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The $100B megadeal between OpenAI and Nvidia is on ice
- pinnochio 8mo agoAll these giant non-binding investment announcements are just a massive confidence scam.
- Drunkfoowl 8mo ago[dead]
- rvz 8mo agoWe know that it is all a grift before the inevitable collapse, so everyone is racing for the exit before that happens. I guarrantee you that in 10 years time, you will get claims of unethical conduct by those companies only after the mania has ended (and by then the claimants have sold all their RSUs.)
- aurareturn 8mo agoI don’t think so. I think it is positioning for the unknown future and hedging. For example, Amazon isn’t able to train its own models so it hedges by investing in Anthropic and OpenAI. Oracle, same with OpenAI deal. Nvidia wants to stay in OpenAI and Anthropic’s tech stack. It’s all jockeying for position.
- DebtDeflation 8mo agoOracle is a perfect example of using empty AI partnership announcements to goose the stock price and also a perfect example of how unsustainable of a strategy it is.
- pinnochio 8mo agoYou're explaining why they invest, not why they make pie-in-the-sky non-binding announcements. The point of those is to inflate the bubble and keep it going as long as they can.
- aurareturn 8mo agoThe non binding agreements is due to the implications of AI. No one knows for sure who will win or what will happen. These aren’t just fake agreements though. Oracle is building Stargate. Softbank’s investments are in OpenAI’s bank.
- glass1122 8mo ago[dead]
- wigster 8mo ago...and the merry go round stopped
- echelon 8mo agoNot for all the players. Not everyone has over-raised their fundamentals.
- ajross 8mo agoLiterally the whole economy has "over-raised its fundamentals" though. Not everyone is going to fail in exactly this way, but (again, pretty much literally) everyone is exposed to a feedback-driven crash from "everyone else" that ended up too exposed. We all know this is a speculative run-up. We all know it'll end somehow. Crashes always start with something like this. Is this the tipping point? Damned if I know. But it'll come.
- zeofig 8mo agoJust print so much money that people (yes, banks are people!) have nothing better to do than buy stonks. Problem solved!
- ajross 8mo agoThis is reasoning from a mistake. Market valuation is about VALUE, which is an abstract idea assigned by the market, which is not the same thing as MONEY, which can be "printed"[1]. Market values go up and down on their own, irrespective of the amount of money in circulation. They reflect consensus (often irrational) for what the securities "should be trading at", and that's all. If the currency inflates or deflates, the markets do too. [1] Though recognize that by engaging in that frame you're painting yourself as an unserious amateur being influenced by partisan media. Real governments do not "print money" in any real sense, and attempts to conflate things like bond debt with it run afoul, yet again, of the money/value mistake.
- callan101 8mo agohttps://archive.is/BXlAP https://archive.is/BXlAP
- deleted 8mo ago[deleted]
- nsjdkdkdk 8mo ago[dead]
- bravetraveler 8mo agoIn the distance, Uncle Sam groans as his phone rings
- radpanda 8mo agoIf the ice cream cone won't lick itself, who will?
- jt2190 8mo agoLast paragraph is informative: > Anthropic relies heavily on a combination of chips designed by Amazon Web Services known as Trainium, as well as Google’s in-house designed TPU processors, to train its AI models. Google largely uses its TPUs to train Gemini. Both chips represent major competitive threats to Nvidia’s best-selling products, known as graphics processing units, or GPUs. So which leading AI company is going to build on Nvidia, if not OpenAI?
- dylan604 8mo agoWould Nvidia investing heavily in ClosedAI dissuade others to use Nvidia?
- smileson2 8mo agoAren't they switching to PI for Pretend Intelligence?
- irishcoffee 8mo agoIf nothing else, the video game market would explode under AMD, maybe?
- wmf 8mo agoOpenAI will keep using Nvidia GPUs but they may have to actually pay for them.
- dfajgljsldkjag 8mo agothe chinese will probably figure out a way to sneak the nvidia chips around the sanctions
- ekianjo 8mo agoAlibaba has their own chips now they use for training.
- Morromist 8mo agoNvidia had the chance to build its own AI software and chose not to. It was a good choice so far, better to sell shovels than go to the mines - but they still could go mining if the other miners start making their own shovels. If I were Nvidia I would be hedging my bets a little. OpenAI looks like it's on shaky ground, it might not be around in a few years.
- m000 8mo agoAnd so it begins.
- random_duck 8mo agogarbing popcorn
- CamperBob2 8mo agoDoes this mean OpenAI won't be needing all that RAM after all...?
- diabllicseagull 8mo agosadly micron/sandisk bubble is going full steam ahead
- jjcm 8mo agoNot only has OpenAI's market share gone down significantly in the last 6mo, Nvidia has been using its newfound liquid funds to train its own family of models[1]. An alliance with OpenAI just makes less sense today than it did 6mo ago. [1] https://blogs.nvidia.com/blog/open-models-data-tools-accelerate-ai/ https://blogs.nvidia.com/blog/open-models-data-tools-acceler...
- funkyfiddler369 8mo ago[flagged]
- Onavo 8mo agoYou mean the DOW right?
- funkyfiddler369 8mo agoI'm afraid I don't know what that is. I meant thinking patterns that go beyond our understanding. High functioning autism that is beyond jealousy/envy, and beyond the need to hold or be on a leash and beyond the enigma of emotions that come with the influence to dump and pump stock market prices of precious, precious metals. Or, in other terms, the kind of intelligence that is built for abstract, distant, symbiotic humanity. From the POV of Earth as a system, we're quite the dumb nuisance. "Just get it, man". :D
- ekianjo 8mo agoChatGPT has nowhere the lead it used to have. Gemini is excellent and Google and Anthropic are very serious competitors. And open weight models are slowly catching up.
- funkyfiddler369 8mo ago[flagged]
- mnky9800n 8mo ago
- johnny_canuck 8mo agoInteresting to see this follow the news of their plan IPO in Q4 just yesterday. https://www.wsj.com/tech/ai/openai-ipo-anthropic-race-69f06a42 https://www.wsj.com/tech/ai/openai-ipo-anthropic-race-69f06a...
- Handy-Man 8mo ago> He[Jensen Huang] has also privately criticized what he has described as a lack of discipline in OpenAI’s business approach and expressed concern about the competition it faces from the likes of Google and Anthropic, some of the people said.
- jillesvangurp 8mo agoPeople talk about an AI bubble. What we actually have is a GPU bubble. NVidia makes really expensive GPUs for AI. Others also make GPUs. Companies like Google produce and operate AI models largely using their own TPUs rather than NVidia's GPUs. We've seen the Chinese produce pretty competitive open models with either older NVidia GPUs or alternative GPUs because they are not allowed to buy the newer ones. And AMD, Intel and other chip makers are also eager to get in on the action. Companies like Microsoft, Amazon, etc. have their own chips as well (similar to Google). All the hyperscalers are moving away from NVidia. And then Apple runs a non Intel and non NVidia based range of workstations and laptops that are pretty popular with AI researchers because the M series CPU/GPU/NPU is pretty decent value for running AI models. You see similar movement with ARM chips from Qualcomm and others. They all want to run AI models on phones, tablets, laptops. But without NVidia. NVidia's bubble is about vastly overcharging for a thing that only they can provide. Their GPU chips have enormous margins relative to CPU chips coming out of the same/similar machines. That's a bubble. As soon as you introduce competition, the companies with the best price performance wins. NVidia is still pretty good at what they do. But not enough to justify an order of magnitude price/cost difference. NVidia's success has been predicated on its proprietary software and instruction set (CUDA). That's a moat that won't last. The reason Google can use its own TPUs rather than CUDA is that it worked hard to get rid of their CUDA dependence. Same for the other hyperscalars. At this point they can do training and inference without CUDA/NVidia and its more cost effective. The reason that this 100B deal is apparently being reconsidered is that it is a bad deal for OpenAI. It was going to overpay for a solution that they can get cheaper elsewhere. It's bad news for NVidia, good news for OpenAI. This deal started out with just NVidia. But at this point there are also deals with AMD, MS, and others. OpenAI like the other hyperscalers is not betting the company on NVidia/CUDA. Good for them.
- 8mo ago
- kennyadam 8mo agoThis video that breaks down the crazy financial positions of all the AI companies and how they are all involved with one called CoreWeave (who could easily bring the whole thing tumbling down) is fascinating: https://youtu.be/arU9Lvu5Kc0?si=GWTJsXtGkuh5xrY0 https://youtu.be/arU9Lvu5Kc0?si=GWTJsXtGkuh5xrY0
- ruckfool 8mo agoCoreweave acquired WandB last year. https://www.coreweave.com/blog/coreweave-completes-acquisition-of-weights-biases https://www.coreweave.com/blog/coreweave-completes-acquisiti... . Strategic.
- chasd00 8mo agoYeah I see coreweave as a canary in the coal mine. They’re not doing so hot and basically got a bailout by Nvidia a few days ago. https://techcrunch.com/2026/01/26/nvidia-invests-2b-to-help-debt-ridden-coreweave-add-5gw-of-ai-compute/ https://techcrunch.com/2026/01/26/nvidia-invests-2b-to-help-...
- downrightmike 8mo agoAnd the loans given to nvidia, the collateral are old and rapidly discounting GPUs
- beloch 8mo agoMicrosoft and Google's role in this does explain why they're so keen to push AI into their products, whether customers want it or not.
- mattas 8mo agoWould be interesting to see how Oracle's CDSs react to this news.
- chasd00 8mo agoIdk about this news specifically but oracle cds prices are moving. The below link says 30k layoffs may hit Oracle which I feel is a bit hyperbolic so this article may not be grounded in reality. https://www.theregister.com/2026/01/29/oracle_td_cowen_note/ https://www.theregister.com/2026/01/29/oracle_td_cowen_note/ Edit: Another src https://www.cio.com/article/4125103/oracle-may-slash-up-to-30000-jobs-to-fund-ai-data-center-expansion-as-us-banks-retreat.html https://www.cio.com/article/4125103/oracle-may-slash-up-to-3...
- ajjahs 8mo ago[dead]
- klysm 8mo agoHow is this legal for them to do to pump stocks
- caycep 8mo agowill there be more 5090 FE cards at a lower price? one can only hope
- qwerpy 8mo agoI would love it if AI fizzled out and nvidia had to go back to making gaming cards. Just trying to have a simple life here and play video games, and ridiculous hype after hype keeps making it expensive.
- randomNumber7 8mo agoI hate to say it but there will likely come much more annying things that'll disturb your gaming experience.
- slumberlust 8mo agoAINFTs! You're right, and it's a bit depressing. Seems more and more that cloud gaming is the only long term solution the industry will tolerate...I hate it.
- caycep 8mo agowell aside from civilizational collapse and having to become refugees, it'd be nice to play computer games....
- qwerpy 8mo agoAt this point I’m content just playing single player games and older games. What is there left to disturb me? (After I build a PC)
- whatever1 8mo agoOpenAI is too important to run out of cash. The gov will make companies invest.
- tartuffe78 8mo agoToo important to what? The bubble?
- byzantinegene 8mo agothe fall of openai can easily have a domino effect on the rest of the ai landscape
- this_user 8mo agoIs it? What do they have that Google and Anthropic do not at this point?
- whatever1 8mo agoCash ashes.
- batiudrami 8mo agoImportant for what? Google and anthropic's models are already better, and google actually makes money, and both are US companies. What strategic relevance is there to Open AI?
- ares623 8mo agoWe will miss Sam’s irresistible puppy eyes
- moomoo11 8mo agonvidia should buy OpenAI. I like Jensen.
- system2 8mo agoThat's Sam Altman's wet dream: to get out of this with lots of cash and headache-free when the bubble bursts.
- mordymoop 8mo agoI wonder how much the indications of Altman's duplicitous behavior through the deposition findings have been relevant here.
- rwmj 8mo agoI doubt they care at all. It might even be a feature.
- mrcwinn 8mo agoThe article references an “undisciplined” business. I wonder if this is speaking to projects like Sora. Sora is technically impressive and was fun for a moment, but it’s nowhere near the cultural relevance of TikTok, but I believe significantly more expensive, harder to monetize, and consuming some significant share of their precious GPU capacity. Maybe I’m just not the demo and missing something. And yes, Sam is incredibly unlikable. Every time I see him give an interview, I am shocked how poorly prepared he is. Not to mention his “ads are distasteful, but I love my supercar and ridiculous sunglasses.”
- rchaud 8mo agoHey, at least Sora exists. They acquired Jony Ive's company for $6.5bn without even any vaporware to point to.
- random_duck 8mo ago"the people said"
- amluto 8mo agoIt’s probably not really related, but this bug and the saga of OpenAI trying and failing to fix it for two weeks is not indicative of a functional company: https://github.com/openai/codex/issues/9253 https://github.com/openai/codex/issues/9253 OTOH, if Anthropic did that to Claude Code, there wasn’t a moderately straightforward workaround, and Anthropic didn’t revert it quickly, it might actually be a risk-the-whole-business issue. Nothing makes people jump ship quite like the ship refusing to go anywhere for weeks while the skipper fumbles around and keeps claiming to have fixed the engines. Also, the fact that it’s not major news that most business users cannot log in to the agent CLI for two weeks running is not major news suggests that OpenAI has rather less developer traction than they would like. (Personal users are fine. Users who are running locally on an X11-compatible distro and thus have DISPLAY set are okay because the new behavior doesn’t trigger. It kind of seems like everyone else gets nonsense errors out of the login flow with precise failures that change every couple days while OpenAI fixes yet another bug.)
- leptons 8mo agoFunny that they can't just get the "AI" to fix it.
- viraptor 8mo agoYou still need to get engineers to actually dispatch that work, test it, possibly update the backend. Each of those can be already done via AI, but actually doing that in a large environment - we're not there yet.
- tonyedgecombe 8mo agoI expect the “AI” created it in the first place.
- trhway 8mo agoI don't know what you're so surprised about. The ticket reads like any other typical [Big] enterprise ticket. UI works, headless - not (headless is what only hackers use, so not a priority, etc.) Oh, found the support guy who knows what headless is and the doc page with a number of workarounds. There is even ssh tunnel (how is that made in into enterprise docs?!) and the classic - copy logged in credentials from UI machine once you logged in there. Bla-bla-bla and again classic: "Root Cause The backend enforces an Enterprise-only entitlement for codex_device_code_auth on POST /backend-api/accounts/{account_id}/beta_features. Your account is on the Team plan, so the server rejects the toggle with {"detail":"Enterprise plan required."} " and so on and so forth. At any given day i have several such long-term tickets that get ultimately escalated to me (i'm in dev and usually the guy who would pull the page with ssh tunnel or credentials copying :)
- ChicagoDave 8mo agoMany of us predicted OpenAIs insistence that the model was the product was the wrong path. The tools on top of the models are the path and people building things faster is the value.
- hahahahhaah 8mo agoHard to capture that value all in one place though.
- aurareturn 8mo agoThe model is the product. OpenAI themselves also build products on top of their models. Those without models are hugely vulnerable to sudden rug pulls.
- ChicagoDave 8mo agoBut OpenAI has spent too much capital on their models and not balanced that with pragmatic product development. They’re never gonna recover their investment and eventually their partners will run away. The GPT models are not a moat.
- aurareturn 8mo agoCan I get more details on your capital calculations?
- directevolve 8mo agoOnly in a monopoly situation. If you have several companies with comparable models you can easily switch between, all desperate for revenue to recoup their massive capex. you’re fine.
- aurareturn 8mo agoTraining AI models is a natural monopoly.
- andrewstuart 8mo agoGoogle has the data and the TPUs and the massive cash to advance. Microsoft has GitHub - the world’s biggest pile of code training data, plus infinite cash. OpenAI has …… none of these advantages.
- misiti3780 8mo agothis is the argument i continue to have with people. first mover isnt always an advantage - i think openai will be sold or pennies on these dollars someday (next 5 years after they run out of funding). Google has data, TPUs, and a shitload of cash to burn
- tester756 8mo ago>first mover isnt always an advantage but in this case it is, ChatGPT name is really, really strong, it's like "just google it" instead of "just search the web"
- rchaud 8mo agoName recognition only gets you so far. "Just Google it" happened because Google was better than Hotbot/Altavista/Yahoo! etc by orders of magnitude. Nobody even bothered to launch a competing search engine in the 2000s because of this (until Microsoft w/ Bing in 2009). There is no such parallel with ChatGPT; Google, Bing, even DuckDuckGo has AI search. First mover advantage matters only if it has long-lasting network effects. American schools are run on Chromebooks and Google Docs/Slides, but these have no penetration in enterprise, as college students have been discovering when they enter their first jobs.
- catdog 8mo agoMaybe but it's far from profitable. People largely don't want to pay for it either.
- tester756 8mo agoWho cares? profitability is not the most important thing at every stage of the product
- mrcwinn 8mo agoThis seems unfair and biased. After all, I’ve never seen a more obviously capable CEO. https://preview.redd.it/sam-altman-on-the-model-v0-7u2a2o7lrzdf1.jpeg?width=1200&format=pjpg&auto=webp&s=5d2d82d888b110c8282ec9951901833f918fe8f1 https://preview.redd.it/sam-altman-on-the-model-v0-7u2a2o7lr...
- ozozozd 8mo agoMy doubts have all evaporated after seeing that photo.
- partiallypro 8mo agoI know OpenAI isn't a popular company here (anymore) but the doomerism in this thread seems a bit too hasty. People were just as doomy when Altman was sacked, and it turned into nothing and the industry market caps have doubled or even tripled since.
- nunez 8mo agoUnrelated: does anyone else think that Jensen's gatorskin leather jacket at their latest conference didn't suit him at all? It felt very "witness my wealth" and out of character.
- PunchyHamster 8mo agothat is his character
- 0xbadcafebee 8mo agoI felt anxious about all the insane valuations and spending around AI lately, and I knew it couldn't last (I mean there's only so much money, land, energy, water, business value, etc). But I didn't really know when it was going to collapse, or why. But recently I've been diving into using local models, and now it's way more clear. There seems to be a specific path for the implosion of AI: - Nvidia is the most valuable company. Why? It makes GPUs. Why does that matter? Because AI is faster on them than CPUs, ASICs are too narrowly useful, and because first-mover advantage. AMD makes GPUs that work great for AI, but they're a fraction of the value of Nvidia, despite the fact that they make more useful products than Nvidia. Why? Nvidia just got there first, people started building on them, and haven't stopped, because it's the path of least resistance. But if Nvidia went away tomorrow, investors would just pour money into AMD. So Nvidia doesn't have any significant value compared to AMD other than people are lazy and are just buying the hot thing. Nvidia was less valuable than AMD before, they'll return there eventually; all AMD needs is more adoption and investment. - Every frontier model provider out there has invested billions to get models to the advanced state they're in today. But every single time they advance the state of the art, open weights soon match them. Very soon, there won't be any significant improvement, and open weights will be the same as frontier, meaning there's no advantage to paying for frontier models. So within a few years, there will be no point to paying OpenAI, Anthropic, etc. Again, these were just first-movers in a commodity market. The value just isn't there. They can still provide unique services, tailored polished apps, etc (Anthropic is already doing this by banning users who have the audacity to use their fixed-price plans with non-Anthropic tools). But with AI code tools, anyone can do this. They are making themselves obsolete. - The final form of AI coding is orchestrated agent-driven vibe-coding with safeguards. Think an insane asylum with a bowling league: you still want 100 people to autonomously (and in parallel) knock the pins knocked over, but you have to prevent the inmates from killing anyone. That's where the future of coding is. It's just too productive to avoid. But with open models and open source interfaces, anyone can do this, whether with hosted models (on any of 50 different providers), or a Beowulf cluster of cobbled together cheap hardware in a garage. - Eventually, in like 5-10 years (a lifetime away), after AI Beowulfs have been a fad for a while, people will tire of it and move back to the cloud, where they can run any model they want on a K8s cluster full of GPUs, basically the same as today. Difference between now and then is, right now everyone is chasing Anthropic because their tools and models are slightly better. But by then, they won't be. Maybe people will use their tools anyway? But they won't be paying for their models. And it's not just price: one of the things you learn quickly by running models, is they're all good for different things. Not only that, you can tweak them, fine-tune them, and make them faster, cheaper, better than what's served up by frontier models. So if you don't care about the results or cost, you could use frontier, but otherwise you'll be digging deep into them, the same way some companies invest in writing their own software vs paying for it. - Finally, there's the icing on the cake: LLMs will be cooked in 10 years. I keep reading from AI research experts that "LLMs are a dead end" - and it turns out it's true. LLMs are basically only good because we invest an unsustainable amount of money in the brute-forcing of a relatively dumb form of iteration: download all knowledge, do some mind-bogglingly expensive computational math on it, tweak the reasults, repeat. There's only so many of that loop you can do, because fundamentally, all you're doing is trying to guess your way to an answer from a picture of the past. It doesn't actually learn, the way a living organism learns, from experience, in real-time, going forward; LLMs only look backward. Like taking a snapshot of all the books a 6 year old has read, then doing tweaks to try to optimize the knowledge from those books, then doing it again. There's only so much knowledge, only so many tweaks. The sensory data of the lived experience of a single year of life of a 6 year old is many times more information than everything ever recorded by man. Reinforcement Learning actually gives you progressive, continuously improved knowledge. But it's slow, which is why we aren't doing it much. We do LLMs instead because we can speed-run them. But the game has an end, and it's the total sum of our recorded knowledge and our tweaks. So LLMs will plateau, frontier models will make no sense, all lines of code will be hands-off, and Nvidia will return to making hardware for video games. All within about 10 years. With the caveat that there might be a shift in global power and economic stability that interrupts the whole game.... but that's where we stand if things keep on course. Personally, I am happy to keep using AI and reap the benefits of all these moronic companies dumping their money into it, because the open weights continue being useful after those companies are dead. But I'm not gonna be buying Nvidia stock anytime soon, and I'm definitely not gonna use just one frontier model company.
- StarterPro 8mo agoHa!
- chrishare 8mo agoThis is certainly no fatal for OpenAI, but there is some irony that Altman and Musk are both struggling.
- nicman23 8mo agothe biggest imo indicator that it is gonna pop was dram makers not promising to expand production
- baq 8mo agoNothing wrong with not wanting to go bankrupt if the bubble pops. It isn’t an indicator, it’s risk management.
- nicman23 8mo agowhich is itself an indicator
- Turfie 8mo agoWell, they might have gotten a little wary from previous boom and bust cycles. Perhaps they are a bit wary about the economic sustainability of the whole AI thing. However, perhaps they also might be driven by greed at this point. Why not just constrain supply and increase margins whilst they are no real competitor?
- lizknope 8mo agoI've been designing chips since 1997. The first 2 companies I was at had their own fabs. It's been a boom and bust industry for 50 years or more. https://www.macrobusiness.com.au/2021/05/the-great-semiconductor-boom-and-bust/ https://www.macrobusiness.com.au/2021/05/the-great-semicondu... Here is a long article from last year about Sam Altman. https://www.nytimes.com/2024/09/25/business/openai-plan-electricity.html https://www.nytimes.com/2024/09/25/business/openai-plan-elec... https://finance.yahoo.com/news/tsmc-rejects-podcasting-bro-sam-172040373.html?guccounter=1 https://finance.yahoo.com/news/tsmc-rejects-podcasting-bro-s... > TSMC’s leadership dismissed Altman as a “podcasting bro” and scoffed at his proposed $7 trillion plan to build 36 new chip manufacturing plants and AI data centers. I thought it was ridiculous when I read it. I'm glad the fabs think he's crazy too. If he wants this then he can give them the money up front. But of course he doesn't have it. After the dot com collapse my company's fabs were running at 50% capacity for a few years and losing money. In 2014 IBM paid Global Foundries $1.5 billion to take the fabs away. They didn't sell the fabs, they paid someone to take them away. The people who run TSMC are smart and don't want to invest $20-100 billion in new fabs that come online in 3-5 years just as the AI bubble bursts and demand collapses. https://gf.com/gf-press-release/globalfoundries-acquire-ibms-microelectronics-business/ https://gf.com/gf-press-release/globalfoundries-acquire-ibms...
- agduncan 8mo agoSex
- joshcsimmons 8mo agoThe circular funding scheme is finally becoming evident to people. Did my best to cover it in a video https://www.youtube.com/watch?v=Q5fSbuO8Q3k https://www.youtube.com/watch?v=Q5fSbuO8Q3k