c/fuck_ai · by BananaTrifleViolin@piefed.world · 13d

The House of Ellison is on the Brink

https://www.notesfromthecircus.com/p/the-house-of-ellison-is-on-the-brink

Everything the world’s briefly richest man built is failing at once.

136 points · 23 comments · view on lemmy.world

23 Comments

BananaTrifleViolin@piefed.world · 56 pts · 13d (3 replies)

I found this article very interesting; the author is shorting on Oracle and makes that clear. But they give a convincing and cogent argument about the severity of the AI bubble and where it's going, with links to interesting news stories and opinion pieces throughout.

The circular flow of cash between AI companies, and the Enron style revenue inflation is laid out in a clear way. It's scary that such crazy behaviour is going on in the markets, and it seems the markets are catching on.

TheLegendaryAssholeOfJushinLiger@sh.itjust.works · 5 pts · 13d (2 replies)

And Chinese AI is rapidly closing the distance. To the point that I can run an AI on my computer that is better than GPT 5 was.

eleijeep@piefed.social · 2 pts · 13d (1 reply)

What are your computer specs?

TheLegendaryAssholeOfJushinLiger@sh.itjust.works · 1 pts · 12d

Pretty high. I have a 3090 and 64 gb of ram

4am@lemmy.zip · 47 pts · 13d

ORACLE = One Rich Asshole Called Larry Ellison

pelespirit@sh.itjust.works · 32 pts · 13d (6 replies)

Fuck, fuck, fuck, fuck, fu...

Then there is CoreWeave, the cleanest loop in the pile. Nvidia holds an equity stake in CoreWeave that it has kept topping up. CoreWeave raises debt collateralized by the GPUs themselves and spends the majority of everything it raises buying Nvidia hardware. And Nvidia has agreed, per CoreWeave‘s 8-K, to buy back $6.3 billion of whatever capacity CoreWeave fails to sell, through April 2032. Vendor, investor, and buyer of last resort: one company, all three seats. And who rents the capacity? Microsoft alone accounted for about two-thirds of CoreWeave‘s revenue — the same Microsoft that owns 27 percent of OpenAI, which holds its own $11.9 billion CoreWeave contract. Four companies, and every dollar visits all four before it rests.

Senator Elizabeth Warren, in a formal letter to Sam Altman demanding answers about the spending commitments, wrote that OpenAI “appears to be privatizing profits while seeking ways to let the public defray the costs of any potential failures of its business strategy.”

For scale: Enron‘s entire final-year revenue was about $100 billion; the Oracle–OpenAI contract alone is three times that. Enron‘s peak market value was roughly $70 billion; Nvidia‘s is five trillion. The Bank for International Settlements — an institution constitutionally incapable of hyperbole — compared the AI buildout to canal mania, railway mania, and the dot-com bubble, and observed that “these episodes ended with an eventual reversal in investment, inducing economy-wide recessions.”

Cricket@lemmy.zip · 18 pts · 13d

lemmyman@lemmy.world · 5 pts · 13d (4 replies)

I have read many descriptions of these "loops" and I still don't get it. The articles use words like "pledge" and "collateralize" that have nebulous meanings.

I get accounting on a basic level. I took managerial accounting in college and I am the bookkeeper and tax accountant for my one-person business. But I don't get this, despite some moderate attempt.

Also over the years I've found that things I can't understand after a little effort are certainly out of the reach of lawmakers, who barely care about facts at all in the face of all the political pressure they are under.

So I don't get it, but it sounds skeezy as fuck to me, and we're all fucked.

pelespirit@sh.itjust.works · 8 pts · 13d (3 replies)

You don't get the loop because it's a scam at its core. It's magic accounting by renting and selling "products" to yourself, other companies you made that are ultimately yourself, and other companies in the loop.

lemmyman@lemmy.world · 2 pts · 13d (2 replies)

I guess I'm trying to understand the mechanics of it. Where do these things show up on financial statements. Admittedly I haven't dug into it past trying to comprehend a few articles. I just wish the articles covering this laid it out in those terms rather than using ambiguous words like "pledge"

pelespirit@sh.itjust.works · 4 pts · 12d (1 reply)

rather than using ambiguous words like “pledge”

They use these vague terms because that's what they vaguely did. I'm sure what they're doing is highly illegal and they're setting up the blame game as we write back and forth.

I'm positive they're using these "pledges" to tell everyone bullshit numbers about their company's value and assets. You would need a murder board to figure it out and explain it. Did you see the chart someone posted above? It's that confusing and why they (and Enron) get (got) away with it for a long time. When it starts collapsing is when everyone realize what hit them. This is going to be a shitty, shitty time for all of us since every day people are going to be the ones bailing them out. These are all companies "too big to fail."

protist@retrofed.com · 2 pts · 12d

I saw a great YouTube vid that went through whether what they're doing is illegal, and the conclusion was no. It's not illegal, because all of this is happening in broad daylight and can be found laid out in their financial disclosures, although sometimes in footnotes and jargon. In this article even they mention how unlike Enron, which internally cooked its books, these companies are being propped up by public market reactions to press releases, which is not illegal. It's still a house of cards though.

I've gotten rid of all my large-cap index funds in my 403(b). By their nature, they invest so much money in the companies listed above. My money's on small- and medium-cap American companies to weather the impending crash, as well as on European and Asian companies.

friend_of_satan@lemmy.world · 22 pts · 13d (3 replies)

On the morning of September 10, 2025, Larry Ellison was the richest man alive. … his net worth cresting at $393 billion. He was eighty-one years old

Dude. Why can't he just retire and enjoy the rest of his life with all of his stacks of money? He could spend $50m a day for the next 20 years and still have money left over. Why does he need more?

yeahiknow3@lemmy.dbzer0.com · 22 pts · 13d

The only way to have that much wealth is to be insane. You can’t reason with these creatures, whose minds and motives are so alien, because they don’t “think” or “reason” the way you do. Their decisions are simultaneously algorithmic and aberrant. Their eyes are blank, their smiles plastic (often literally).

There’s no one home.

TheLegendaryAssholeOfJushinLiger@sh.itjust.works · 5 pts · 13d

I miss when billionaires were guys like Richard Branson. Now we just have lifeless zombies who are hoarding their money like miserly dragons. At least at one point, while obscene, it was at least, idk, entertaining?

protist@retrofed.com · 1 pts · 12d

Net worth is different from what someone has available to spend. In the article, it states he doesn't have even close to enough liquid assets available to cover the $40 billion irrevocable commitment he made to help his son buy Paramount.

That said, dudes got plenty enough to have retired

CultLeader4Hire@lemmy.world · 15 pts · 13d

He literally owns one of the Hawaiian islands

brem@lemmy.world · 11 pts · 13d

Oh Larry

Lookin' scary

Typical villainous billionaire

Got a stare that scares 'Care Bears' into fuzzy little balls of despair

Why can't the greedy and worthless self immolate?

'Prolly because they too busy watchin' immigrants weave whips for them to self-flagellate

chunkystyles@sopuli.xyz · 10 pts · 13d

Please! Please? Can it really happen, please? I need this.