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Nvidia will get all that money back via GPU purchases, Amazon via cloud rental and SoftBank is being typical SoftBank - a rich but not particularly bright kid i
by Yizahi 8mo ago
Nvidia will get all that money back via GPU purchases, Amazon via cloud rental and SoftBank is being typical SoftBank - a rich but not particularly bright kid in a class :) .
- AnimalMuppet 8mo ago"I give you $30 billion if you use it to buy $30 billion of stuff from me" doesn't sound like a very good investment. Is Nvidia expecting more back than it puts in? Enough more to make the deal profitable? Or is it just to keep Nvidia from crashing?
- Yizahi 8mo agoWell, I won't pretend I know the answer :) . But I assume that a) they are partially betting on making a normal return on investment (i.e. OAI not crashing), b) they profit from running a huge expense/revenue cycle (a company making say a million of profit and having a billion revenue is favored better than the same but with only ten million revenue), and c) even if all goes wrong, it is still better to get back most of the investment even if not everything and zero profit, compared to a possibility of just losing it all like SoftBank or other investors.
- vonneumannstan 8mo ago$30B in sales is worth more than $30B in stock appreciation...
- rich_sasha 8mo agoIn the end it's exchanging GPUs for OpenAI shares. It's not a non-trade, and in the current market Nvidia could really sell the stuff for cash. The marginal cost is very much sharply positive.
- max51 8mo ago"I give you 30B$ worth of hardware that costs me <10B$ to make in exchange for 30B$ worth of shares in your company" would be a more accurate description.
- a_victorp 8mo agoI'd say the latter. Right now AI is Nvidia's biggest consumers. If any big AI company crashes, they'll lose a lot of money