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Nvidia and OpenAI abandon unfinished $100B deal in favour of $30B investment
- deleted 7mo ago[deleted]
- marcyb5st 7mo agoOracle debt holders are sweating profusely right now I imagine. How does OpenAI gets 300B$ to pay Oracle [1] when nVidia has to be convinced to shell out "just" 30B for actually purchasing nVidia hardware. [1] https://www.ft.com/content/90aa74a5-b39d-4131-a138-367726cb18fb https://www.ft.com/content/90aa74a5-b39d-4131-a138-367726cb1...
- lm28469 7mo ago> How does OpenAI gets 300B$ to pay Oracle Easy, they just have to sell their overpriced vram chips (which haven't been manufactured yet), from their GPUs (which haven't been bought yet) which are in their data centers (the ones they're planning to build "soon"). It really isn't rocket science
- __patchbit__ 7mo agoReallocate the $70 billion split difference to orbital station AI datacenters and Moon mass driver launched life cycle renewal equipment resupplies.
- rvnx 7mo agoGood point, let's all invest in the SpaceX.ai IPO
- hshdhdhj4444 7mo agoOr as OpenAI has been trial ballooning for months, the government bails them out.
- mnky9800n 7mo agoThis reminds me when F22s blasted Chinese balloons out of the sky.
- giancarlostoro 7mo agoReminds me of when we sent balloons into Russian Airspace to see how many we could get back on the other end, in the 1950s. https://en.wikipedia.org/wiki/Project_Genetrix https://en.wikipedia.org/wiki/Project_Genetrix
- oblio 7mo agoI'm a bit disappointed the balloons weren't nuclear powered, considering the era.
- diegopetrucci 7mo agoTIL. Great read.
- hagbarth 7mo agoI have no idea why they would do that. Outside blatant corruption, which we shouldn't discount.
- SecretDreams 7mo ago> Outside blatant corruption Are we acting like this is a low probability outcome?
- carlkarlcarol 7mo ago[dead]
- GolfPopper 7mo agoDo they have enough liquidity to bribe Trump to do that?
- pawelduda 7mo agoMaybe they could sell the RAM reserves they've been hoarding
- throwaway85825 7mo agoOpenAI is the HBM market.
- this_user 7mo agoI am very curios if OpenAI's IPO attempt this year will turn into WeWork 2.0 where all the air suddenly comes out of the valuation once the market acknowledges that they have no moat and lack a clear path to profitability that would make these huge investments worthwhile.
- onlyrealcuzzo 7mo agoThere are at least plausible scenarios where OpenAI is a VERY valuable company in the near future. There were not with WeWork. The SpaceX/xAI IPO will be more interesting.
- SecretDreams 7mo agoAll of these things are vastly overvalued. Only one with tangible value is SpaceX because that's actually a moat-space. OAI holds no moat, has not done a good enough job to entrap their users, and has poor cost structure. xAi isn't even a point of discussion.. it's just a scheme to rip off investors. WeWork.. hard to take anyone seriously that ever invested in this bad boy.
- Ectiseethe 7mo ago> WeWork.. hard to take anyone seriously that ever invested in this bad boy. Masayoshi Son may not be providing returns for its investors but he is providing entertainment for the rest of the world.
- luke5441 7mo agoSpaceX valuation is also going to be interesting. Talking about CapEx, SpaceX has deorbiting assets on top of depreciating ones. And without Starlink the space launch market size is pretty small.
- testing22321 7mo ago> And without Starlink the space launch market size is pretty small. The EV market was mighty small when Tesla started too. Skate to where the puck is going.
- october8140 7mo agoThis thing is about to pop.
- lm28469 7mo agoYou know it's bad when even scam altman calls for regulations. They spend their entire lives telling you regulations are bad and taxation is theft but as soon as they need to drown the competition they lobby for more regulations https://www.yahoo.com/news/articles/openai-chief-sam-altman-says-125826974.html https://www.yahoo.com/news/articles/openai-chief-sam-altman-...
- mnky9800n 7mo agoRules for thee not for meeeeeee
- villgax 7mo agoAltman has been calling for it since 2023, lobbying world leaders meeting them to push on this Lol, were you under a rock or something?
- lm28469 7mo ago> since 2023 Is this supposed to be ancient history already ?
- Capricorn2481 7mo agoBut he's been doing that for years too.
- raincole 7mo agoThis comment cannot be further from reality. Altman has always been a very loud advocate for AI regulation. https://www.nytimes.com/2023/05/16/technology/openai-altman-artificial-intelligence-regulation.html https://www.nytimes.com/2023/05/16/technology/openai-altman-...
- 7mo ago
- SirensOfTitan 7mo agoRegardless of the promise of the underlying technology, I do wonder about the long-term viability of companies like OpenAI and Anthropic. Not only are they quite beholden to companies like Nvidia or Google for hardware, but LLM tech as it stands right now will turn into a commodity. It's why Amodei has spoken in favor of stricter export controls and Altman has pushed for regulation. They have no moat. I'm thankful for the various open-weighted Chinese models out there. They've kept good pace with flagship models, and they're integral to avoiding a future where 1-2 companies own the future of knowledge labor. America's obsession with the shareholder in lieu of any other social consideration is ugly.
- chasd00 7mo agoI think google ends up the winner. They can keep chugging along and just wait for everyone else to go bankrupt. I guess apple sees it too since the signed with google and not OpenAI.
- piker 7mo agoAnd what about Microsoft?
- napolux 7mo agoSee Apple in my previous comment
- mrbungie 7mo agoThey don't have the know how (except by proxy via OpenAI) nor custom hardware and somehow they are even worse at integrating AI into their products than Google.
- raw_anon_1111 7mo agoThey don’t need to. Just like Amazon they are seeing record revenues from Azure because of their third party LLM hosting platforms only being gated because no one can get enough chips right now
- cmiles8 7mo agoThere are serious balance sheet concerns for these companies with exposure to OpenAI, Anthropic and such. It’s all fun and games till it’s not. All this capital investment is going to start hitting earnings as massive deprecation and/or mark-to-market valuation adjustments and if the bubble pops (or even just cools a bit) the math starts to look real ugly real quick.
- jimnotgym 7mo agoThe market is not there at all though is it? Nobody is paying what it actually costs to deliver AI services. It is not clear to me that it is cheaper than just paying people to do the work.
- zerosizedweasle 7mo agoSomeone did a calculation using heat generated - energy usage (which is ultimately the base cost of the universe) - and the human brain and body is just incredibly most cost efficient than how we're doing AI. So for basic tasks it's just absurdly expensive to be using AI instead of a human.
- rhubarbtree 7mo agowe don't pay humans in the food they consume
- zerosizedweasle 7mo agoWe don't pay for GPU's in the energy they consume either.
- HDThoreaun 7mo agoGenerating electricity is much cheaper than paying a human. The costs of employing a person have little to do with their energy usage
- jimnotgym 7mo agoNow the only question is when. When does this bubble burst? Great promise, replace all your call centre staff, then your developers with AI. It is cheaper, but only because the AI companies are not charging you what it really costs to do the work.
- raw_anon_1111 7mo agoOne of my specialties is implementing hosted call centers using Amazon Connect - the AWS version of the call center that Amazon uses internally. The fully allocated cost of one call to a human agent is $3-5. That pays for a lot of inference.
- rhubarbtree 7mo agopricing as an objection to ai is just cope. it might hurt the current status quo when they can no longer burn capital, but the long-term course will remain unchanged
- raw_anon_1111 7mo agoPrices will literally have to go up by 1500x+ in the above scenario to make it cheaper for a human agent. I assure you that AWS is big losing money running Nova Lite 2 (the model I use for speed and low latency) with their own models running on their own custom chips. I calculated the full cost of a call to be $0.05 cents a minute when handled by AI and that includes charges for a 1800 number and the varios other AWS services it uses. Nova does the processing of the text after a separate voice to text service (Lex)
- jimnotgym 7mo agoThat's great, but it sounds like Amazon has a specific model trained for this service? And I guess that Amazon funded the development in a sustainable way. Is any of that true for Anthropic and OpenAI?
- 7mo ago
- aurizon 7mo agoI wonder how the huge slug of memory that might now have to re-direct mid-ramp as this (and other AI pullbacks) ramify forward? Will Crucial re-enter the desktop market? Or will it create a slow/fast subsidence in memory? We will live in interesting times..
- altairprime 7mo agoConsidering how gasoline pricing works, RAM prices will likely decay at 1/xth the rate that the grew, so that retailers can capture maximum profit per price point before lowering to the next, and manufacturers can hold the oversupply in reserve for more AI demand. I would expect possible sharp price drop events (depending on the overage levels) just after the end of e.g. Micron’s financial years, though, as they will have unloaded the overflow at discount bulk pricing enabling some retailers to undercut the pre-unload pricing and resuming somewhat rational market behavior.
- overfeed 7mo agoThe next-financial-quarter-only mindset is just baiting CXMT into capturing >70% of the market, if they are able to scale their production. Once consumers trust the brand, it's all over for Micron, SK Hynix and Samsung's dominance.
- altairprime 7mo agoLooking forward to it for sure. Are they doing registered ECC in DDR5 yet? Last I checked I only found their DDR4 line.
- adam37 7mo ago100% just question of time, tracking their IPO
- baggachipz 7mo agoFollow the ball... which shell is the ball under? Keep an eye on the ball!
- hz231 7mo agoGood, AI is bad.
- danielovichdk 7mo agoIdiots, this is a splendid example of circular economy. OpenAi gets 30b, buys chips from nvidia for 30b. How is that an investment?
- chasd00 7mo ago> OpenAi gets 30b, buys chips from nvidia for 30b. well if OpenAi uses a credit card at least they'll get a ton of rewards points :)
- HDThoreaun 7mo agoNVDA has more money than they know what to do with. One strategy when you have extra money is investing it in equities. You exchange money for a slice of future profits. Not sure what the confusion is here
- bentt 7mo agoOpenAI is going to have to leapfrog everyone else with some kind of alien tech to remain viable. Nvidia is probably just saving face here and possibly hedging.
- onlyrealcuzzo 7mo agoNvidia has to hedge because if they go from a growth stock to a de-growth stock in a year - their P/E is going to go from 45 to 10 real fast.
- caconym_ 7mo agoDoes this mean I will be able to buy RAM for the NAS build I left too late (stupid me assuming I could rely on some basic modicum of price stability)? I assume not. I have the disks but only random old gaming PCs to put them in. I think I'm going to expand my Proxmox cluster and run Ceph so that I don't have to pay that 6x markup or whatever the fuck it is these days. I'm tired, man. I'm tired of living in this world where AI is simultaneously an unstoppable eschatological juggernaut that's already making everything worse and at best is going to steal my livelihood and destroy my family's future, but also a hype driven shell game with full buy-in from world leaders and the moneyed elite who see a golden opportunity to extract unprecedented amounts of wealth for themselves before the West falls and they have to make other arrangements.
- mmastrac 7mo agoYou can find DDR4 at reasonable prices, assuming it's not DDR4 ECC, and assuming it's not a QNAP that will only boot with RAM from a very narrow window of compatibility (ask me how I know).
- kasabali 7mo agoI don't know where this myth comes from, DDR4 prices have quadrupled since July.
- paxys 7mo ago99% of hobbyist and small business use cases can be served by hardware from 5-10 years which is still relatively cheap. You don't need to compete with Nvidia for brand new DDR5 RAM for your basement NAS.
- kasabali 7mo agoNah. Even goddamn 8GB DDR3 modules have tripled in price. SSD prices, similarly.
- nebula8804 7mo ago
- alsetmusic 7mo agoEd Zitron is gonna have a field day with this. He wrote / spoke about the dark horses of the AI apocalypse a year or more ago. Scaling back investment was one of the signs he predicted would signal its start. I like his podcast, Better Offline[0]. Some here might also like it, some would definitely hate it. He's not right about everything he says, but I agree with a lot of it. He has a newsletter for those who don't like podcasts. 0. https://www.betteroffline.com https://www.betteroffline.com
- deleted 7mo ago[deleted]
- altairprime 7mo agoHe often gets some airtime on HN for the AI stuff; see also past discussions: https://hn.algolia.com/?q=zitron https://hn.algolia.com/?q=zitron
- cootsnuck 7mo agoEd is the anger translator in my head. Good stuff.
- g-mork 7mo agoThe irony with Zitron is that summarising his astoundingly verbose anti-AI articles is one of the most consistently productive uses I've had for AI
- joshcsimmons 7mo agoEd's background is PR not engineering FWIW.
- rubatuga 7mo agoWow everything he said is coming true /s
- chasd00 7mo ago> Scaling back investment was one of the signs he predicted would signal its start. hah Nvidia just announced the deal with OpenAI is now $30B instead of $100B.
- deanmoriarty 7mo agoReally hard for me to understand why the average HN commenter has an almost cultish behavior towards Anthropic, they are somehow excused for all their sins whereas everything OpenAI does is taken in the most uncharitable way. It’s a very consistent pattern.
- recitedropper 7mo agoStarts with "astro" and ends with "turfing". Think about how valuable HN is for a company whose primary market is professional devs.
- QuadmasterXLII 7mo agoThere is some need for moral dynamic range. Anthropic is quite bad and there's lots of room at the bottom for OpenAI to be remarkably worse.
- mikkupikku 7mo agoWhy Nvidia would want to invest in prospecting firms instead of just selling pickaxes never made sense to me in the first place.
- dmix 7mo agoMaybe they have too much money from selling so make pickaxes and chose to reinvest into the industry that keeps funneling them money.
- mikkupikku 7mo agoI just don't get it. If they have too much money, don't the shareholders want dividends? If I were a shareholder I'd be pissed that Nvidia is trying to be part of the bubble instead of taking all the cream off the top.
- kristianp 7mo agoShareholders want capital gains, not dividends, because dividends attract a higher tax rate. If they started paying huge dividends savvy investors might look elsewhere. The implication is that NVidia wants to be seen as the best place to put your money. If they're paying a dividend it means they can't use it to increase their own profits.
- damnitbuilds 7mo ago2026 in AI: Superbowl ads, IPOs, bankruptcies.
- DonHopkins 7mo agoThat creepy AI dog-tracking Superbowl ad is dystopian enough -- especially when even South Park is now mocking Homeland Security and Noem shooting puppies -- and it's likely a future episode will be about federal ICE agents using surveillance cams and AI to round up more dogs for her to shoot. https://www.youtube.com/watch?v=GcAUmeH8Obk https://www.youtube.com/watch?v=GcAUmeH8Obk
- vaxman 7mo agoOpenAI is not worth $860B to anyone other than to the companies hoping to inflate their own valuations by selling it goods and services, at least until OpenAI inevitably goes to zero and its assets are acquired for substantially less than $30B. It simply does not cost $30B to build an OpenAI competitor and the opportunity cost of building one also isn't approaching $30B (unless one accounts for the stock hit from investor FOMO over such a delay, as, for example, Apple knows all too well). If OpenAI were one of many companies generally promoting the increased use of GPUs in industry, thereby developing the market that nVidia operates in, that would be one thing, but $30B, to one company, that then gets spent on nVidia purchases? Just, No. nVidia will get into a lot of trouble for doing this kind of deal that undermines confidence in the entire stock market.
- bmitch3020 7mo agohttp://archive.today/I9MoI http://archive.today/I9MoI
- artzev_ 7mo ago[dead]