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> Their measured performance on things people care about keep going up, and their software stack keeps getting better and unlocking more performance on existing

by roughly 9mo ago

> Their measured performance on things people care about keep going up, and their software stack keeps getting better and unlocking more performance on existing hardware I'm more concerned about fully-loaded dollars per token - including datacenter and power costs - rather than "does the chip go faster." If Nvidia couldn't make the chip go faster, there wouldn't be any debate, the question right now is "what is the cost of those improvements." I don't have the answer to that number, but the numbers going around for the costs of new datacenters doesn't give me a lot of optimism. > Is that based just on the HN "it is lots of money so it can't possibly make sense" wisdom? OpenAI has $1.15T in spend commitments over the next 10 years: https://tomtunguz.com/openai-hardware-spending-2025-2035/ https://tomtunguz.com/openai-hardware-spending-2025-2035/ As far as revenue, the released numbers from nearly anyone in this space are questionable - they're not public companies, we don't actually get to see inside the box. Torture the numbers right and they'll tell you anything you want to hear. What we _do_ get to see is, eg, Anthropic raising billions of dollars every ~3 months or so over the course of 2025. Maybe they're just that ambitious, but that's the kind of thing that makes me nervous.

nl 9mo ago
> OpenAI has $1.15T in spend commitments over the next 10 years Yes, but those aren't contracted commitments, and we know some of them are equity swaps. For example "Microsoft ($250B Azure commitment)" from the footnote is an unknown amount of actual cash. And I think it's fair to point out the other information in your link "OpenAI projects a 48% gross profit margin in 2025, improving to 70% by 2029."
- roughly 9mo ago
  > "OpenAI projects a 48% gross profit margin in 2025, improving to 70% by 2029." OpenAI can project whatever they want, they're not public.
  - brookst 9mo ago
    They still have shareholders who can sue for misinformation. Private companies do have a license to lie to their shareholders.
- re-thc 9mo ago
  > Yes, but those aren't contracted commitments, and we know some of them are equity swaps. It's worse than not contracted. Nvidia said in their earnings call that their OpenAI commitment was "maybe".
- ironbound 9mo ago
  Sounds like the railway boom.. I mean bond scam's
- short_sells_poo 9mo ago
  The fact that there's an incestual circle between OpenAI, Microsoft, NVidia, AMD, etc.. where they provide massive promises to each other for future business is nothing short of hilarious. The economics of the entire setup are laughable and it's obvious that it's a massive bubble. The profit that'd need to be delivered to justify the current valuations is far beyond what is actually realistic. What moat does OpenAI have? I'd argue basically none. They make extremely lofty forecasts and project an image of crazy growth opportunities, but is that going to ever survive the bubble popping?
  - philipallstar 9mo ago
    I still don't really understand this "circle" issue. If I fix your bathroom and in return you make me a new table, is that an incestuous circle? Haven't we both just exchanged value?
    - CodesInChaos 9mo ago
      The circle allows you to put an arbitrary "price" on those services. You could say that the bathroom and table are $100 each, so your combined work was $200. Or you could claim that each of you did $1M work. Without actual money flowing in/out of your circle, your claims aren't tethered to reality.
      - brookst 9mo ago
        You don’t think real money is changing hands when Microsoft buys Nvidia GPUs?
        short_sells_poo 9mo ago
        It's a soft version of money printing basically. These firms are clearly inflating each other's valuations by making huge promises of future business to each other. Naively, one would look at the headlines and draw the conclusion that much more money is going to flow into AI in the near future. Of course, a rational investor looks at this and discounts the fact that most of those promises are predicated on insane growth that has no grounding in reality. However, there are plenty of greedy or irrational investors, whose recklessness will affect everyone, not just them.
YetAnotherNick 9mo ago
GPUs are supply constrained and price isn't declining that fast so why do you expect the token price price to decrease. I think the supply issue will resolve in 1-2 years as now they have good prediction of how fast the market would grow. Nvidia is literally selling GPUs with 90% profit margin and still everything is out of stock, which is unheard of before.
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by roughly 9mo ago

nl 9mo ago

> OpenAI has $1.15T in spend commitments over the next 10 years Yes, but those aren't contracted commitments, and we know some of them are equity swaps. For example "Microsoft ($250B Azure commitment)" from the footnote is an unknown amount of actual cash. And I think it's fair to point out the other information in your link "OpenAI projects a 48% gross profit margin in 2025, improving to 70% by 2029."

roughly 9mo ago
> "OpenAI projects a 48% gross profit margin in 2025, improving to 70% by 2029." OpenAI can project whatever they want, they're not public.
- brookst 9mo ago
  They still have shareholders who can sue for misinformation. Private companies do have a license to lie to their shareholders.
re-thc 9mo ago
> Yes, but those aren't contracted commitments, and we know some of them are equity swaps. It's worse than not contracted. Nvidia said in their earnings call that their OpenAI commitment was "maybe".
ironbound 9mo ago
Sounds like the railway boom.. I mean bond scam's
short_sells_poo 9mo ago
The fact that there's an incestual circle between OpenAI, Microsoft, NVidia, AMD, etc.. where they provide massive promises to each other for future business is nothing short of hilarious. The economics of the entire setup are laughable and it's obvious that it's a massive bubble. The profit that'd need to be delivered to justify the current valuations is far beyond what is actually realistic. What moat does OpenAI have? I'd argue basically none. They make extremely lofty forecasts and project an image of crazy growth opportunities, but is that going to ever survive the bubble popping?
- philipallstar 9mo ago
  I still don't really understand this "circle" issue. If I fix your bathroom and in return you make me a new table, is that an incestuous circle? Haven't we both just exchanged value?
  - CodesInChaos 9mo ago
    The circle allows you to put an arbitrary "price" on those services. You could say that the bathroom and table are $100 each, so your combined work was $200. Or you could claim that each of you did $1M work. Without actual money flowing in/out of your circle, your claims aren't tethered to reality.
    - brookst 9mo ago
      You don’t think real money is changing hands when Microsoft buys Nvidia GPUs?
      - short_sells_poo 9mo ago
        It's a soft version of money printing basically. These firms are clearly inflating each other's valuations by making huge promises of future business to each other. Naively, one would look at the headlines and draw the conclusion that much more money is going to flow into AI in the near future. Of course, a rational investor looks at this and discounts the fact that most of those promises are predicated on insane growth that has no grounding in reality. However, there are plenty of greedy or irrational investors, whose recklessness will affect everyone, not just them.

YetAnotherNick 9mo ago

GPUs are supply constrained and price isn't declining that fast so why do you expect the token price price to decrease. I think the supply issue will resolve in 1-2 years as now they have good prediction of how fast the market would grow. Nvidia is literally selling GPUs with 90% profit margin and still everything is out of stock, which is unheard of before.

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