accepted at this is an obviously very high risk bet, because this all is screaming bubble even more than the era of 'zomg i flipped this house i financed on an insta-approved loan, installed granite counter tops, and walked away with $20k profit in 4 days.'
- kelvinjps10 1y ago
  But probably they will invest in the sp500, and tech companies make a big portion of the sp 500 and these tech companies also happen to be big in AI
  - arielcostas 1y ago
    Failing to diversify is the fund managers' problem. Pension funds shouldn't have all their investment in a single countries' stock market (doesn't matter that most, if not all, of those companies operate worldwide, they are still from the US), not even in equity markets. A wiser investment manager (or individual investor) would put a chunk in different kind of equities, and diversify into fixed rate, precious metals, perhaps real estate... Not bet it all to the volatile S&P 500. "Past performance does not guarantee future results.".
overfeed 1y ago
Who's "we"? Most of us have zero say when the backroom circular deals are made.
pfannkuchen 1y ago
If it’s a bubble, then the long term value people are now counting on to retire with in the future is not actually real though, right? Like a bubble popping doesn’t destroy real value that used to exist, it exposes fictional value that never really existed.

xgkickt 1y ago

Where does that leave AMD, considering OAI are taking a 10% stake?

overfeed 1y ago
A shareholder going bust is a no-op. However, the loss of large customer, is concerning, but less so, relative to the market souring on AI investments as a whole, which would be not great for AMD, but disastrous for Nvidia.
- xgkickt 1y ago
  They'd just pitch for using the same GPUs to run the digital dollar ledger, and begin the cycle again, maybe.