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Nvidia is the central bank of AI
https://archive.ph/kt50V https://archive.ph/kt50V
- gz5 19d agoInteresting juxtaposition with Dario's/Anthropic's 'we must pace the frontier' missive today
- password54321 19d agoIf you read between the lines, it was mostly about China.
- downrightmike 19d agoChina caught up even with tech restrictions
- tolugenius 20d agoArchive: http://archive.today/kt50V http://archive.today/kt50V
- alexpadula 19d agoThank you
- epsteingpt 20d agoThis is a good headline and point. Realistically, they're worse than a central bank, because they can't exactly expand supply monotonically like a normal central bank. Nor do they realistically control rates.
- amelius 20d agoAnd what is TSMC in this analogy?
- tccole 20d agoIdk… government bonds or something?
- creativeSlumber 20d agodo they lend money to their customers to buy their own chips?
- deleted 20d ago[deleted]
- aeonik 20d agoThe currency press operator and manufacturer.
- bigyikes 20d agoWhat’s upstream of the central bank? …Congress?
- itsalwaysgood 20d agoA platform: aka the foundation under the bank. The material cement that allows chips to exist above it. And the platform is made of time: ours.
- overcast 20d agoASML is the foundation. Without them, none of this would exist.
- petcat 20d agoI think we can go even further and say that IBM, Zeiss, several Japanese companies, and even the US Department of Energy are the actual foundation since ASML is largely just an integrator of many different technologies they license from elsewhere.
- 19d ago
- treebeard901 20d agoThe Japanese economy and yen carry trade is a close second.Rising oul prices and reduced output due to the conflicts in the Middle East could filter through to increasing yields on Japanese debt. In turn, the yen interventions have to continue to keep it lower than 160, which seems to be the psychological barrier for the yen carry trade.
- yieldcrv 20d agoI view the market as celestial objects influencing each other through a lattice similar to spacetime Everything influences each other with varying gravitational pull At one point the mental model was more like a web, but spacetime with mass matches the model more closely
- Avicebron 20d agoMoney is a lot like mass, it has it's own gravity.
- yieldcrv 19d agoand it doesn’t disappear [1], much like law of conservation at any given time there is a finite amount of it most easily observed in currencies’ relative price to another currency, and its movement between owners causes distortions in asset prices most people I’m around and most trading indicator developers I’ve seen don’t seem to conceptualize the flow of value around the economy. so it feels niche and maybe visualizing this mental model can help many people [1] central banks can functionally delete money in their bond purchase and roll off programs
- thrownawaysz 20d agoI wonder when they will give up on the gaming market because that could take down several publishers and developers. I really don't think it's an if question but a when because it almost feels like an afterthought at this point (they removed the standalone gaming revenue report from the financial reports this summer). Also I don't think AMD and Intel is capable "to step in" to replace them.
- CuriouslyC 20d agoAAA gaming is cooked, and AMD/Intel is plenty able to support indie to AA needs.
- 12ha6 20d agoKushner and MBS bought Electronic Arts for $55 billion, so at least there will be a bailout or instructions to Nvidia to continue gaming cards.
- Synthetic7346 20d agoHow so? I have a 5070ti but from what I've read the 9070xt keeps up well enough. As long as you don't need the cuda or dlss AMD is a good option
- c0balt 20d agoThat seems a bit overzealous, most consoles[0] run on AMD chips today. Both PS 5 and Xbox are based on AMD APUs and both serve the AAA market quite well. GTA 6, Assassin's Creed and CoD are probably good enough indicators that the performance is enough, even if there is always room for more (as PC ports show). The PC market will also probably be fine even if stagnation in perfomance gains has been creeping in for a few years now. [0]: except Nintendo which relies on NVIDIA although their APU there focuses more on efficiency than top performance.
- traverseda 20d agoEh, AMD makes a lot of video game console SoCs. If you look at the steam hardware survey most people are running ancient computers.
- u1hcw9nx 20d agoIf Nvidia is a bank, it's an Islamic Bank. They don't take interest (usury), they share profits and risk. https://en.wikipedia.org/wiki/Islamic_banking_and_finance https://en.wikipedia.org/wiki/Islamic_banking_and_finance Imagine a scenario where the AI bubble bursts and AI companies and neoclouds go bankrupt en masse, and then a huge rebound occurs when AI has a delayed takeoff. Nvidia ends up with a massive amount of compute on its hands from its backstop deals, and it also owns assets from failed companies when profits start to grow. New startups running using Hugging take the place of OpenAI and Anthropic when their compute assets are divided between survivors like Nvidia, Microsoft, Alphabet, Meta. If/when there is an AI crash, any number of small startups can buy compute for the price of electricity without anyone wanting to buy them. That is when the real innovation happens. The top of the hype cycle is usually more about getting rich quick and buying and shutting down competition.
- caaqil 20d ago[flagged]
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- lumost 20d agoWhile I dislike this take, when the dust settles we will have compute clusters orders of magnitude larger than anything that existed in 2023. If demand vanishes for the 3 million cards Amazon just bought, then something will be done with them. The AI market may end up in a bizarre jepson's paradox of rotation between inference use cases and model training.
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- jskdkdkdkf 20d ago[dead]
- 19d ago
- pwillia7 20d agoShould there be a LIBOR for 1GB VRAM set each morning?
- Havoc 20d agohttps://www.dramexchange.com/ https://www.dramexchange.com/
- quickthrowman 20d agoCME is launching futures contracts for GPU compute: https://www.cmegroup.com/markets/energy/power/compute-futures.html https://www.cmegroup.com/markets/energy/power/compute-future...
- morninglight 19d agoConsidering that LIBOR was discontinued in 2023 after a scandal of manipulation and fraud, YES! It's back to the future.
- pwillia7 18d agoTIL thanks -- always seemed pretty obvious
- anthonybourdain 20d agoOkay, but at some point these investments need to start turning profits; the financing NVDA has arranged is temporary, and private credit needs returns at some point. The overinvestment in AI will lead to a downturn in the capital cycle.
- jskdkdkdkf 20d ago[dead]
- Mistletoe 20d agoHow many top signals like this article do you need to see before you exit the market? Let’s look to the past: https://www.history.com/articles/1929-stock-market-crash-warning-signs https://www.history.com/articles/1929-stock-market-crash-war...
- tccole 20d agoAs the saying goes. The market can stay irrational longer than you can stay solvent.
- deleted 20d ago[deleted]
- bogzz 19d agoThis phrase has reached the point of semantic satiation in my mind. Maybe THAT'S the real recession indicator.
- tonyhart7 20d agojust cashout at the peak, hedge fund manager probably
- JohnnyMarcone 20d agoWhere did you exit to?
- DarmokTanagra 19d ago[dead]
- Mistletoe 19d agoSome good options and data here. https://portfoliocharts.com/2021/12/16/three-secret-ingredients-of-the-most-efficient-portfolios/ https://portfoliocharts.com/2021/12/16/three-secret-ingredie... Gold, small cap value, long term treasuries all have done well historically.
- 19d ago
- ama4efaria 20d agohardware? yes Nvidia is software? Google is. AI = Data Data = Google
- JumpCrisscross 20d ago> worth around $5.4trn Note that the Fed has a $6.7tn balance sheet [1]. (This is a silly comparison. But still fun.) The real comparison: Nvidia's $500+ billion of investments and commitments [2] is substantially more than any easing the Fed has done in the same time [3]. Monetarily, Nvidia is creating a lot of money in our economy. The good news: I have seen no evidence Nvidia has borrowed against its stock or otherwise linked its equity value to these commitments. Its stock could crash without causing–as long as its cash flows continue–a credit crisis through its investments and commitments. [1] https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm https://www.federalreserve.gov/monetarypolicy/bst_recenttren... [2] https://www.sec.gov/Archives/edgar/data/1045810/000104581026000075/nvda-20260726.htm https://www.sec.gov/Archives/edgar/data/1045810/000104581026... [3] https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
- sailfast 20d agoIt would also follow that by increasing the money supply significantly they’re also contributing to inflation a great deal correct? (Given the rest of the economy is not growing at near the same rate as the AI industry)
- tonyhart7 20d agowell, M2 money supply is increasing with or without AI industry
- manlymuppet 20d agoMaybe a dumb question but how is NVIDIA increasing the total supply of money? Only the fed can actually order more money to be "created". Private companies can only work within the existing supply, that is, their reserves, no?
- cyberpunk 19d agoNV gives out a $100 to Party A, who puts it in their bank. Bank takes $90 of that deposit (assuming 10% fractional reserve rule, no idea what the actual number is), and loans it out to party B, who pays it into either the same or another bank. Same rules apply -- except now it's down to $81 being loaned out, and so on and so forth, until that 100$ generated $1000 in total bank deposits. edit: of course, it's never actually directly like this, a lot of other factors are involved, maybe the money is spent, maybe no one wants to borrow it, etc etc -- so it's more complicated but that's I think what they mean
- vkaku 20d agoMarket correction will happen. Banks go down and close during recessions. Hope these people are wise enough to see through these effects.
- Jeeetendra 20d ago[flagged]
- manlymuppet 20d agoI've always found it interesting when corporations start acting like public institutions. When traditionally philosophical, social contract ideas apply to things like corporate governance. Or like here, where private structures get powerful and important enough to resemble government structures. The ideas we deal with when we discuss society and organization aren't exclusive to government, they relate to human nature in general. I wonder if in the future we will have more discussion of power and how to organize it in corporations, similar to what we discuss today about government.
- qlte 19d agoWell the key difference making any superficial similarities fall apart is Nvidia does not have neutral economy-wide goals of maintaining small+stable inflation, near-full employment and stabilizing financial institutions like the Fed does. Nvidia is entirely self interested in protecting their own shareholder value (that includes the incestuous web of investments ultimately ending up spent on their GPUs). The structure of the Fed is setup the way it is to limit the sort of self-serving, myopic political micromanaging that could be damaging to the economy at large. And, unlike a beneficiary of rapid growth like Nvidia, has (historically) tried to identify potential indicators warning of unsustainable bubbles that could lead to financial contagion and tries to mitigate that risk using the limited monetary tools available and their public soapbox. A similar decision making structure would potentially be very undesirable to Nvidia shareholders as caution over long time horizons would likely produce what they would consider an excessively conservative, defensive strategy to avoid putting too much air into the bubble too quickly (at the expense of their valuation).
- manlymuppet 19d agoCorporations certainly don't have the same goals government does, but human nature applies universally. I'm not saying that corporations should have exactly the same rules and structure as government does, but perhaps many of the ideas used to design governments can be borrowed.
- daveguy 19d ago
- alexpadula 19d agoPaywall?
- eMpHaSe 19d agoyep, but click on the archiv.ph link. There you can read the article for free.
- cmiles8 19d agoBecause vendor financing in tech to keep a bubble going never ended badly. Sadly it seems like some haven’t watched the end of the last movie on this subject.
- taurath 19d agoIt’s Different This Time(tm)
- chairmansteve 19d agohttps://en.wikipedia.org/wiki/Pyramid_schemes_in_Albania https://en.wikipedia.org/wiki/Pyramid_schemes_in_Albania
- SleightOfHand 19d ago[dead]
- timedude 19d agoBeing the central bank of anything is certainly not a compliment. I'd take it as an insult
- MangoCoffee 19d ago>Nvidia’s financial engineering is partly a response to its biggest customers’ transformation into rivals. “Hyperscalers”, tech giants such as Amazon, Google, Meta and Microsoft, account for roughly half of Nvidia’s revenue Companies just don't want to pay Jensen's tax. Hyperscalers might still pay Jensen's tax for LLM training but for inference. you don't have to. they are also betting on their own chip for training to replace Nvidia. this is Nvidia panicking and doing vendor fiance to Neoclouds and buying Hugging Face. even none hyperscalers like Meta is betting on its own chip for AI inference.
- anana_ 19d agoI'm curious what the actual rate of replacement/useful life of these GPUs running AI inference 24/7 is. If these cards burn out in less than the ~5 years of depreciation that accounting puts them at, well then there will be problems.
- jeremyjh 19d agoQuite a lot better than people originally thought. There is a LOT of demand for 5+ year old Ampere on the secondary market, and hyperscalers are still holding on to many of them since they can’t acquire new compute fast enough. https://www.cnbc.com/video/2026/08/24/making-old-gpus-new-again-sprout-ceo-shelly-li-on-the-gpu-lifecycle-for-enterprise.html https://www.cnbc.com/video/2026/08/24/making-old-gpus-new-ag...
- jonplackett 19d agoWeird to think we are currently living in the ‘unlimited free Ubers because you recommended a friend or 2’ phase of this new technology. Imagine if running fable costs you what it actually costs to run fable. A lot of vibe coders (and just proper software engineers) are gonna be very sad if that comes to pass.
- LastTrain 19d agoThis is what I’m not getting - we’re spending more than the global gross sales of all software on the planet on AI, how much more software needs to be sold and for how much more to recoup?
- jonplackett 19d agoThe economics only make sense if they can replace a huge number of workers with AI. But that reminds me of the story of the union rep telling Ford: “good luck getting your machines to buy your cars” (Fyi Ford took note and started paying his workers enough that they’d buy his cars)
- heaney-555 19d agoYou are assuming a fixed 0-growth economy. The economics can work if the economy grows. https://en.wikipedia.org/wiki/Economic_growth https://en.wikipedia.org/wiki/Economic_growth
- jonplackett 18d agoHow can it work if people don’t have jobs though? Where do they get their money to pay for anything? Also the economy can grow and still leave everyone completely screwed except rich owner classes.
- surcap526 19d ago[dead]
- signumhq 19d ago[flagged]
- anu7df 19d agoCracks are starting to appear. Open Ai and Anthropic are publicly asking for slowdown in AI research. Translation: We see this technology not being any more useful than what it is now, no AGI is coming, and the first one to accept this and slow down the dollar burn rate will incur the wrath of the market. So let's say this big boogey man technology will end all life on earth and we all slow down together. Bonus points if we can lobby for this to be included in the national security bucket. Then US govt can bail us out. Yay! If Nvidia is the bank, they should be starting to sweat a bit. It's not often companies ask for a voluntary slowdown.
- alansaber 19d agoThe frontier companies asking for regulation is somehow one of their less insane marketing ploy to date
- butterNaN 19d agoIt's always funny to me when they do the fear-propaganda, e.g. A statement like "There's a 10% chance that AI will destroy humanity in a decade". If a government were for the people, it can reasonably react with "Okay - if that's the case, you should shut down. And if not you will be arrested. Because if this is true, you're willingly building equivalent of a nuclear bomb."
- SturgeonsLaw 19d agoYeah, I've worked in risk management and if a company said "what we're doing has a 10% chance of killing lots of people" it'd get shut down so fast it'd make your head spin
- ShinyLeftPad 19d ago> you're willingly building equivalent of a nuclear bomb Not just building but actively testing
- combobyte 19d agoIt feels like there's should be some sort of "demonstrable intent to do harm" statute on the books for situations like this. If you have a genuinely-held belief that AI systems will end life on earth and you willfully continuing working on them anyway, then, like... you probably shouldn't be allowed to walk free in civil society anymore, right?
- roschdal 19d agoNvidia will quake the stock market.
- zombiwoof 19d ago[dead]
- shevy-java 19d agoNvidia owes us money.
- Founderarcstone 19d agoyes, and Jensen is the fed char!
- ernsheong 19d agoLol the page doesn't even scroll
- jing09928 19d ago[flagged]
- vannevar 19d agoIt would be more accurate to say Nvidia is the central bank of data center projects. The vast majority of capex associated with AI is for data centers, not the actual technology. Nvidia needs to create data center projects to sell to, hence its role in financing them.
- vayup 19d agoI am a bit confused at people looking at this negatively. If Nvidia believes AI demand is extraordinarily high, and that it requires a large capital outlay to serve that capital, isn't this what they should be doing?
- downrightmike 19d agoExcept as time goes on, it becomes cheaper and hardware agnostic. Depreciation for these cards are 2-3 years, but the financing says 4-6. A lot of money is locked up into older, slower tech far longer than usual. Eventually that gets written off as customers can't buy the new stuff unless they do. You know, a pop.
- topoftree1998 19d ago[dead]
- AbuAssar 19d agowhy democracy don't apply to corporations and force them to change the CEO every 4 years with 2 terms at most for re election?
- Eastmill 19d agoCUDA lock-in makes this painfully true. Everyone's building their businesses on Nvidia's terms.
- intrepidsoldier 19d agoI called it long ago https://ramansharma.substack.com/p/nvidia-is-the-federal-reserve-of https://ramansharma.substack.com/p/nvidia-is-the-federal-res...