I mean, you can joke about circular financing, but it’s revenue until someone’s check bounces.
What we’re looking at is effectively how governments operate with currency. The state extends credit to financial institutions and spends money into the private sector, then demands the money back as taxation. This milling effect incentivizes employment, capital expansion, and improvements to land, as residents attempt to leverage the state incomes/credits to produce more material value than they’ll pay in taxes.
NVIDIA / OpenAI / Oracle are in the same relationship. And the cycle will continue to accumulate value virtuously until the output of the system is no longer recognized as yielding value. While OpenAI is definitely the weak leg in the stool, Oracle’s physical infrastructures and NVIDIA’s consumable chipsets are going to have value even outside of this relationship. The only question is whether OpenAI tokens can justify the liquidity the firm has received.
Yes, but a country’s gdp is a lot more diversified than nvidias, and company bond holders have a lot more power than treasury bond holders. The party goes on for now, but there is no way these companies will keep being allowed to borrow money, and it will be clawed back due to how unprofitable these businesses are.
All of these companies except Nvidia have massive debts, and it will lead to them going bankrupt.
OpenAI’s models are worthless and they will go bankrupt. Oracle’s hardware will become worthless and they will go bankrupt. Nvidia’s hardware will become worthless, but they have paid for all of their fab capacity in advance, so they will just lose a shitton of money and become the modern day Cisco.
a country’s gdp is a lot more diversified than nvidias
Glances at Taiwan and South Korea
The party goes on for now, but there is no way these companies will keep being allowed to borrow money, and it will be clawed back due to how unprofitable these businesses are.
I’m having a hard time imagining a world where Nvidia isn’t considered credit worthy. A lot would have to change.
OpenAI’s models are worthless and they will go bankrupt. Oracle’s hardware will become worthless and they will go bankrupt.
Even assuming these two firms won’t be at the front of the line for the next government bailout, we’re a far cry from “worthless”.
Both firms are heavily embedded in the government contract space, which is a blank check on your worst day. Both are heavily integrated into the financial and O&G sectors, which aren’t going anywhere.
We’re talking tens, if not hundreds of billions of dollars in guaranteed future revenue going out to the next decade easy.
Possible they get drowned in interest payments and end up becoming glorified debt servicing companies. But we’re a far cry from either being zero’d out.
Oracle’s infrastructure will still have value, however that doesn’t mean the company can’t crash and burn for its assets to eventually be sold. To my knowledge Oracle, by now, is basically dependent on OpenAI contracts financially. If OpenAI falters Oracle wouldn’t be able to survive without someone even bigger stepping in and keeping them afloat.
I mean, you can joke about circular financing, but it’s revenue until someone’s check bounces.
What we’re looking at is effectively how governments operate with currency. The state extends credit to financial institutions and spends money into the private sector, then demands the money back as taxation. This milling effect incentivizes employment, capital expansion, and improvements to land, as residents attempt to leverage the state incomes/credits to produce more material value than they’ll pay in taxes.
NVIDIA / OpenAI / Oracle are in the same relationship. And the cycle will continue to accumulate value virtuously until the output of the system is no longer recognized as yielding value. While OpenAI is definitely the weak leg in the stool, Oracle’s physical infrastructures and NVIDIA’s consumable chipsets are going to have value even outside of this relationship. The only question is whether OpenAI tokens can justify the liquidity the firm has received.
Yes, but a country’s gdp is a lot more diversified than nvidias, and company bond holders have a lot more power than treasury bond holders. The party goes on for now, but there is no way these companies will keep being allowed to borrow money, and it will be clawed back due to how unprofitable these businesses are.
All of these companies except Nvidia have massive debts, and it will lead to them going bankrupt. OpenAI’s models are worthless and they will go bankrupt. Oracle’s hardware will become worthless and they will go bankrupt. Nvidia’s hardware will become worthless, but they have paid for all of their fab capacity in advance, so they will just lose a shitton of money and become the modern day Cisco.
Glances at Taiwan and South Korea
I’m having a hard time imagining a world where Nvidia isn’t considered credit worthy. A lot would have to change.
Even assuming these two firms won’t be at the front of the line for the next government bailout, we’re a far cry from “worthless”.
Both firms are heavily embedded in the government contract space, which is a blank check on your worst day. Both are heavily integrated into the financial and O&G sectors, which aren’t going anywhere.
We’re talking tens, if not hundreds of billions of dollars in guaranteed future revenue going out to the next decade easy.
Possible they get drowned in interest payments and end up becoming glorified debt servicing companies. But we’re a far cry from either being zero’d out.
Oracle’s infrastructure will still have value, however that doesn’t mean the company can’t crash and burn for its assets to eventually be sold. To my knowledge Oracle, by now, is basically dependent on OpenAI contracts financially. If OpenAI falters Oracle wouldn’t be able to survive without someone even bigger stepping in and keeping them afloat.
Yes. I knew some uc and Xavier kids when I was a student from elsewise, they knew how to play cards
Good on you for having a coherent defense for your investment. Your bad investment. But I do like you