You can do everything right and still have the curse of investor overconfidence placed on you.
Huang has been complaining for some time that doing well doesn’t result in stock gains, but the actual problem is the stock price is way too high so doing well does nothing for investor expectations.
This is when you sell shares because they no longer have any upside potential.
It sucks for companies though, but the fact is nvidia is overvalued at a 4.5T market cap.
In some ways the victim of their own success, that's just the way this system is built, for better or worse (mostly worse). The incentives drive the behaviour, but the architecture is hostile in nature, so it's hard to have different outcomes at a certain level. Infinite growth is literal cancer.
The company doesn't care if the stock price hits $1. If the company is paying it's bills, it just continues. It's the people who hold shares that care. The company doesn't hold shares in itself.
Enron collapsed because the company financials collapsed, not because the stock price collapsed. That happened after all the bad accounting practises and hidden debt came to light. Now, in that case the shareholders succeeded in suing for their losses, but they only had a case because of the mismanagement.
The company absolutely does own shares of itself and it's ability to secure credit and just engage in business in general depends of the value of that holding.
No. The board can decide to issue more shares, but this is a sub-dividing of the already issued shares and so normally requires a vote from the shareholders. Major shareholders normally sit on the board, so the two groups overlap but are legally distinct.
If a company buys it own shares, it's normally a "buyback" and the shares cease to exist.
I guess you could provide a guaranteed backstop to sellers and funnel the stock to the government, as Trump seems to love doing, but then you end up with a $3T of over-valued assets that you can't do anything with.
Nvidia definitely isn't Enron. It's all of Nvidia's customers that are mini-Enrons.
Enron crashed because they were cooking their books and faking income, declaring potential profit where none existed.
That's not Nvidia. Nvidia is selling actual product as fast as they can make it at whatever price they want to charge.
Nvidia's customers, on the other hand, are the ones who have to justify buying billions of dollars of product from Nvidia and explaining how they plan to make a profit from that.
Nvidia sells plenty of GPUs for actual money, they are good for it.
No, the real issue is the depreciation for the people owning GPUs. Your GPU will be usable for 4-6 years, and 2-4 of those years will be spent as ”the cheap old GPU. After that time, you need new GPUs. (And as the models are larger by then, you need moahr GPU)
How the actual fuck do these people expect to get any ROI on that scale with those timeframes? With training, maybe the trained model can be an asset (lol), but for inference there are basically no residual benefits.
Calculate the total power cost of running it at 100% load since 2014
Calculate Flops/Watt and compare with modern hardware
Calculate MTTF when running at 100% load. Remember that commercial support agreements are 4-5 years for a GPU, and if it dies after that, it stays dead.
In AI, consider the full failure domain (1 broken GPU = 7+ GPUs out of commission) for the above calculation.
You’ll probably end up with 4-6 years as the usable lifetime of your billion dollar investment. This entire industry is insane. (GTX 1080 here. Was considering an upgrade until the RAM prices hit.)
That's Michael Burrys thesis. Higher depreciation for GPU owners is a positive for Nvidia because they end up buying more GPUs.
I'm highlighting the the future revenue of those customers that Nvidia has booked in terms of equity. That is equivalent to Enron. Here the SPVs are named companies like OpenAI and other model developers.
I feel like what sounds personally insane to us (and is, don't get the wrong idea), to the people making such decisions the situation is more like -
"Emerging market with unknown upside thanks to new and evolving capabilities, exploration and competitive advantage shaped and constrained, globally, by hardware capability. Not my money I'm betting, 'risk' is extreme opportunity for me, negative consequences borne by others. Let's go"
NVIDIA is producing and delivering GPUs. However this does NOT translate into income, and that's what's making it shady. These companies are paying in shares that will be worth nothing when it pops.
It depends on the customer. Microsoft, Google, Amazon all have the revenue to carry the debts they are taking on. Oracle, Chat GPT, Musk and others are waay more sketchy.
The build out is going to take billions of dollars and these companies aren’t going to see a return for at least 5 years or more. The majors can carry that kind of debt load long term even if AI doesn’t pan out. Other businesses will struggle or go under if AI doesn’t bring the returns.
The next major movers will be companies that do a lot of IT business consulting like IBM. They are going to be busy helping non IT focused firms incorporate AI into their business model.
Finally if all these data centers pan out and the US keeps oscillating between shunning Renewables or Fossil fuels every time a new party comes to office we are going to have major problems with our energy infrastructure. Think energy bills as high as your mortgage within the next 5 years. Invest in utilities or energy companies and try to put solar and some kind of storage on your home.
It's all of Nvidia's customers that are mini-Enrons.
I don't think that those are faking profit. Well, I don't have some comprehensive list, and maybe somewhere someone is, but not for the majority of purchases. It's possible that they won't wind up being long-term profitable, but there isn't fraud involved in that.
I don't think that the Enron analogy is very applicable in general. Like, what people who are critical of the extent of AI investment are worried about is analogous to the dot-com bubble, where the returns to investors from companies didn't warrant the level of investment and stock prices for many companies shot way up and then fell back down.
EDIT: It's fair to say that Nvidia is driving demand for its products. But..that may be quite sensible, since if you have a killer app or two explode, it can drive massive demand for the hardware that runs it. If you have capital available and control the best hardware out there, it may well make more sense to use that capital on building more demand for your product than to go and try and improve the product more. There's only so many chip engineers available that Nvidia can hire, and unless they want to get into the "writing AI software" game themselves, which would have them compete with their customers, I'd think that that's potentially a reasonable place to put their capital if they're trying to improve their business potential.
Nvidia sold a lot of hardware when cryptocurrency became popular. I think that it's probably fairly safe to say that AI applications have considerably more potential to provide utility than does cryptocurrency.
OPENAI is probably the one that will be set to lose the most, and then oracle? i dont know if palintir fits into this, but THEIls company have been desperately trying to peddle his services to multiple countries already.
Enron was cooking the books hiding huge deficits, and spending the money from the workers pension funds, so no Nvidia isn't Enron, but that doesn't mean it's all good.
Enron was the absolute worst, only matched by the Bernie Madoff pyramid scheme and the Bankman Fried crypto fraud.
Saying you are better than that is a very bad look.
Yeah. Enron's scheme was trading money back and forth with itself to inflate its value until it all came crashing down, tanking Enron.
Nvidia is at the center of a scheme involving the entire economy trading money back and forth between a few companies to inflate value, so when the scheme tanks it'll crush everybody.
Man that reminds me of an old comic where two guys give each other the same $50,000 back and forth to eat horse shit and in the end their like, "we just created two jobs and grew GDP by $100,000!" Lol
hot potatoes, but they do need someone to hold on to that 100bn debt, usually other industries outside the tech sector. thats why they peddle it so hard to trump, to be used with palintir, and then other services.
Remember that when the news article talks about the economy, it's mostly talking about rich people's yachts.
Obviously there are some people nearing retirement age who need their pension plans not to lose value rapidly, they do exist. But the vast majority of the money that is being discussed here, that a bubble might make or break, is millionaires and billionaires savings accounts... So when this bubble bursts and when these companies go bankrupt, to hell with the ultra rich. If we want to help out people who are struggling to live out their retirement because of the stock market collapse that will occur, let's do that, and let's just tell the billionaires to go to hell.
So I tried using some AI chatbots to find a movie recently, it made up a few, none being the answer.
(The question was about a historical movie, made in perhaps 1970s by the feeling, set someplace in southern France somewhere around 1650s, has a few beautiful views of nature and castles ; one scene where a guard captain enters a room, asks a question, as a power gesture drinks a glass of wine on the table and a minute later falls ; another scene where for whatever reason a rapier fight happens in something like a tavern, two women in pastel dresses are descending by an open ladder from the second floor, seeing the brawl take our pocket pistols, one of them is stabbed with a rapier ; another scene where a guy is getting questioned with his feet over the fire ; another when another guy is climbing a tower clinging at brick mortars outside and hears guards' boots on the ladder very loudly ; when I was a kid and saw that, someone said it's an adaptation of something by Lope de Vega, but I'm not sure that's correct ; that's just in case someone reading this knows such a movie.)
But some googling sessions they do optimize, without you the user ever having to browse a webpage, and just getting a textual answer. That's a valid use.
And some other processes. They don't have to be useful for all things they are applied to, just some profitable.
Being a bubble does not mean the service they provide is useless. It means that the service is never generating enough profit to repay for the huge cost of providing it.
Would you pay 500 dollars a month to have the possibility to do your movie searches? Or alternatively, would you like your LLM of choice to counter that, having read all your emails and browser history, you are probably interested in a totally different movie that just happens to be playing now at a nearby cinema?
Because these AI companies are currently burning through literally a good chunk of all the cash in the world and they will eventually need to make even more gigantic profits to repay that cash. And the only one that is currently making money from AI seems to be NVIDIA, by selling the hardware that powers the AI giants.
I'm not saying that it IS all a bubble, by the way, as I can't read the future and these gigantic profits might well materialize in the future. I'm just saying that "bubble" and "useless" are different.
Would you pay 500 dollars a month to have the possibility to do your movie searches? Or alternatively, would you like your LLM of choice to counter that, having read all your emails and browser history, you are probably interested in a totally different movie that just happens to be playing now at a nearby cinema?
There might be a more direct parallel than originally intended in this with the explanation how one person works hard all day and makes less than another person who pushes a few buttons. The latter knows which buttons to push.
This technology is useless for my movie searches, but it might be useful in the same way as radar was for air defense.
BTW, I'm not sure what I'd choose if offered to pay 500 dollars for knowing what that movie is. There's one girl, if she'd be interested too to find that movie, perhaps I would.
So if such an expensive technology would allow this kind of nuanced search, and more seemingly efficient wouldn't, then we have a use case.
Or a model allowing to predict actions of other people sufficiently well, based on seemingly not precise enough data. However much it would cost, that would be justified, similarly to high-frequency trading, because it would operate on all existing value, not just what it generates.
I’m not saying that it IS all a bubble, by the way, as I can’t read the future and these gigantic profits might well materialize in the future. I’m just saying that “bubble” and “useless” are different.
I know, I was making two points, one is that everything is relative (what you've just agreed to), another is that it might not at all be a bubble.
On the air defence note, specialist systems are already amazing at tasks like this and can usually run fine on high end consumer tier hardware (up to a single server rack) rather than data centres with the power requirements of small countries. AI is here to stay but LLMs are absoloutely a bubble.
Open AI has announced over $1trillion dollars in infrastructure spending. I think you'll find near on everyone agrees it's a bubble, just not agreeable how big or the timeline of the burst.
Well, one can say then also that US military is a bubble, it also hogs resources far bigger for the same results that poorer nations achieve. There are some things it does that can't be compared to others because nobody has the need or that much money, but what can be compared is not even factor 10+.
It keeps getting that funding because of the position in the world it occupies.
Or one can say that the Danish kingdom sitting on the Sound relying on custom fees for its budget and then going on adventures with mercenary troops was a bubble. That bubble was inflated and burst a few times before that happened finally (something-something Kiel canal), and for long enough periods of history that just was the reality.
It's a relative thing if something is sustainable or not. When people are talking about Earth being expected to exist for enough time to be more afraid of global warming and microplastics and such, it means that Earth's existence itself is usually assumed to be indefinitely sustainable in our frame of evaluation.
So what you said is true, but dotcoms also were a bubble.
It’s a relative thing if something is sustainable or not. When people are talking about Earth being expected to exist for enough time to be more afraid of global warming...
Global warming is already having impacts on marine life, weather patterns etc. I'm not quite sure if I understand your point here.
So what you said is true, but dotcoms also were a bubble.
Yes they were, and a lot of money was lost. Much like AI. Many companies are pumping atronomical amounts of money into AI. They won't all succeed. There will be a significant loss of capital. AI will definitely stay in this world, but to what degree is the question.. enough to warrant over half the GDP of Australia being spent in a year by one company? Probably not.
openai has practically no value and that’s well known… nvidia is paying companies to buy their chips and playing bullshit shell games
the difference is openai is a pretty well known unprofitable company, and they aren’t doing quite as much of the bullshit shell games. nvidia is selling to basically everyone, taking stakes in companies, giving weird deals… it’s bloody impossible to track how much of their sales are real and how much those real sales are actually worth, or if those sales are loss leaders for some investment then those investments look a lot like openai
so nvidia not only is invested in a lot of very questionable AI bubble companies, but also their own sales figures are… unreliable
they’re making billions upon billions because they’re using their own money multiple times. it’s kinda like leveraged trading with all the risk and it’s incredible arrogant at the scale that nvidia is doing it
If you want to get advantage from a speculative fund making a bet on a popped bubble, then you need to be already invested now, before the bubble bursts. (And also, you/your fund need to be right that it’s really about to pop now, and not later)
Once the race is over it’s too late to bet on the ponies.
Nvidia is just selling overpriced premium shovels in a gold rush. They don't care if there's gold there or not.
Enron went bust by hiding debts. Making a loss is one thing, but lying about it to shareholders (and getting found out) is a one way trip out of the stock exchange.
The SP500 is starting to look like NVIDIA -> companies NVIDIA is investing in -> everyone else. Its starting to get NVIDIA heavy. If they go down...SP500 is gong to look terrible.
Nvidia has aggressively rebutted suggestions of any similarity [to failed telecom Lucent], saying in a leaked recent memo that it “does not rely on vendor financing arrangements to grow revenue”.
...Saying in a memo that was suspiciously, conveniently leaked and just so happens to claim everything is fine
I'm curious. Economically speaking, what would happen if Nvidia pulled a "Steam" and had a "February sale" where some models of video card were discounted enough to lead to a massive spike in sales numbers?
A big enough discount to generate a greater total net return on sales for the quarter despite the fact that they were sold at a lower profit margin per individual sale?
Assuming limitations like "you must create an account with a residential shipping address that can receive no more than x cards at the discounted price per street address" or some such to limit scalping, would simply showing increased profits do them any good?
Or is the problem due to a lack of product quantity?
Steam can do massive numbers spikes because they have essentially infinite inventory. The whole reason scalping video cards works is that Nvidia can not make as many as people want, even at full retail price. The existence of scalpers implies that Nvidia could raise prices, sell slightly fewer units at higher margin and get greater total return.
I don't know if it's just me or maybe dude is just getting older or photographers prioritizing different things, but I kinda love recent pictures of Jensen Huang.
Lately, I feel like whenever he is talking to anyone he always has this face that makes it seem like he's wondering if whoever he's talking to is going to finally be able to convince the world that all of this is falling apart and he's wondering "Is this where this train finally goes off the rails?".
97 Comments
MushuChupacabra@lemmy.world · 162 pts · 232d
That's such an Enron thing to say.
a_non_monotonic_function@lemmy.world · 50 pts · 232d
I bet Enron also claimed it wasn't Enron.
RelativeArea1@sh.itjust.works · 35 pts · 232d
Wooki@lemmy.world · 10 pts · 232d
The irony that nVidia just shifted the narrative from "not enough chips" to "not enough energy" is insane.
panda_abyss@lemmy.ca · 88 pts · 233d
You can do everything right and still have the curse of investor overconfidence placed on you.
Huang has been complaining for some time that doing well doesn’t result in stock gains, but the actual problem is the stock price is way too high so doing well does nothing for investor expectations.
This is when you sell shares because they no longer have any upside potential.
It sucks for companies though, but the fact is nvidia is overvalued at a 4.5T market cap.
Tyrq@lemmy.dbzer0.com · 41 pts · 232d
In some ways the victim of their own success, that's just the way this system is built, for better or worse (mostly worse). The incentives drive the behaviour, but the architecture is hostile in nature, so it's hard to have different outcomes at a certain level. Infinite growth is literal cancer.
TeamAssimilation@infosec.pub · 23 pts · 232d
“We didn’t want to inflate our valuation with circular investings, the market made us do it! We are the victims here!!”
*Deploys golden parachute*
Tollana1234567@lemmy.today · 3 pts · 232d
he will soon have to deploy one made of AI chips
U7826391786239@lemmy.zip · 25 pts · 232d
wewbull@feddit.uk · 18 pts · 232d
The company doesn't care if the stock price hits $1. If the company is paying it's bills, it just continues. It's the people who hold shares that care. The company doesn't hold shares in itself.
Enron collapsed because the company financials collapsed, not because the stock price collapsed. That happened after all the bad accounting practises and hidden debt came to light. Now, in that case the shareholders succeeded in suing for their losses, but they only had a case because of the mismanagement.
UnspecificGravity@piefed.social · 15 pts · 232d
The company absolutely does own shares of itself and it's ability to secure credit and just engage in business in general depends of the value of that holding.
wewbull@feddit.uk · 3 pts · 232d
No. The board can decide to issue more shares, but this is a sub-dividing of the already issued shares and so normally requires a vote from the shareholders. Major shareholders normally sit on the board, so the two groups overlap but are legally distinct.
If a company buys it own shares, it's normally a "buyback" and the shares cease to exist.
panda_abyss@lemmy.ca · 7 pts · 232d
It does impact employee morale when they get paid with stock incentives and they go to zero.
wewbull@feddit.uk · 3 pts · 232d
Of course. They are shareholders.
The company is a separate legal entity though.
panda_abyss@lemmy.ca · 2 pts · 232d
You can't really bail out a stock price though...
I guess you could provide a guaranteed backstop to sellers and funnel the stock to the government, as Trump seems to love doing, but then you end up with a $3T of over-valued assets that you can't do anything with.
UltraGiGaGigantic@lemmy.ml · 1 pts · 232d
weew@lemmy.ca · 77 pts · 232d
Nvidia definitely isn't Enron. It's all of Nvidia's customers that are mini-Enrons.
Enron crashed because they were cooking their books and faking income, declaring potential profit where none existed.
That's not Nvidia. Nvidia is selling actual product as fast as they can make it at whatever price they want to charge.
Nvidia's customers, on the other hand, are the ones who have to justify buying billions of dollars of product from Nvidia and explaining how they plan to make a profit from that.
Knock_Knock_Lemmy_In@lemmy.world · 68 pts · 232d
Sell chips to X
Receive stock in X
Value of stocks = discounted sum of future (fake) income
Booked as an asset on the balance sheet
This is exactly like Enron but the underlying commodity isn't energy, it's compute.
enumerator4829@sh.itjust.works · 7 pts · 232d
Nvidia sells plenty of GPUs for actual money, they are good for it.
No, the real issue is the depreciation for the people owning GPUs. Your GPU will be usable for 4-6 years, and 2-4 of those years will be spent as ”the cheap old GPU. After that time, you need new GPUs. (And as the models are larger by then, you need moahr GPU)
How the actual fuck do these people expect to get any ROI on that scale with those timeframes? With training, maybe the trained model can be an asset (lol), but for inference there are basically no residual benefits.
pupbiru@aussie.zone · 7 pts · 232d
enron sold plenty of gas and real things too: it’s the double handling that’s the problem; not the nature of the goods or services
enumerator4829@sh.itjust.works · 2 pts · 232d
The relative size of the double handling is the potential problem. I think Nvidia is just trying to extend the gold rush for a bit longer.
SlartyBartFast@sh.itjust.works · 6 pts · 232d
I'm still rocking a GTX970 from 2014
enumerator4829@sh.itjust.works · 9 pts · 232d
Do this:
You’ll probably end up with 4-6 years as the usable lifetime of your billion dollar investment. This entire industry is insane. (GTX 1080 here. Was considering an upgrade until the RAM prices hit.)
Knock_Knock_Lemmy_In@lemmy.world · 4 pts · 232d
That's Michael Burrys thesis. Higher depreciation for GPU owners is a positive for Nvidia because they end up buying more GPUs.
I'm highlighting the the future revenue of those customers that Nvidia has booked in terms of equity. That is equivalent to Enron. Here the SPVs are named companies like OpenAI and other model developers.
PolarKraken@lemmy.dbzer0.com · 3 pts · 232d
I feel like what sounds personally insane to us (and is, don't get the wrong idea), to the people making such decisions the situation is more like -
"Emerging market with unknown upside thanks to new and evolving capabilities, exploration and competitive advantage shaped and constrained, globally, by hardware capability. Not my money I'm betting, 'risk' is extreme opportunity for me, negative consequences borne by others. Let's go"
IndustryStandard@lemmy.world · 4 pts · 232d
And the companies faking revenue instead of profit.
trolololol@lemmy.world · 14 pts · 232d
NVIDIA is producing and delivering GPUs. However this does NOT translate into income, and that's what's making it shady. These companies are paying in shares that will be worth nothing when it pops.
Dead_or_Alive@lemmy.world · 9 pts · 232d
It depends on the customer. Microsoft, Google, Amazon all have the revenue to carry the debts they are taking on. Oracle, Chat GPT, Musk and others are waay more sketchy.
The build out is going to take billions of dollars and these companies aren’t going to see a return for at least 5 years or more. The majors can carry that kind of debt load long term even if AI doesn’t pan out. Other businesses will struggle or go under if AI doesn’t bring the returns.
The next major movers will be companies that do a lot of IT business consulting like IBM. They are going to be busy helping non IT focused firms incorporate AI into their business model.
Finally if all these data centers pan out and the US keeps oscillating between shunning Renewables or Fossil fuels every time a new party comes to office we are going to have major problems with our energy infrastructure. Think energy bills as high as your mortgage within the next 5 years. Invest in utilities or energy companies and try to put solar and some kind of storage on your home.
tal@lemmy.today · 4 pts · 232d
I don't think that those are faking profit. Well, I don't have some comprehensive list, and maybe somewhere someone is, but not for the majority of purchases. It's possible that they won't wind up being long-term profitable, but there isn't fraud involved in that.
I don't think that the Enron analogy is very applicable in general. Like, what people who are critical of the extent of AI investment are worried about is analogous to the dot-com bubble, where the returns to investors from companies didn't warrant the level of investment and stock prices for many companies shot way up and then fell back down.
EDIT: It's fair to say that Nvidia is driving demand for its products. But..that may be quite sensible, since if you have a killer app or two explode, it can drive massive demand for the hardware that runs it. If you have capital available and control the best hardware out there, it may well make more sense to use that capital on building more demand for your product than to go and try and improve the product more. There's only so many chip engineers available that Nvidia can hire, and unless they want to get into the "writing AI software" game themselves, which would have them compete with their customers, I'd think that that's potentially a reasonable place to put their capital if they're trying to improve their business potential.
Nvidia sold a lot of hardware when cryptocurrency became popular. I think that it's probably fairly safe to say that AI applications have considerably more potential to provide utility than does cryptocurrency.
Tollana1234567@lemmy.today · 1 pts · 232d
OPENAI is probably the one that will be set to lose the most, and then oracle? i dont know if palintir fits into this, but THEIls company have been desperately trying to peddle his services to multiple countries already.
Buffalox@lemmy.world · 71 pts · 232d
Enron was cooking the books hiding huge deficits, and spending the money from the workers pension funds, so no Nvidia isn't Enron, but that doesn't mean it's all good.
Enron was the absolute worst, only matched by the Bernie Madoff pyramid scheme and the Bankman Fried crypto fraud.
Saying you are better than that is a very bad look.
edgemaster72@lemmy.world · 41 pts · 232d
Buffalox@lemmy.world · 20 pts · 232d
Joke aside, that's kind of the vibe it gives off.
Passerby6497@lemmy.world · 26 pts · 232d
You can't steal from employee pensions if you don't offer a pension
cecilkorik@piefed.ca · 9 pts · 232d
The pension was already stolen before it had a chance to exist.
e461h@sh.itjust.works · 10 pts · 232d
Especially since they made the comparison on their own! Relevant article: https://www.wheresyoured.at/nvidia-isnt-enron-so-what-is-it/
zebidiah@lemmy.ca · 51 pts · 232d
If a company says they are not like Enron, it means they 1000% are exactly like Enron
chiliedogg@lemmy.world · 18 pts · 232d
Yeah. Enron's scheme was trading money back and forth with itself to inflate its value until it all came crashing down, tanking Enron.
Nvidia is at the center of a scheme involving the entire economy trading money back and forth between a few companies to inflate value, so when the scheme tanks it'll crush everybody.
Sirdubdee@lemmy.world · 36 pts · 232d
Big tech is just trading the same $100b between each other to generate infinite shareholder value.
AdolfSchmitler@lemmy.world · 19 pts · 232d
Man that reminds me of an old comic where two guys give each other the same $50,000 back and forth to eat horse shit and in the end their like, "we just created two jobs and grew GDP by $100,000!" Lol
vacuumflower@lemmy.sdf.org · 3 pts · 231d
In Russia it's an anecdote about two cowboys with one saying in the end "Bill, I think we've both just eaten shit for free".
Tollana1234567@lemmy.today · 5 pts · 232d
hot potatoes, but they do need someone to hold on to that 100bn debt, usually other industries outside the tech sector. thats why they peddle it so hard to trump, to be used with palintir, and then other services.
fodor@lemmy.zip · 29 pts · 232d
Remember that when the news article talks about the economy, it's mostly talking about rich people's yachts.
Obviously there are some people nearing retirement age who need their pension plans not to lose value rapidly, they do exist. But the vast majority of the money that is being discussed here, that a bubble might make or break, is millionaires and billionaires savings accounts... So when this bubble bursts and when these companies go bankrupt, to hell with the ultra rich. If we want to help out people who are struggling to live out their retirement because of the stock market collapse that will occur, let's do that, and let's just tell the billionaires to go to hell.
horn_e4_beaver@discuss.tchncs.de · 26 pts · 232d
A second order Enron you say?
cecilkorik@piefed.ca · 9 pts · 232d
Enron 2.0, bigger, faster, better.
Tollana1234567@lemmy.today · 1 pts · 232d
ENRON reimagined series, more likely
Jaysyn@lemmy.world · 23 pts · 232d
They are going to do a lot more damage then Enron when their bubble pops.
EDIT: LOL, found the techbro.
vacuumflower@lemmy.sdf.org · 1 pts · 231d
What if it's not a bubble?
So I tried using some AI chatbots to find a movie recently, it made up a few, none being the answer.
(The question was about a historical movie, made in perhaps 1970s by the feeling, set someplace in southern France somewhere around 1650s, has a few beautiful views of nature and castles ; one scene where a guard captain enters a room, asks a question, as a power gesture drinks a glass of wine on the table and a minute later falls ; another scene where for whatever reason a rapier fight happens in something like a tavern, two women in pastel dresses are descending by an open ladder from the second floor, seeing the brawl take our pocket pistols, one of them is stabbed with a rapier ; another scene where a guy is getting questioned with his feet over the fire ; another when another guy is climbing a tower clinging at brick mortars outside and hears guards' boots on the ladder very loudly ; when I was a kid and saw that, someone said it's an adaptation of something by Lope de Vega, but I'm not sure that's correct ; that's just in case someone reading this knows such a movie.)
But some googling sessions they do optimize, without you the user ever having to browse a webpage, and just getting a textual answer. That's a valid use.
And some other processes. They don't have to be useful for all things they are applied to, just some profitable.
andallthat@lemmy.world · 15 pts · 231d
Being a bubble does not mean the service they provide is useless. It means that the service is never generating enough profit to repay for the huge cost of providing it.
Would you pay 500 dollars a month to have the possibility to do your movie searches? Or alternatively, would you like your LLM of choice to counter that, having read all your emails and browser history, you are probably interested in a totally different movie that just happens to be playing now at a nearby cinema?
Because these AI companies are currently burning through literally a good chunk of all the cash in the world and they will eventually need to make even more gigantic profits to repay that cash. And the only one that is currently making money from AI seems to be NVIDIA, by selling the hardware that powers the AI giants.
I'm not saying that it IS all a bubble, by the way, as I can't read the future and these gigantic profits might well materialize in the future. I'm just saying that "bubble" and "useless" are different.
vacuumflower@lemmy.sdf.org · -1 pts · 231d
There might be a more direct parallel than originally intended in this with the explanation how one person works hard all day and makes less than another person who pushes a few buttons. The latter knows which buttons to push.
This technology is useless for my movie searches, but it might be useful in the same way as radar was for air defense.
BTW, I'm not sure what I'd choose if offered to pay 500 dollars for knowing what that movie is. There's one girl, if she'd be interested too to find that movie, perhaps I would.
So if such an expensive technology would allow this kind of nuanced search, and more seemingly efficient wouldn't, then we have a use case.
Or a model allowing to predict actions of other people sufficiently well, based on seemingly not precise enough data. However much it would cost, that would be justified, similarly to high-frequency trading, because it would operate on all existing value, not just what it generates.
I know, I was making two points, one is that everything is relative (what you've just agreed to), another is that it might not at all be a bubble.
CheeseNoodle@lemmy.world · 4 pts · 230d
On the air defence note, specialist systems are already amazing at tasks like this and can usually run fine on high end consumer tier hardware (up to a single server rack) rather than data centres with the power requirements of small countries. AI is here to stay but LLMs are absoloutely a bubble.
YeahToast@aussie.zone · 8 pts · 231d
Open AI has announced over $1trillion dollars in infrastructure spending. I think you'll find near on everyone agrees it's a bubble, just not agreeable how big or the timeline of the burst.
vacuumflower@lemmy.sdf.org · -5 pts · 231d
Well, one can say then also that US military is a bubble, it also hogs resources far bigger for the same results that poorer nations achieve. There are some things it does that can't be compared to others because nobody has the need or that much money, but what can be compared is not even factor 10+.
It keeps getting that funding because of the position in the world it occupies.
Or one can say that the Danish kingdom sitting on the Sound relying on custom fees for its budget and then going on adventures with mercenary troops was a bubble. That bubble was inflated and burst a few times before that happened finally (something-something Kiel canal), and for long enough periods of history that just was the reality.
It's a relative thing if something is sustainable or not. When people are talking about Earth being expected to exist for enough time to be more afraid of global warming and microplastics and such, it means that Earth's existence itself is usually assumed to be indefinitely sustainable in our frame of evaluation.
So what you said is true, but dotcoms also were a bubble.
YeahToast@aussie.zone · 3 pts · 230d
Global warming is already having impacts on marine life, weather patterns etc. I'm not quite sure if I understand your point here.
Yes they were, and a lot of money was lost. Much like AI. Many companies are pumping atronomical amounts of money into AI. They won't all succeed. There will be a significant loss of capital. AI will definitely stay in this world, but to what degree is the question.. enough to warrant over half the GDP of Australia being spent in a year by one company? Probably not.
anon_8675309@lemmy.world · 21 pts · 232d
OpenAI is more like Enron that NVidia I would assume.
UnrepententProcrastinator@lemmy.ca · 5 pts · 232d
Nvidia is Cisco in this analogy
pupbiru@aussie.zone · 3 pts · 232d
openai has practically no value and that’s well known… nvidia is paying companies to buy their chips and playing bullshit shell games
the difference is openai is a pretty well known unprofitable company, and they aren’t doing quite as much of the bullshit shell games. nvidia is selling to basically everyone, taking stakes in companies, giving weird deals… it’s bloody impossible to track how much of their sales are real and how much those real sales are actually worth, or if those sales are loss leaders for some investment then those investments look a lot like openai
so nvidia not only is invested in a lot of very questionable AI bubble companies, but also their own sales figures are… unreliable
they’re making billions upon billions because they’re using their own money multiple times. it’s kinda like leveraged trading with all the risk and it’s incredible arrogant at the scale that nvidia is doing it
TankovayaDiviziya@lemmy.world · 19 pts · 232d
Me: Come on, pop already. There are funds betting on AI bubble burst, ready for me to invest in.
CandleTiger@programming.dev · 15 pts · 232d
If you want to get advantage from a speculative fund making a bet on a popped bubble, then you need to be already invested now, before the bubble bursts. (And also, you/your fund need to be right that it’s really about to pop now, and not later)
Once the race is over it’s too late to bet on the ponies.
shittydwarf@piefed.social · 18 pts · 232d
Narrator: it was Enron
Blackmist@feddit.uk · 16 pts · 232d
Nvidia is just selling overpriced premium shovels in a gold rush. They don't care if there's gold there or not.
Enron went bust by hiding debts. Making a loss is one thing, but lying about it to shareholders (and getting found out) is a one way trip out of the stock exchange.
VoodooAardvark@lemmy.zip · 15 pts · 232d
Regurgitating Zitron with kid gloves.
https://www.wheresyoured.at/nvidia-isnt-enron-so-what-is-it/
Corkyskog@sh.itjust.works · 4 pts · 231d
Lmao
MonkderVierte@lemmy.zip · 15 pts · 232d
This guy will happily sell your soul. I don't trust a word he says.
mesamunefire@piefed.social · 14 pts · 232d
The SP500 is starting to look like NVIDIA -> companies NVIDIA is investing in -> everyone else. Its starting to get NVIDIA heavy. If they go down...SP500 is gong to look terrible.
UltraMagnus@startrek.website · 11 pts · 232d
It's a bad position to be in. If they crash it will be bad, but if they keep growing and then crash it could be worse.
tempest@lemmy.ca · 9 pts · 232d
Perfect place to be in to get a bailout. Nothing better than to pump it to the max and try and make it some one else's problem
KindnessIsPunk@lemmy.ca · 6 pts · 232d
America is about to learn the lesson Nortel taught Canada.
Kolanaki@pawb.social · 10 pts · 232d
"We are not Enron, damn it! They were an energy company, we make computer parts!"
tja@lemmy.world · 10 pts · 232d
Formfiller@lemmy.world · 10 pts · 232d
Wall Street is Enron now. It’s a house of cards
skozzii@lemmy.ca · 9 pts · 232d
The bigger they are, the harder they fall.
MadMadBunny@lemmy.ca · 8 pts · 232d
They’re right in the sense that it isn’t Enron; they’re gonna make it way worse.
XLE@piefed.social · 7 pts · 232d
...Saying in a memo that was suspiciously, conveniently leaked and just so happens to claim everything is fine
booly@sh.itjust.works · 7 pts · 232d
My "We're totally different from Enron" accounting report has a lot of investors asking questions answered by the report.
Mediocre_Bard@lemmy.world · 7 pts · 231d
peopleproblems@lemmy.world · 7 pts · 232d
Well, "Thou shalt not create a machine to counterfeit the human mind" was pretty clear in the 1960s but what do I know?
termaxima@slrpnk.net · 6 pts · 232d
NVIDIA isn't Enron but they definitely are Cisco.
Kiernian@lemmy.world · 5 pts · 232d
I'm curious. Economically speaking, what would happen if Nvidia pulled a "Steam" and had a "February sale" where some models of video card were discounted enough to lead to a massive spike in sales numbers? A big enough discount to generate a greater total net return on sales for the quarter despite the fact that they were sold at a lower profit margin per individual sale? Assuming limitations like "you must create an account with a residential shipping address that can receive no more than x cards at the discounted price per street address" or some such to limit scalping, would simply showing increased profits do them any good?
Or is the problem due to a lack of product quantity?
tburkhol@lemmy.world · 16 pts · 232d
Steam can do massive numbers spikes because they have essentially infinite inventory. The whole reason scalping video cards works is that Nvidia can not make as many as people want, even at full retail price. The existence of scalpers implies that Nvidia could raise prices, sell slightly fewer units at higher margin and get greater total return.
A_Random_Idiot@lemmy.world · 5 pts · 232d
Which is why their latest generation of cards costs almost a thousand dollars or more.
Rekorse@sh.itjust.works · 3 pts · 232d
I still don't understand why anyone would pay those prices vs AMD cards now.
SinningStromgald@lemmy.world · 5 pts · 232d
NVIDIA is not Enron but they will definitely
looselose a great deal when the AI bubble pops.lolola@lemmy.blahaj.zone · 5 pts · 232d
LOSE
SinningStromgald@lemmy.world · 4 pts · 232d
No idea if that was autocorrect or stupidity.
popekingjoe@lemmy.world · 0 pts · 232d
A little of column A, a little of column B.
the_q@lemmy.zip · 5 pts · 232d
ThanksObama@sh.itjust.works · 14 pts · 232d
BlackVenom@lemmy.world · 2 pts · 232d
Who's seeing this person with positive vibes?
LordMayor@piefed.social · 5 pts · 232d
I would say, “never trust a CEO who wears a leather jacket.”
I’ve know plenty of bikers, punks, artists, etc that wear a leather jacket. But, a CEO in one stinks of, “hello there, fellow plebs.”
KryptonNerd@slrpnk.net · 1 pts · 232d
I would say never trust a CEO
FE80@lemmy.world · 4 pts · 232d
This is more MCI Worldcom than Enron.
C1pher@lemmy.world · 3 pts · 230d
Just crash and burn already please, so other companies can rebuild and take your place. Please, for the love of god.
BarbecueCowboy@lemmy.dbzer0.com · 3 pts · 232d
I don't know if it's just me or maybe dude is just getting older or photographers prioritizing different things, but I kinda love recent pictures of Jensen Huang.
Lately, I feel like whenever he is talking to anyone he always has this face that makes it seem like he's wondering if whoever he's talking to is going to finally be able to convince the world that all of this is falling apart and he's wondering "Is this where this train finally goes off the rails?".
Tollana1234567@lemmy.today · 2 pts · 232d
hes probably stressing out in behind the scenes.
nutsack@lemmy.dbzer0.com · 2 pts · 232d
does Nvidia have any competitors? I don't think Nvidia can go bankrupt
Mistic@lemmy.world · 3 pts · 232d
You can never be too big to fail
P.S. No, I'm not saying that Nvidia's going bankrupt
Knock_Knock_Lemmy_In@lemmy.world · 2 pts · 232d
Nvidia has cuda. Most ai only used cuda so only uses nvidia, but people are working too get over that particular moat
TankovayaDiviziya@lemmy.world · 2 pts · 232d
Nvidia has competitive edge. They won't go bankrupt but they they will undermined heavily when the AI bubble pops.
SocialMediaRefugee@lemmy.world · 2 pts · 232d
Just tell me when the memory shortage ends.
gamis44@lemmy.myserv.one · -3 pts · 232d
reply to me with images of AMD-chan, anyone who doesn't comply I'll block.
Decayingskulls89080@lemmy.world · -5 pts · 232d