Apparently NVIDIA has been fabricating revenue, whereby they invest into genAI startups and in turn said startups buy their GPU. I’ll post the sauce. Info gathered by JustDario @DarioCpx and Kakashii @kakashii111 on X.
This was already well known.
At least GPUs are more useful than crypto
That’s not the point. The point is that this is illegal and many well-meaning tech employees could be axed because of it.
Reminds me of Microsoft and OpenAI.
Someone shorted and is angrily tweeting from the homeless shelter. 😁
This is a common practice: I will buy your shit and you buy mine. Win Win 🧨
It’s not “I will buy your shit and you buy mine”, it’s I put money in this startup and make them buy my shit, and report it as revenue. They can report unlimited revenue with this like-Ponzi scheme.
For youngsters on this app. This accusation is similar to what Nortel (Canadian tech giant) did. Bought tons of dotcom internet startups and fabricated as revenue. Not reporting losses. Went bankrupt, executives made sure to cash out as much as they could. Regular employees got nothing of course.
So you think nvidia is in a similar situation? Do you doubt about the demand for their chips? I know it’s wrong and there could definitely be a market correction but don’t they still have the best GPUs on the market?
Hard to say, they are able to sell to China some chips but their top rated ones no. The market has priced NVIDIA for quarterly earnings continuously hitting 15+ billion in revenue or thereabouts without understanding the cyclical nature of this industry.
Here’s more sauce on NVIDIA. They’re avoiding U.S. sanctions by selling to Chinese shell companies in third-party countries. https://asiatimes.com/2024/01/china-gets-banned-nvidia-ai-chips-via-gray-markets/
This is just downright agenda. Singapore has a strong economy with a ton of start-ups. Also NV is avoiding China sanctions by selling slower chips is what I read. There are always loopholes in regulations on tech that can be overcome by minor tweaks.
Calling Singapore a third world country just shows your ignorance.
Per Kakishii: Nvidia has participated in some of the largest AI rounds of this year to companies like: 1. Inflection AI ($1.3B Series B) 2. Adept ($350M Series B) 3. Cohere ($270M Series C) 4. CoreWeave ($221M Series B) 5. Mountain View ($125 million Series B) 6. Imbue ($200 million Series B) that valued the AI research lab at $1 billion (!) 7. AI21 Labs’ $155 million Series C at a crazy valuation of $ 1.4 billion (!) 8. Most recently, Nvidia backed Hugging Face’s $235M Series D. The deal values Hugging Face, which offers open-source tools for developing AI, at $4.5B — reportedly a 100x premium on its annualized revenue (!) All of the startups the chipmaker has invested in are in turn using Nvidia’s chips. Inflection AI, for example, is using its latest raise to build the “largest AI cluster in the world” with 22,000 of Nvidia’s H100 chips. CoreWeave raises $2.3 billion in debt collateralized by Nvidia chips What will happen in post AI-era? 1. Nvidia will take losses in paper in these crazy valuations 2. Startups that either will file for bankruptcy or face liquidity problems will sell their Nvidia GPUs. 3. the market will float with lots of Nvidia second-hands GPUs 4. Nvidia Margin will be impacted (that's without taking competitions from AMD/Intel/etc)
How is this different from Microsoft investing in openAI and openAI using azure cloud in return? PS: Not trying to oppose your point, I’m genuinely curious.
USA Government provides line of credit to countries to buy goods and services from USA. If that is healthy then Nvidia investing in AI companies' business is the same. NVIDIA might either be explicitly mandating the companies to buy from NVIDIA or just be investing in the AI businesses that it trusts and in turn hopes that AI gets mainstream which in turn can be good for NVIDIA. I get your concern but i am also offering a counter perspective.