5 ms·

You would think the effect was the opposite. I think this is worse for OpenAI. So far, the circular financing from Nvidia has been peanuts for the company. It'

You would think the effect was the opposite. I think this is worse for OpenAI. So far, the circular financing from Nvidia has been peanuts for the company. It's roughly equal to giving 5% discount on hardware, not a big deal when the profit margin is 70%. Trying to prop up new neoclouds and competition is a good idea. As I understand it, the OpenAI investment was much bigger effective discount but still safe because Nvidia invests gradually in installments only when OpenAI invests in data centers: tit for tat. Maybe OpenAI wanted to get the money now and invest it later, as they seem to be running out of cash.

embedding-shape 9mo ago
> You would think the effect was the opposite. I think this is worse for OpenAI. How do we know it wasn't? OpenAI isn't a publicly traded company, and I guess no one who dares writing anything here actually knows how the numbers look on the inside, so for what we know, it could very well have been worse for OpenAI than Nvidia.
- observationist 9mo ago
  You can make a good guess, though - OpenAI had a significant lead, its moat was being a generation or 2 ahead of the competition, and as of the end of 2025, OpenAI, Google, xAI, and Anthropic are pretty much neck and neck. Grok and Gemini are likely to be the top 2 within the next couple months, and the Chinese open models are hot on their heels. OpenAI is going to be competing for third or fourth place with Anthropic unless one of them pulls off a big capabilities or efficiency leap while remaining believably as good as the other top models. Google and xAI have advantages that the others don't, and are capitalizing on them like crazy. It remains to be seen whether xAI can compete with the Google hardware advantage, but they have economies of scale, differences in mission, and Elon's billions on their side, so it's turning out to be a very interesting race. Sama could also finagle a funding rabbit or strategic partnership out of his hat and also have the next top tier model, amazing everyone again and keeping a plausible "best in class" lead for a while; OpenAI would have to be down for at least a year before I counted it out completely. It's not looking very pretty for them right now, though.
  - asadotzler 9mo ago
    No one believes Grok will be top 2 in a couple months. OpenAI and Gemini, in one of the two orderings, will continue to be far ahead of Grok in "the next couple of months". I encourage you to bookmark your claim here and return in 2 months to take stock in your ability to predict/bluff.
    - raincole 9mo ago
      How do you know which two models are 'top 2' and how do you expect the parent commenter to know which are top 2 when he comes back to this comment and verify his prediction? Genuine question.
    - smegger001 9mo ago
      Grok even if it were technically superior is hampered by it being owned and run by a mercurial racist narcist who in drug infused mania keeps accidentally turning it into Mecha-Hitler in attempts to make it fit his political views or turning it into a generator of child porn. No one in their right mind wants to have their product associated with that kind of liability. Who wants an ai agent that starts spewing great replacement theory at their customers?
  - zozbot234 9mo ago
    The open source models are showcasing a lot of cool research ideas that will undoubtedly end up in future frontier models from OpenAI and others. We're at a point where the big proprietary AI firms barely do any foundational research anymore, they're purely about incremental improvement. All the proven substantial progress recently has been coming from the open models side.
    - drakenot 9mo ago
      I agree that DeepSeek and others have been doing most of the published research for future frontier models. But I’m not sure we can say they the big US companies aren’t doing foundational research anymore. I suspect a lot of it is just kept unpublished as a result of the intense competitive pressure, which is disappointing.
dktp 9mo ago
My best guess is that Nvidia is unhappy with how OpenAI is fishing for compute with its competitors (Jensen had some opinions on the AMD-OpenAI deal when it was announced). If this actually becomes a feasible reality, it gives OpenAI (and co) negotiating power - which is bad for Nvidia Nvidia might have wanted more exclusivity/attachment. And OpenAI still seems to have no problem raising money. So maybe there was just a commitment mismatch Pure speculation though
themafia 9mo ago
> the circular financing from Nvidia has been peanuts for the company. Enron thought the same thing. Until they had a closer look at what their middle managers were actually doing to the books.
- mgh2 9mo ago
  https://news.ycombinator.com/item?id=46865317 https://news.ycombinator.com/item?id=46865317
fsckboy 9mo ago
>It's roughly equal to giving 5% discount on hardware, not a big deal when the profit margin is 70%. using your numbers, Nvidia didn't drop 70%, it's more on the order of the 5% so at least from that angle, the news narrative holds together superficially.

embedding-shape 9mo ago

> You would think the effect was the opposite. I think this is worse for OpenAI. How do we know it wasn't? OpenAI isn't a publicly traded company, and I guess no one who dares writing anything here actually knows how the numbers look on the inside, so for what we know, it could very well have been worse for OpenAI than Nvidia.

observationist 9mo ago
You can make a good guess, though - OpenAI had a significant lead, its moat was being a generation or 2 ahead of the competition, and as of the end of 2025, OpenAI, Google, xAI, and Anthropic are pretty much neck and neck. Grok and Gemini are likely to be the top 2 within the next couple months, and the Chinese open models are hot on their heels. OpenAI is going to be competing for third or fourth place with Anthropic unless one of them pulls off a big capabilities or efficiency leap while remaining believably as good as the other top models. Google and xAI have advantages that the others don't, and are capitalizing on them like crazy. It remains to be seen whether xAI can compete with the Google hardware advantage, but they have economies of scale, differences in mission, and Elon's billions on their side, so it's turning out to be a very interesting race. Sama could also finagle a funding rabbit or strategic partnership out of his hat and also have the next top tier model, amazing everyone again and keeping a plausible "best in class" lead for a while; OpenAI would have to be down for at least a year before I counted it out completely. It's not looking very pretty for them right now, though.
- asadotzler 9mo ago
  No one believes Grok will be top 2 in a couple months. OpenAI and Gemini, in one of the two orderings, will continue to be far ahead of Grok in "the next couple of months". I encourage you to bookmark your claim here and return in 2 months to take stock in your ability to predict/bluff.
  - raincole 9mo ago
    How do you know which two models are 'top 2' and how do you expect the parent commenter to know which are top 2 when he comes back to this comment and verify his prediction? Genuine question.
  - smegger001 9mo ago
    Grok even if it were technically superior is hampered by it being owned and run by a mercurial racist narcist who in drug infused mania keeps accidentally turning it into Mecha-Hitler in attempts to make it fit his political views or turning it into a generator of child porn. No one in their right mind wants to have their product associated with that kind of liability. Who wants an ai agent that starts spewing great replacement theory at their customers?
- zozbot234 9mo ago
  The open source models are showcasing a lot of cool research ideas that will undoubtedly end up in future frontier models from OpenAI and others. We're at a point where the big proprietary AI firms barely do any foundational research anymore, they're purely about incremental improvement. All the proven substantial progress recently has been coming from the open models side.
  - drakenot 9mo ago
    I agree that DeepSeek and others have been doing most of the published research for future frontier models. But I’m not sure we can say they the big US companies aren’t doing foundational research anymore. I suspect a lot of it is just kept unpublished as a result of the intense competitive pressure, which is disappointing.

dktp 9mo ago

My best guess is that Nvidia is unhappy with how OpenAI is fishing for compute with its competitors (Jensen had some opinions on the AMD-OpenAI deal when it was announced). If this actually becomes a feasible reality, it gives OpenAI (and co) negotiating power - which is bad for Nvidia Nvidia might have wanted more exclusivity/attachment. And OpenAI still seems to have no problem raising money. So maybe there was just a commitment mismatch Pure speculation though

themafia 9mo ago

> the circular financing from Nvidia has been peanuts for the company. Enron thought the same thing. Until they had a closer look at what their middle managers were actually doing to the books.

mgh2 9mo ago
https://news.ycombinator.com/item?id=46865317 https://news.ycombinator.com/item?id=46865317

fsckboy 9mo ago

>It's roughly equal to giving 5% discount on hardware, not a big deal when the profit margin is 70%. using your numbers, Nvidia didn't drop 70%, it's more on the order of the 5% so at least from that angle, the news narrative holds together superficially.