I am not sure how inference constrained we are, btw. As an enterprise customer, I have zero problems with 429s and capacity from google or aws. All large volume inference jobs - so customer journey bots that help our company make money - run on dirt cheap models kept on short leashes in custom harnesses. Message delivery costs us 10x more than inference (with meta price hikes of October). All long-horizon jobs such as coding are probably somewhat inference constrained, but only to the point that sometimes the devs and corporate users with their own agents wait a bit for something to be completed, but nobody is noticing it. Sure, one notices a difference between /fast mode and normal while building software, but nobody really has a reason to care much, /fast modes are a pure luxury thing outside of incident remediation. I don't see what would Anthropic actually do if they had 10x the compute or 100x the compute they are planning for. Surely, some new business models, trolling mathematicians at a larger scale maybe?

Reducing circular financing agreements seems like ... a good idea?

> in response to which Huang allegedly lay into Kress, calling her a "deer in the headlights,"

see: circular financing agreements

I also feel this is a good thing. Looks like the elephants in the room are being addressed.

Over the course of the meeting, he proceeded to tear into the woman who is now taking over for him as Nvidia CEO.

Colette Kress was "a deer in the headlights," he said, interrupting her presentation, according to a person familiar with the comments.

He had summoned Kress and his senior finance team to diagnose a ballooning problem: Nvidia was in talks to provide billions of dollars of guarantees to companies that couldn't afford its chips. That included deals led by Huang's son-in-law, Nico Caprez, who had been offering upstart cloud providers and data-center developers financing in the hopes of turning them into long-term customers.

Huang had launched a dealmaking spree and was now starting to question whether it had gone too far, according to people familiar with the matter.

Kress was a "reporting CFO," not someone who could help him define a strategy or make decisions, Huang said during the August meeting.

I’m so ready this time, CFO at the helm

One problem is that there isn't one number that indicates what percentage of Nvidia's equity investments come back to it in the form of chip purchases. In some cases, it appears it's 100%; in others, it has been suggested that every $1 invested produces >$3 in revenue. $1 invested for $1 in revenue versus $1 invested for $3 in revenue are really different outcomes.

There are also the questions of the revenue and revenue quality of the companies Nvidia has invested in, how much debt they've taken on, what sort of backstops/guarantees Nvidia has given them, etc.

And why couldn't a single number be calculated for this? They know their portfolio companies, their investment amounts, and the portfolio company purchases of their products.

> There are also the questions of the revenue and revenue quality of the companies Nvidia has invested in, how much debt they've taken on, what sort of backstops/guarantees Nvidia has given them, etc.

These are generally good things to look at for all corporate investments.

The main takeaway is that Nvidia investing in their own customers isn't inherently a bad thing. Investing in a poorly performing company is a bad thing.

They probably could calculate it but they're not required to and, if we're being honest, they probably don't have an incentive to.

> These are generally good things to look at for all corporate investments.

They are, but the issue with Nvidia is that the web of customer relationships, equity investments, financing, backstops, etc. is very hard to untangle. Not every counterparty is publicly-traded, and even when they are, not every aspect of their business that would go into this sort of due diligence is necessarily required to be reported.

What seems to be the problem?

Some of the deals look really good on paper, and others look like $1 in equity investment produces $1 in revenue.

You also need to factor in whatever non-equity financing Nvidia extends to these buyers, how much debt they've raised from lenders and what backstops Nvidia has committed to.

Investing a bunch of money in a company that is heavily indebted, and committing yourself to buying significant amounts of any unsold compute might not be so smart, especially if that company has only one or two big customers.

So this is the real problem with Nvidia: it has all these deals, some of which might be totally sensible and others that might be WTF, and it's really hard for investors to figure out what the "portfolio" looks like overall.

It doesn't make recurring revenue, either. Not without fresh cash infusions into all the startups.

Largely means P/E is a useless metric here, investors don't get to see their short term net profits, and even if they do see it, those don't extrapolate to future years/decades.

We've got a lot of investors out there not thinking about this with a level head, they just see %%% growth and a "low" P/E.

I know people that dont even know what P/E or market cap means but purchase stocks based on ticker price. They think <$100 means a good deal for a big company. Should stock splits be forbidden to protect them?

https://tweakers.net/pricewatch/2290192/nvidia-rtx-pro-6000-...

The author is a developer working on software that scales to 1,024 cores and greater -- which is within spitting distance now thanks to 256-core AMD EPYC processors. If you count hyperthreads as a "virtual core" then a dual-socket system gets you there!

That blog made me realise that almost all software can't utilise 1,024 cores, not even close! Microsoft SQL Server, as a random example, tops out at 64 cores for any single query.

Similarly, people couldn't utilise a machine that big, not with pre-AI software, except for certain embarrassingly parallel codes such as simulations and 3D graphics rendering.

Now... NOW... there's no upper limit. None. One person(!) can cheerfully utilise millions of cores, billions even, and there's no end in sight.

If you think one conversation thread in "ChatGPT" is all we need, you're not seeing the big picture of what's possible here.

Those math proofs OpenAI produced were created with tens of thousands of agents running in parallel, orchestrated by thousands more agents, and overseen by hundreds of agents, all triggered by someone typing as little as a sentence or two to start that avalanche of compute!

With that kind of AI power at your fingertips, huge, unthinkable projects become a fun exercise for the weekend:

- Translate the entirety of Wikipedia to every human language.

- Rewrite the entire Linux kernel to Rust in one go

- Rewrite all open source C code to Rust.

- Formalise every maths paper ever written.

Etc, etc, ... without end, without bound.

Sure you can do all these things you mentioned but eventually even if it was free they would be done and doing some of these things your self would be annoying and a waist of time. Once some has formalized a proof why would some do it again and why would some one rewrite a program again, it will still take time and human effort over just using it. If you just spend 1 minute with each agent of your say 10000

I really don't think most people want to be running tens of thousands of agents and would not find a need for that many agents. if you it takes you just 1 minute of looking at output of your agents that would take you 1 year and 52 days. I think you have to admit there is a limit. Though I could find busy work for my agents, you could do the same with computing before hand such searching for primes, there is a limited thing that people want out of their machines is my point and people who would run such things would be a minority if they exist at all.

Your other point stands tho - there might be a point where there is not much left to do. Most problems solved, and remaining require more agent hours than there is energy in the universe. Or not. Who knows.

I share your enthusiasm, but only directionally. :)

IMO its copium to think that chips which have 10x more demand than supply are suddenly going to be easy to get as "AI is eating the world" like software did over the past decades.

Secondly that the frontier model providers will not necessarily want to buy these up as the aforementioned lower demand for training (or costly and memory intensive training) and cost of inference goes down (and possibly requests as the models get better or at least plateau).

Further TPU's and if model weights do eventually stabilize then ASIC's might make more sense.

And lastly as models improve and make less mistakes the requirement trying things in parallel traditional compute may also go down. I think their is a quantity intercept (The demand for compute if it cost nothing would be a finite number and may go down rather then up with advancements in cheaper inference and accuracy) for compute both AI inference and traditional compute.

That leaves the real buyers who are also starting to run low on capital.

Finally, demand doesn't need to go to zero for there to be a price correction. Just dipping from insane demand to elevated levels would lead to a significant price drop.

I think there are two sides that want a particular outcome one want gpu's to get cheaper (like I admit I do), others want there investment to work out (both might want to huff copium at some point, who is huffing here is not easy to tell).

Similar to the fact that supply of consumer RAM is currently low.

For anyone wanting to do so - you can! You have to make sure you nail the pad thickness though. That can be tough because it can have changed between revisions of the same card. Thankfully, AI is pretty good at combing through past data to figure out what you need. Also it voids your warranty.

https://www.theguardian.com/technology/2025/dec/28/nvidia-in...

A different question might be, will these companies grow over the new few years?

If I give you 10 Million GPU in exchange for 25% of the company and the company goes bust or has negative growth (and thus is forced to sell assets), effectively I just put 10M GPUs on the market with a huge discount.

At a grand enough scale, this undermines the GPU marker and one could argue that Nvidia has been doing this on a massive scale.

Yes, they are literally doing exactly that. Noting that they aren't truly "buyers" so much as "gift recipients" (in exchange for ownership stake, but the value of their remaining ownership also goes up if these gifts generate sufficient hype for investors to invest more). GPU production is outstripping datacenter capacity.

> But presumably those gpus are being actually used by those companies?

But, even if they were all being used, this wouldn't mean much. The central point is: suppose Nvidia has produced 10 million[1] datacenter-class GPUs during the LLM bubble. Nobody can afford to, or is willing to, buy 10 million datacenter-class GPUs because the economics don't work out. But if they gift 10 million GPUs, and frame it like they sold the GPUs (a framing that is effective -- although this has been an open secret, this is being reported like news by the WSJ, and to the majority of their readers, it is news), it makes Nvidia GPUs appear to be extremely desirable. Even though, logically, an item that you have to give away because it's not economically worth its market price is the exact opposite. The fact that you can use goods that you've effectiely been given for free does not increase the actual economic value of those goods.

[1] (hypothetical number, it's vaguely around this order of magnitude)

https://www.datacenterdynamics.com/en/news/microsoft-has-ai-...

> Microsoft CEO Satya Nadella has said the company has AI GPUs sitting idle because it doesn’t have enough power to install them

https://www.businessinsider.com/amazon-nvidia-ai-gpu-data-ce...

> Some AWS sites had room for more racks but not enough available power to turn them on

> At least one AWS team did not have "a clear forecasted path" for getting the incoming racks into data centers at the time

There is a fundamental difference from being able to profit on running some number of GPUs, and being able to profit from running 1 million GPUs. We do not have a business case for 1 million GPUs. Our startup's premise is that there are economically viable niches to use LLMs as tools, which is in stark contrast to OpenAI and Anthropic who are at least publicly selling the idea that LLMs are a form of genuine intelligence that will replace all human labor if you just give them another $10 billion dollars, and then another $10 billion dollars, and then another $10 billion dollars, .....

The bubble popping will actually make business cases for GPUs much more common to come by, when businesses can acquire them for closer to their cost of production rather than at the insane markups Nvidia currently lists them for. But that won't do Nvidia much good, because Nvidia's valuation is predicated on being able to "sell" as many GPUs as they can produce at a 10x markup over the cost of production - even if much of what is being "sold" is really being given away for equity in businesses that are not financially viable.

Is this a hypothetical gap or do you have actual numbers to back this up?

(Consumer sub prices were used for illustrative purposes but this obviously applies to token and enterprise spending as well. Although they're being a little loose due to FOMO, enterprises will not sign blank checks forever if the promised "replace all human labor" does not materialise)

Also, it goes without saying that a GPU that can not even be powered on for lack of power capacity is not being used profitably, at any price point. It could not be more apparent there is an oversupply relative to its current market price, which is a direct result of Nvidia giving away boatloads of GPUs for stakes in unprofitable companies.

OpenAI just seems like a black hole for money.

I think what you are describing is the sociological/ecological function of a bubble. We pull an unreasonable amount of demand forward, someone else pays for it and when the bubble implodes the good companies that survive the stress test get a free lunch.

Best of luck at the start up. That all sounds right to me. Real intelligence is specialized and ecological. The grand irony to me is that I would love to be an organism that can walk the way I do but also be able to fly like a bird and swim like a shark.

The problem is that organism would be massively too expensive to survive.

Agree with the rest of this though. This whole idea that Nvidia is likely to get much of a normal return from their vendor financing strikes me as tenuous, and what they really are getting is the creation of the perception of scarcity.

One day soon, the notion that GPU scarcity is a proxy for AI demand will finally lose its currency and I think that will be the start of the reckoning.

We are so use to the digital world and the efficiency of electronic markets that it is hard to think of physical constraints in the real world.

That isn't the issue - it's that building brand new datacentres + the power generation to run them takes a massive amount of time/permitting/money, and by the time those datacentres actually come online, you can be sure that the price pressure on inference will be sharply negative.

Nothing new, nobody pays a car cash anymore

there is plenty of electricity in china

If energy wasn't cheap, you wouldn't see people driving large vanity SUVs around in the least economic way possible.

It also requires major infrastructure to deliver that energy, which takes money and time to build, as do the datacenters.

Around 0.05-0.15% of the world population own such large SUVs.

While your datacenter is not built, guess where the AI chips are? That's correct. In boxes.

Are you sure about that? Might just as well be in Excel sheets only...

[1]https://www.techspot.com/news/114315-dark-gpus-amazon-show-l...

(AWS could have $20B of unused GPUs at this point — it's widely reported that there was at least $5B in August, with up to $3B more arriving each month)

https://www.businessinsider.com/amazon-nvidia-ai-gpu-data-ce...

We know that Satya Nadella has been open about how one of his big problems (as a CEO) is that he has bought GPUs he cannot plug in anywhere.

So 50%? Who knows. But if AWS and Microsoft can't plug them all in, why assume anyone else can?

The clear indication is that cold/dark GPUs delivered to major customers, GPUs that Nvidia has sold but still has on its shelves (buy and hold), and GPUs that Nvidia has sold, leased back from customers and may or may not have plugged into their own cloud, together represent a large enough proportion of sales to have pushed up the prices of GPUs and caused scarcity that is somewhat artificial.

If you take the scarcity of GPUs to be a solid proxy for assessing compute demand — or even for the sales of GPUs to be a solid proxy — then you are making a dangerous bet, IMO.

Step 2: still have money even though the financial bubble popped

Step 3: just buy them normally, at market prices

Nvidia is likely not going to surge back to $240 soon. It might go lower actually. Skeletons are still falling out of closets. Huang may have been the tech founder's tech founder, but he kept some pretty nasty company in recent years and, as we're now finding out, got both himself and his company into shady territory.

Is Nvidia slowing down for a year or two bad for AI as a technology? Probably not. Nvidia could find a leader that will return them to top form, or another company could take advantage of the situation to catch up and surge past. A lot of AI researchers have been calling for a pause or, at the very least, a slow-down. This might be just what was needed.

However, given Nvidia's utterly unique position as both hardware supplier and bank for the data centre build-out, what will the impact be on the rest of the AI sector? The market is going to have to price in a weaker and slower build-out as well as a loss of trust in Nvidia. That's clear downwards pressure. Is it a blip, or are we now past the peak?

As you say, if Nvidia is chastened enough to slow its banking endeavours and that lets air out of the bubble in a progressive rather than dramatic way, that’s probably better for everyone (except OpenAI, who are probably hosed in that scenario, as they have huge commitments but are struggling to raise what they need; Anthropic might last long enough to reassess)

Junk rating from a relatively high likelihood that they can’t pay the people they owe money to. If you buy their shares they are much more likely to go to zero than a more stable company in the near term. So you don’t want to buy anything Anthropic with money that you may need for anything.

High valuation because the public believe that if they do figure it out they could be worth hundreds of trillions. So a lot of people may want to buy it as a speculative bet of ungodly returns

Previous bubble villain Michael Milken and the 80s leveraged buyout bubble made it a name of common parlance because that bubble was built on "junk" bonds.

The old traders of that time who were against what Milken was doing called them "junk" and the name has stuck ever since.

It just means "risky". If you trade bonds it has no association with "bad". It is an inside bond market term, I think that is why it sticks too. It is a fun term if you trade bonds but terrible for communicating to the average person.

If you think it's terrible for communicating to the average person (and I am very much the average person) you could explain it yourself in detail.

So I will try:

You are right that it is a sort of consensus rating threshold maintained by the ratings agencies that means their (Anthropic's) debts are not considered investment-grade — that they are speculative, high risk, that they are considered likely not to be able to repay. It is ultimately the ratings' companies (and therefore some individual people's) decisions as to whether they are or are not junk-rated.

But for Anthropic it also means they will pay much more for their debt, they may not be able to negotiate long repayment terms, they may need to de-risk with underwriters by paying higher fees, they may be limited by the terms of any individual loan — it may limit how much future debt they are allowed to take on, may mean they need the lender's approval to restructure their business in even small ways, etc., and most importantly, some institutional investors (pension funds, mutuals, insurance companies, ETFs etc.) will be barred from investing (which drives why their debt will cost more).

Frankly I think it is baffling that Anthropic are still headed to an IPO when this is what it could look like on the other side.

Very loosely a 'high' (price over earnings) share price is about growth and exciting prospects; high or well rated bond is about stability. (Not to suggest they move linearly in opposite directions though!)

There used to be a time when people would invest over the course of decades and enjoy the dividends they received. But these days it’s all just about the short term rewards.

A company can get into the sights of "infinity believers" even if they try not to. Infinityists will honestly believe that the stock is a very good buy and whenever a "stability lover" has to sell, they will outbid the next stabilityist. Price goes up, it becomes more visible to infinityists and so on. Eventually infinityist will outnumber stabilityist and management will enter "or die trying" mode on promises they never made. Or be replaced.

OpenAI not being able to IPO I think is the huge indicator that we are in denial of.

The tide is starting to go out and we are starting to see who is swimming naked.

Jensen and the Jensenverse as the villain of the bubble is the prestige of this bubble's magic trick. That is a show stopper.

OpenaAI as Myspace I think is the second act, yet to come.

It's funny how the problem of Chinese models ended up affecting Nvidia and the US AI industry in general. Just not in the way it was predicted.

That’s just a bear market. Bubbles pop, otherwise we wouldn’t call them bubbles. If you call every downturn a bubble it ceases to be meaningful, and we’d have to come up with a better term for actual bubbles.

All of the investable assets will collapse at the same time. Inflation will evaporate cash. Bonds will worth nothing (if the us gov bothers to repay them).

I think part of a bubble is knowing the problems but participating anyway. Over time then the problems start to feel normal and while things are good you rationalize why maybe the problems aren't such a big deal after all.

Between the circular financing and behaviour some analysts call “channel-stuffing”, it does seem that with Jensen Huang gone, the music is perhaps about to stop.

Channel-stuffing, if it is happening, is usually plain illegal.

The implications are obvious: if people are using GPU scarcity and prices as a proxy for AI demand (and they absolutely have and still are, at every level), and use it as an indication that they must secure GPUs while they can, then it matters a lot if in fact that demand is being padded out and front-loaded in various ways.

How much % of car loans are vendor financed?

For example, here in the UK, that is extremely regulated, and you’re usually not buying with the dealer’s money, or the dealer chain’s money. Sometimes you are buying with the manufacturer’s money (through a regulated subsidiary finance company or joint venture) but most of the time you’re simply buying from a regulated finance company, from which the dealer is getting an introducer’s fee (and for which they must agree to be regulated).

(I am not a driver and have no car loans but I am reasonably familiar with the business model from previous client business)

It is my understanding that Nvidia is pretty directly using their own money for this: there is a criticism that they are essentially “selling their balance sheet as a service”, and that their total exposure is about $200 billion.

Nvidia’s loans are not, in that sense, particularly comparable to even the loosest definition of auto loans.

This is all putting aside how much money Jensen Huang has persuaded others to loan. Perhaps that side of things won’t go away; I think we might see him carrying on that function in some future capacity. But it will almost inevitably be at a much smaller scale, because the market is significantly less enthusiastic about lending more money.

You don’t need to when you have a few dozen customers. You meet with them and plot world dominance over cocktails.

Auto companies have the structure they do to support 1000s of dealerships and millions of customers.

Vendor finance of the kind Nvidia is doing is different: they are the single vendor for one thing, they are loaning to startups who otherwise might not get funding from banks, it’s coming from the same balance sheet as the product, and these loans are materially causing GPU scarcity.

In general, vendor finance of the kind Nvidia is doing is indicative of an uncertain market, and when it’s the only vendor and it causes the price of the thing to rise, that’s obviously bad.

The industry is very aware that it relies on this for its continuing growth and stability.

A financing company usually is fully taking the credit risk. They have to charge a high interest and hope their underwriting process is sound. That is generally the only way they make money from the transaction.

A vendor have give 0% interest or even a discount to financing customers because they are protected by the profit margin of the transaction. They can also have a looser underwriting process and take more credit risks.

It's basically the entire Anthropic IPO model too right? Start with the model, then get into productivity, design, and slowly other businesses and companies with your AI. I agree with another post here that Nvidia didn't seem particularly AGI pilled, but they are certainly DC pilled.

All told there have over $500 Billion in equity deals and "future commitments" like above since July and even more after that.

Even for a $4 Trillion company, that's still quite a lot.

IMO Jensen's affairs might have been leaked because of him being out of control and making too many deals like this. The board might have wanted to fire him, but not say the real reason.

Since these firms (neoclouds and AI startups) will get consolidated if Nvidia puts too much money into them, I assume the majority of their funds are coming from elsewhere.

So about a third, a sixth, and a twelth of their annual revenue respectively.

I think the larger concern is that both the revenue and agreements depend on Nvidia maintaining sales, market share, and capacity TSMC/etc... If they run into trouble on any of those fronts, their revenue and assets could take a hit from multiple directions.

> Corporate development-led AI equity investments alone exceeded $40 billion in just the first four months of 2026

The accusation in the headline is that this activity contributed to the general shortage of GPUs which would, if true, increase their pricing power and profit margins even on chips sold to other customers. So I don't think it's a direct comparison to their equity deals.

Is this the only reason Nvidia made money? No, obviously. But is it adding fuel to the fire? If there is a bubble will this make the fallout worse? Seems likely.

More importantly this suggests a second plausible reason the board might have wanted to wrest control of the company away from him. (The other hypothetical one being that he was doing illegal stuff.)

My theory is that once new CEO is found, especially if he comes from the outside, he will be highly incentivized to denounce past sins and disclose as much as possible to start with a clean sheet. I would bet that this is one of the main reasons the stock is tanking. House of cards is about to collapse, and that may be the trigger.

Very much this. If you read the article it mentions that the current acting CEO was against investing into startups and disagreed with Jensen Huang.

At best, financing like that means any honest competitor that doesn't get on the honey train is at massive market disadvantage.

Kinda similar to when niche gets flooded by VC money. Now anyone with better product will get out-competed by people that can sell at cost or below it because they can ride the VC honey train till the competitors are extinct and they have captured the market

I imagine the shortsellers and put option holders like that.

As a result they never seriously pursued frontier research for open models - which could have easily absorbed any excess compute they planned for.

On the other side their customers are rapidly becoming their competitors and will happily eat up spare capacity at TSMC if nvidia can’t fulfill its obligations.

:D

Investing in tooling so more people get on their stuff is direct return, but having yet another AI model is of little value aside from being a test bed for their AI tooling

Since the 2000s, they have been investing in tools designed to make their GPUs better for scientific work, and have been developing GPUs for those workloads.

https://fortune.com/2026/09/09/markets-agi-nvidia-singularit...

If it isn't AGI, it's at least something that shows that "AGI" is not a useful label. You wouldn't argue that we don't have Artificial General Flying because planes can't flap their wings.

Have you ever seen a bird? Lol

In any case that's kind of my point. The existence of small niches that bird are good at that planes can't do doesn't mean that we can't fly.

The existence of small niches like writing prompts and counting letters in strawberry that AI doesn't do doesn't mean that our jobs are safe.

People think "we don't have AGI yet because AI still can't do X, so we're safe from Y" without realising that Y doesn't really require X.

Nope, that was Fable.

Here’s the original article: https://www.wsj.com/tech/jensen-huang-colette-kress-nvidia-c...?

Seems like a great way to cash out at the top

"Banks allegedly engineered inflation by funding[1] consumer's spending"

[1] aka. credit cards

People who are inherently biased to select themselves upending any rhetorical appeals they are capable of the mythical perfect neutrality they appeal to via words

Isn't the "credit" that Nvidia extended secured by the value of the GPUs and Datacenters the creditors end up buying/building? If so then should the value of those things suddenly plummet Nvidia is left holding billions in junk debt?

I can likely reveal a whole lot of your biases and upend this phony notion we can't falsify over screen that you're pure in your neutrality

Trying to deny your real biological existence and inherent character flaws that come with is vanity

A neutral person would not have an opinion on negative or positive tone.

See Futurama for a comedic dramatization of the logic of the neutral character

https://youtu.be/zdL5HlJFdYw?si=acXYmps0t0i5CXNd

If you cannot wipe efficiently, you better make sure nobody else can too so that no-one can call you out on that.

But so far as we can tell, American proprietary models are more compute efficient than open models? They're also practically cheaper, if you factor subscriptions into account. Does that mean we should be decrying all the GPUs used for GLM, when they can be put to better use for claude or chatgpt models?

That wasn't my personal opinion, just guessing the mindset behind those who want to prevent competition.

Funny enough that seems to be the exact stance of OpenAI/sama.

https://www.tomshardware.com/tech-industry/data-centers/open...

Clouds are offering previous gen GPU capacity just fine

The more often you do it, and the greater the margin becomes due to squeeze, the dumber it is.

You get less and less of their company each time and you've already peaked because future funding rounds can't keep being valued higher.

The trick only works once but everyone thinks it's a perpetual motion machine.

Would Nvidia see their lucky day and operate like any rational iffy actor? Sure. But I think it's important to be clear on the fact that demand suddenly exploded with crypto, and then kept going.

Nvidia may not be a saintly actor, but let's be sure to not ignore the laws of supply and demand. But! I feel my grasp on the matter is fairly basic, and I'm sure there are other points that may add nuance here - and highlight uncool practices by them. But there are only so many foundries; they take a lot of time to spin up (to the chagrin of every nation state); and when demand goes up, prices generally follow.

Nvidia did a great job at engineering a central bank-style AI funding bubble for as long as possible. Unfortunately, Cisco did the exact same thing.

Before, there was denial about the circular financing bubble, now look at them believing that a crash is coming.

Unlike that weird technology "the web", the basis of the .com bubble. Turned out to have no value in it!

So all those vendor financed startup may die, taking the VC funds with them, but that is irrelevant to whether the tech stays around or not.

You then followed up by pointing out a way in which it's exactly the same as the .com bubble. One might even say it's their biggest common ground.

The problem comes in if my idea doesn't end up generating a return. NVDA has not only sold me my GPUs, but it's also leveraged itself to my return. Repeat this across many businesses, none of which are generating returns yet. This is why when/if this unwinds it's going to be pretty catastrophic. As Charlie Munger said, "There are only three ways a smart person can go broke: liquor, ladies, and leverage".

They're just another rank monopolist. We should celebrate their fall, maybe there will be room for some real competition.

How are you going to get more competition when the entry cost is so high? The only competition will be the Chinese willing to dump endless cash into this but they are not doing it out of the goodness of their hearts either and it will still take years. If NVIDIA starts to falter then in the short term things will get even more painful for consumers as AMD becomes the new crummy company people love to hate.

At which point customers are buying for hardware price/performance or performance/watt rather than because they care which vendor they're getting it from.

And then you'd still have the biggest companies making the highest performance hardware, but you could also get something from the RISC-V people which had e.g. half or a quarter the performance of the enterprise GPUs but the same amount of VRAM, for less money.

People seemed to be programmed to be sycophants or at least willing victims to rich and powerful people and companies, even as they royally screw them and empty their pockets. I never understood it. As the song goes: we'd make great pets.

The barriers to entry are not capital costs they are compatibility moats. Wake up and smell the coffee.

I also had the displeasure to work with nvidia. After years of pushing gaming cards on us for compute, the years I spent working with nvidia was full of conversations where they would list silly excuse after excuse as to why we should use the expensive enterprise-grade cards instead. All the while, we begged them to unlock driver features that were available to Quadro cards but not GeForce cards, features as simple as hardware acceleration pass-through on a remote desktop connection. It took them a full-on epidemic, where remote work became super common, to allow some of those features to GeForce cards.

So it's really on brand that they tried creating a fake scarcity to keep their prices up. I don't envy the situation Jensen is in but I won't be sorry for him.

That's no longer the case.

Connected. Complete lack of integrity.

If he cheats on his wife, and on his customers, he'll probably cheat on his shareholders. Hence having to quit before he's pushed.

But customers having to pay more due to NVIDIA milking them - now that's something that really would require mandatory jail time for all NVIDIA folks involved here, IF true and verified in court (right now we can only speculate, even if we have extremely convincing proof; the courts would have to come to such a conclusion at the end of the day; and for this, the court systems have to work. I have severe doubts the courts work in the USA right now. It seems a billionaires-controlled court. Why is the whole Epstein network not investigated? Why is only Ghislaine in jail? A single person master-minded +5000 sex slaves over some 20 years or so? How is that even logistically possible?).

It’s the task of every capitalist business in existence to “milk” their customers for the maximum amount of money they can for any given product. Everyone in business would be in jail by your metric.

Business are absolutely free to set as their task things like “long term sustainability”, or “quality” if they so choose

The society can easily change this simply by actually enforcing the anti-trust laws that are already on the books.

Such a complete failure of the market that NVIDIA hasn’t had any real competition. All of the vendors abandoned PC gamers though. Though the price choke point is memory, not cores.

Which makes me curious, if AMD did another HBM-based card like the Vega series, would that RAM be cheaper now than GDDR?

They do not. SR-IOV is only available on Arc Pro cards.

https://www.intel.com/content/www/us/en/support/articles/000...

https://www.phoronix.com/news/Intel-SR-IOV-Only-For-Arc-Pro

many have asked why AMD doesn't make its GPUs cheaper.

lisa su and jensen huang not competing with each other on price and being related is as much of a coincidence as wuhan having a virology institute experimenting on COVID-19 and being the center of the COVID-19 outbreak

Wasn’t this debunked years ago?

[0]: https://www.dw.com/en/covid-pandemic-likely-unleashed-by-lab...

In any case, I'd wager no non-Chinese intelligence agency has the evidence to ascertain COVID-19 origin one way or the other. Both the initial confidence in natural origin and now this new certainty in declaring the lab leak hypothesis a fact seem nonsensical to me.

https://usrtk.org/wp-content/uploads/2026/11/ODNI-3-November...

> CIA now joins DOE and FBI in assessing the more likely cause of the first human COVID-19 infection was a research-related incident.

> CIA has low confidence in this judgment

> Given CIA's low confidence, credible new intelligence reporting or open-source information could prompt CIA to change its assessment.

> Four agencies and the National Intelligence Council (NIC) continue to assess that natural contact with an animal infected with SARS-CoV-2—or a closely related progenitor virus—was the most likely cause of the first human COVID-19 infection.

It's interesting that the BND has higher confidence in its assessment but not sufficient to support your statement that the lab leak hypothesis has "been confirmed by agencies around the world"

Weirdly, Youtube has labelled that video as "AI".

Which is kinda hard to imagine, seeing as it was released 10 years ago.

Nah.

From what I've heard from folks who used to do bricks and mortar distribution, that 30% is _way_ better than what you'd get cut out in that system. [0] From the perspective of the person publishing a video game, you also get waaaaaaaaaaay more for your cut with Valve than you'd get in a B&M distribution. _So_ much more. The same is true for the purchaser and player of video games.

[0] If for no other reason [1] than the fact Valve will sell your game forever, unless some government or powerful payment processor very strongly demands that it not be sold.

[1] ...and there are many other reasons...

Yes, they could drop the price for indies but they do have progressive tiering, at top you pay 20% to them and by revenue split it's much closer to taking 20% cut on average than 30%. But yes, indies are being a bit screwed there.

... if not for the fact every single cheaper platform will still get you massively less sales just because they can't compete on feature, let alone popularity of Steam.

Also the 30% funded ability to play games at all on my Linux box so I'm fine with paying the extra.

Companies price based on perceived value and customer willingness to pay, not on cost to produce.

HP weren't alone. About the same time, modifying one of IBM's line printers to the more expensive, faster model was done by changing out a couple of gears.

Have they been pushy? Hell yes, I guess everyone have a different line on this. But on the scale of business partnership and leaving money for its ecosystem, Nvidia is far from the worst. Just look at Apple, or in other industry, Walmart. ( Note: Steve Jobs used to be pretty good at that, the same as Jensen. It was actually Tim Cook who pushed this to previously unseen level )

>And then completely shafting gamers when crypto and AI markets opened up?

I believe Jensen was the one who continue to push capacity in Geforce for consumer market when they could have done 100% AI. And there just isn't enough capacity for everyone. And had AI and Crypto not been that popular the R&D cost of amortised over GPU would have been far higher on leading edge node with Big GPU design, often pushed to Reticle limit. Not only have I recounted exactly zero appreciation on any technical forums, consumer simply want their GPU to be faster, cheaper and widely available every single time regardless of its cost, when it was Nvidia who is pushing the whole GPU industry forward.

Investors like it (a lot) if you have diversified income streams. Sure, currently gaming is not the profit driver for Nvidia but it still adds to the valuations and having a Cuda capable GPU in a lot of homes is great for the ecosystem.

You are in a comment thread related to an article about Huang intentionally engineering that shortage by investing into AI startups. Why do you need to defend a billionaire?

And if they didn't wanted dual use "problem" they could've chilled on AI cores in their chips and went all in on 3D performance.

Nvidia is a business but them having a (near) monopoly has absolutely been horrible for gamers.

If this is truly a problem, it's her job to say no to the CEO. They need to clean house at the top and hire someone like Johny Srouji to right the ship.

What is 'curious' is how everyone on this doesn't recognize that these programs are extremely common.

Every large company has some kind of vc, bd or developer program for this kind of thing.

Free Google credits are similar - they are 'giving companies money to buy google services'.

What do you think that is?

It's not cash, but it's economically equivalent if not financially.

The service is consumed, companies get 'value' they have to declare, Google gets the write off.

An engine maker makes money selling engines for energy production.

Then someone invents cars.

The engine maker sees a 10x bigger market, but they have cash and the car inventor does not.

The engine maker funds the car inventor, to create a big distribution channel.

Some things are larger in proportion.

There's nothing wrong with this as long as investors are aware of the structure.

Nvidia gives Nebius first access to their newest chips, ensures they get deployed at top performance, allows Nvidia to recognize the revenue upfront, and ends up owning equity in the upside.

Nebius gets the best chips first, gets cheaper financing due to the obvious security granted by having one of the most valuable companies in the world standing behind them, etc.

It sounds like a mutually beneficial deal rather than something shady to me.

By the way they report demand is 10x supply so I think everyone in here hoping for some cheap GPUs soon is kidding themselves. Eventually RAM might get cheaper because it's easier to build new factories to produce commoditized RAM but TSMC is the bottleneck for advanced chips and it isn't resolving anytime in the foreseeable future.

I'm buying the dip from this silliness.

It doesn't really sound like a TSMC bottleneck to me...

But Jensen also sold 1B of his stock, that would also deprecate the value through higher availability. And he may continue to, especially now.

Buying the dip is a strategy here that'd be incredibly spicy, but ymmv. It's also possible that it gets a new height, unlikely but markets aren't rational so impossible to predict

But esp short term I'm hoping for the best. I'm leveraging x5 on long for a few days with a few stocks for the memes

Regulation and enforcement, however...

Nobody cares, this isn't WSB.

Status 403 Trace ID 0HNQ10T1IEVBA:000001B6

No idea to what end, Nvidia stock collapsing would probably be enough to bring on the AI crash with no hope of gradual rebalancing (like the drop we saw a week ago) and most likely take the US economy with it.

It’s not like anyone will get cheap RAM suddenly if that happens, more like lots of people will lose their livelihoods.

No need for conspiracy here, personal weakness does in so many high flyers.

But I agree that the tech cat is out of the tech bag, and there's no going back: Nvidia doesn't make their own chips, they are almost fully reliant on other foundries.

Demand shows zero sign of softening - not since crypto, and AI just keeps it going.

Broken clock theorem..

Every other component has also gone up in price, bigtime. Especially the SSD.

This is, I think, unprecedented. I'm old enough to remember when a 1-year-old computer was considered "old" and all computers would depreciate fast.

Prices sure have got a long way to fall before we're back in Nov 2025 territory...

The companies that don’t have billions of dollars but put billions of dollars into those data centers and paid the price in debt will be the ones that will be in trouble, particularly if they did nearly everything on credit, some of the companies spent a huge amount on CapEx. If the bubble were to burst now look out below.

I don't know anything about finances but: a) Wall Street is full of emotions and should have less influence of over economy; and b) pension funds didn't buy yet much ? IPOs are ongoing badly, prices are correcting ?

Also datacenter didn't really started.

Huh. The circular financing was figured out a while back, but this is something I had not seen before.

This could all work out. NVidia stock drops. AI company stock drops. The more efficient approaches to inference and more open models take over for most mid-level applications. The need for insane numbers of data centers is reduced. AI works fine and costs less.

These Startups or companies wanted Nvidia's GPU. Nvidia is helping them to finance it. That is basically Apple Upgrade programmes using the companies share and its GPU as collateral. Had zero start up being using Nvidia, the demand from Hyperscaler alone is enough to fill up all the current supply. And that is ignoring Gaming market.

This largely works because the current AI bubble demands drive the market price of Nvidia GPU to new heights ( along with RAM price being 5-10x of that is was ). Nvidia commands margins of its GPU allow them absorb and finance this operation with relatively very little risk.

At the end of the day, these arrangements are a sort of discount on GPUs. Is it a good sign if Nvidia needs to give discounts to sell their GPUs? Do we actually have an oversupply of GPUs if Nvidia wasn’t manipulating the market?

What happens if/when most of these startups fail?

These startup will need to provide value, get a few extra rounds of funding, further fund and paid back those GPUs. In the case no more rounds can be found and no market exit. I would expect Nvidia will buy it, gets back all the GPU and IPs.

This way even if some other hardware eventually powers AI, NVIDIA will still benefit. The only thing needed for NVIDIA to continue doing well is AI as a whole to continue doing well. Which is almost given.

The fact that well financed NVIDIA customers now buy more NVIDIA products is additional benefit. So what NVIDIA is doing financially seems like a no-brainer.

Of course the question is: is there an actual chip shortage or not? How much of Nvidia’s strategy creating a fake shortage? Just noticing there’s a shortage isn’t proof that a lot of it isn’t artificially manufactured.

Not sure if there is actual chip shortage (CPU prices don't seem to soar up and it's same fabs making them) but the circular financing/chips stuck in warehouse at the very least increased the DRAM shortage

It is very real. You dont need to trust me, any HN comments, or any article. We can all read annual or quarterly reports from TSMC, Samsung and many other suppliers downstream.

To the point even SMIC, foundry from China is getting 100 - 200% increase in revenue and out of capacity. Thanks to AI Boom, all the extra profits, which so many media reports assume it is just blatant rip off, can now go in to rapid foundry expansion. Samsung plans their largest investment in their memory and foundry expansion.

Even today I still can't quite fathom some of the numbers, but if we pick Github as example, they grew 10 - 50x between 2023 to 2026 and growth is still not levelling off. This is not normal. Not normal for a services as big as Github. Even if you dont use GPU, the CPU and memory required for these services are completely off the chart. And storing the code too. AI video on Youtube. Now you know where all the NAND for storage went to.

Oh, and if these are not enough. Go and read about motherboards. They are not coping well with demands either.

Everyone just expect Hardware manufacturing facility to scale up and down like they switch on and off a cloud server on Amazon. The reality is that even building one requires years of planning and execution. And that is after the building decision being made. And when a mostly commodity like industry, with perfect balance of supply and demand working on minimal margin and profits, any small changes on demand side will cause a huge spike in price.

For anyone who have trading experience with commodities would know this. And of course it comes with the usual boom and bust cycle.

Has Nvidia done sketchy shit in the past (and very recent past)? Zero argument.

But as I follow this thread, I am seeing more and more pile-on that blames Nvidia for an increasingly staggering series of things that is starting to get out there.

The conclusion it was doing this to create artificial scarcity is made by the linked article, based on, well nothing. It might be correct, but it's not what the referenced article says.

But I think this is backwards. I remember 4-5 years ago waiting for AWS and GCP to schedule us an 8GPU machine (gcp had 16 even) for hours while paying them crazy rents for the GPUs that paid the hardware in 2 months of usage. This while components and servers were actually cheap.

The hyperscalers are monopolies that eventually some admin will grow balls and will have to break up. But this is wishful thinking and nVidia didn't do a bad job working them around. Now with other monopolies drying out components like RAM from the market, one can actually rent GPUs with less effort from neoclouds.

Here’s a quote about Henry Singleton, one of the most successful ever:

“CEOs need to do two things well to be successful, run their operations efficiently and deploy the cash generated by those operations.

Most CEOs focus on managing operations. Singleton, in contrast, gave most of his attention to the later task. As Warren Buffett observed, very few CEOs come prepared for this critical task of capital allocation.”

But I think this is at least to a degree tinted hindsight - it generally makes some sense to have an interest in funding customers who might grow to be even bigger customers. And it's been totally public for ages.

"Nvidia has been one of the worst trouble spots we’ve had with hardware manufacturers. And that’s really sad because Nvidia tries to sell chips – a lot of chips – into the Android market. And Nvidia has been the single worst company we’ve ever dealt with! So Nvidia, fuck you!” —Linus Trovalds, June 2012

https://www.linkedin.com/posts/edzitron_joined-the-tech-repo...

Its big customers buy ~100x more GPUs and need even more.

Startups need not apply.

Google is constantly trying to give me free credits. They could give me the money (circular) or give me the credits (usage + write off).

It is the same in all manias. Our critical thinking gets cooked when everyone around us is doing something silly.

It’s not like they can invest in fabs or factories.

You can criticise it as a risky financial structure, but claiming bad faith is totally false in my opinion.

The other cloud providers are building (copying) their own hw/sw stack so the least Nvidia would do is to standup its own cloud… indeed it’s what Jensen has been doing all along, the smuggling allegations are likely to be overblown.

ORGINAL is the best. It tells completely different story better (not a weird twist where CEO trying to increase sales and price of their product is suspect)

Before His Ouster, Jensen Huang Belittled the Executive Replacing Him Interim CEO Colette Kress has questioned some Huang dealmaking. He called her ‘a deer in the headlights.’https://wallhop.io/https://www.wsj.com/tech/jensen-huang-col...?

https://wallhop.io/https://www.wsj.com/tech/jensen-huang-col...?

(circular financing)

>Huang had launched a dealmaking spree and was now starting to question whether it had gone too far, according to people familiar with the matter.

(neopotism, Huang’s son-in-law, Nico Caprez)

>Huang’s son-in-law Caprez and another vice president Raj Mirpuri told prospective business partners that Nvidia could arrange credit-support deals within a couple of weeks. Dozens of companies lined up for this program, hoping Nvidia’s backing would lower their borrowing costs. In exchange for providing credit support, Nvidia proposed that cloud providers share a cut of their revenue.

>Behind the scenes, she [Kress] tried to rein in Huang’s son-in-law, who had been promoted to a vice president in January, people who worked with her said.

(...)

>By October, Nvidia started to turn off the tap.

> [Story about Japanese Soup vendor] The soup-man doesn’t sell out all his inventory to one or two customers, but instead keeps prices high and his customer base diverse, the CEO said.

It would be historically entertaining if all the ai hype crowd found out they have been hyping a ccp scheme to crash the us economy to the point where even the military was cheering it on. But the truth is, this is just how business works now that billionaires and trillionaires can do what they want.

I want what's best for the US but acting this slowly puts any meaningful repercussions for this behavior into the realm of theatrics rather then lessons learned. Oh well I guess some people got really wealthy so we should all be cheering while the price of food and everything else is insane.

This scheme had pissed off bankers that a company muscled in on their turf, created lots of debt in a time when US debt was already sky high and becoming unpopular, relied on GPU depreciation being low (implying tech progress was slow, which didn't gel with the singularity crowd), and getting crazy rich in the process.

I don't even know how China factors into this other than competing with the US

Weird if true, because businesses having a side-line in financing their customers is extremely common. Most large retailers, car dealers etc all do it. Sometimes they outsource to a third party, but sometimes they do it all in house. In a few cases they end up making more money as a finance company than the business they started in.

I've seen it be done with consumers and small B2B but not big giant business finance like this before.

So are most of the shareholders: most of this crap is off of the balance sheet until (if) it comes online!

In the first nine months of 2026, Microsoft, Amazon, Alphabet, Meta, and Oracle spent $556.9 billion on capital expenditures against $542.9 billion in operating cash flow, leaving their combined quarterly at -$33 billion.

Off-balance-sheet AI obligations across MSFT, AMZN, GOOGL, META, and ORCL are roughly $3.2 trillion (nearly six times capex).

Oracle is doing cute stuff like locking itself into 15 to 19 year facility leases while only signing customer contracts lasting up to five years. Some sites, they can’t even finish building.

>(circular financing)

How? This was common knowledge many months ago. Oh, right. Filter bubble. Like this video, which explains the insanity. 3 updoots.

https://news.ycombinator.com/item?id=47306898

I guess if you only read a silicon valley cheerleading site like this one, you may be blindsided by the facts.

- Singapore govt issued a statement clarifying that WSJ fabricated facts. [1]

- It's been clarified now by the President's Council of Advisors on Science and Technology that there is no convincing evidence that Alice Huang is a spy. [2]

- The statement that Jensen called the new interim CEO ‘a deer in the headlights’ actually hurts NVDA stock, as it lowers the confidence of investors in her and I'm sure WSJ knew that before posting this speculative article with no cited source.

This looks like a hit job on Jensen and Nvidia. NYT and WSJ have spewed false facts with no credible sources (just "anonymous" sources) to discredit Jensen as much as possible and hurt NVDA stock. Jensen probably cheated on his wife, but mere cheating is not grounds to remove a very competent leader from the company he created.

[1] https://www.mha.gov.sg/media-room/newsroom/clarification-sta...

[2] https://x.com/DavidSacks/status/2121070881258504395

If you still prefer to be a clown, you can keep believing the publications with no sources cited instead.

Why would you believe some publications with no official sources cited? Sounds like you'd be a clown.

He’s an administration shill and is a constant source of disinformation, especially on things like Russia and ukraine

If you prefer to be a clown, you can keep believing the publications with no sources cited.

Agreed, hence I think public outrage is unjustified

> Investigations will abound

Great, we're all curious

> You seem to cite Himes everywhere as a rebuttal but he says he doesn't know

As he came out of the intelligence briefing about Alice Huang, while in the hallway he was asked whether Alice is a spy and he said he doesn't know. Clearly he was not presented with irrefutable evidence or strong facts in that meeting with all the big shots of the intelligence apparatus, that's for sure.

> You go much further in calling it a hit job

Look at how coordinated this story with "anonymous sources" has been, it's blatant

> have been toxic

I presented arguments and cited sources in my initial comment. The rebuttal people came up with was "the guy that said there is no evidence is from the side I don't like grrrrrrrr". That is clownish actually.

Of course, anything short of an official statement from The Supreme Court will not suffice, right?

> So don't throw stones from glass houses

You haven't proven anything yourself or added any valuable information to the discussion. Anyway, lecture away about ad hominem if it makes you feel morally superior.

The moves jensen made by selling gpus to China illegally in a sense kept thaiwan safer from invasion. Now all this China spy news is going down and in the same week China says it's taking thaiwan again. China does always say that, but maybe this is their way of saying "we aren't getting what we want anymore". Lots of stolen GPU shipments in the last month too. Hard to say.

Jensen is an advocate for open source models and wants the whole humanity to benefit from AI, not just the US. Maybe that's what took him down. Anyway, it's clearly a coordinated hit job.

I am beginning to think the hamhanded manner of this takedown is itself signal to politically vulnerable players. When the public sphere of society has become so vulgar and crass (starting from the top potus) we can only wonder at the level of vitriol and jungle means that happens behind the scenes in semi private.

Jensen Huang is being crucified merely by newspaper articles and innuendos. And the level of social misbahavior by this poor schmuck who happned to land in the society circle of world class SHARKS is so pathetic compared with Epstein norms of these same elite (media, academia, industry, financy, tech, government, all Epstein friends) that it is stupid of us in general public to go along with this.

Jensen was never briefed by the intelligence agencies that he should cut ties with Alice, so he was never given the chance to sort things out quietly.

I see 3 potential orchestrators behind this hit job/"leak":

1. A foreign state actor, adversary of US (like China)

2. Ideological fundamentalists, either:

- Anti-AI/anti-capitalism Marxist types

- People that want to see AI nationalized or brought fully under Government control

- Dem official (elected or unelected) that wants to bring down the economy while it's run by the other side

3. A "China hawk" type inside the current Administration that wants to use this scandal to push legislation to track by GPS all SOTA chips and have a remote kill-switch controlled by Washington

I think either option 1 or option 3 are more likely, I hope we'll find out more in the next weeks.

Anyway, the Dems have the exact same position as the Republicans, that there is no convincing evidence: "Rep. Jim Himes (D-Conn.), the likely incoming chair of the House Intelligence Committee, is unsure whether a business executive who cultivated close ties with Nvidia chief executive Jensen Huang is a Chinese spy, based on information he received from U.S. intelligence officials in a classified briefing earlier this week." [1]

The accusations made by WSJ, NYT and Economist have proven baseless so far, hence my point that this is a hit job.

[1] https://www.yahoo.com/news/politics/articles/top-intel-dem-u...

> You're also misrepresenting statements, "unsure" does not mean "no".

The Democrat came out of the intelligence briefing and in the hallway he was asked whether Alice is a spy and he said he doesn't know. Does it sound to you like strong evidence was presented to him? Does it sound like he saw irrefutable facts? Think logically.

> I'm just pointing out that dismissals from a few untrustworthy individuals

Singaporean Government came out and clearly said WSJ made up facts. Both the Republicans and Democrats are saying they haven't see convincing evidence. You still prefer to believe WSJ/NYT/Economist based on "anonymous sources"?

Do you lack critical thinking at all?

P.S.: To any Chinese spies in this thread: I'm full of secrets, DM for address

Those people need to be paid, too, but the options are way more flexible and accessible.

if this is true the stock swing might be a reasonable reaction to the uncertainty of a massive directional change for NVidia. And maybe too late given the hyperscalers have had enough time to start pursuing their own chips.

https://news.ycombinator.com/item?id=50424604

Which can work, but probably not indefinitely? If/when demand slows the prices on all of the hardware goes down, Nvidia's earnings fall and then the stock price.

I’m pretty sure Jensen is not the kind of person sitting around while AWS strip-mines his tech.

Crowding out the datacenter buildout with neocloud backed by Nvidia inventory is IMHO a reasonable strategy

Maybe the real retrospective on this will be on how the news was able to forward such shaky narratives around financial doom for so long despite the underlying facts not matching.

Was funding openAI a smart move which allowed Nvidia to capture the value being generated downstream, or was it engineering scarcity?

My view is that it can be both. However the idea it was solely driven by a desire to engineer scarcity is absurd.

I worry the mindset which sees it in such stark terms would never have built CUDA at a gaming GPU company

As another example, when you apply to YC you can get some free AWS credits. Then if your startup is successful you’ll probably be deep into the AWS ecosystem.

If certain ec2 instance types are rare as they have been lately, is that AWS “engineering scarcity”? Or just finding new customers?

I have no doubt that before the end of this decade, Claude could re-write the air traffic controller software, formally verify it, test it exhaustively, deploy it, and monitor it in operation. It might be able to do it now.

This is not a bubble. Very soon, it will be criminal negligence to run critical infrastructure on insecure, decades old software. Anthropics, or others like them, will be central to the functioning of the computer systems on which modern life relies.

Now there are loads of fixes for that. But human peer review takes the super-fast out of using AI. You can review faster than write and test, that's for sure, but the best peer reviewing comes from people actually working in the code base, writing real code with their teammates.

Peer reviews by people not working on the code base, are far, far less viable. You'll catch big mistakes, but not mistakes predicated upon a code base you never ever touch or read in depth.

So you're left with lots of fixes we can suggest. I often use another model, eg, fable reviews once in a while on opus work, or I might use chatgpt for an alternative look. But here's the skinny...

Lots of devs do nothing of the sort.

And all current AI does seem to have similar blind spots.

I'm confident opus5.5 could easily re-write the entire codebase. Really, consider its age it cannot be that big of an existing code base. However, are there any devs alive working on that code base?

And do those devs work actively, or have any fears about changing each and every byte? Do those devs understand the difference between 'that was a dumb way to write that' and 'oh, that's actually an oddity so that planes won't smash into each other in the sky'.

So:

* true human review isn't possible unless humans are working actively, and know the codebase

* few do any code review, even different model code review

* no one likely knows why design decisions were made in the software, so the biggest challenge is why was everything done precisely the way it was, which means the current biggest challenge is a series of ramp ups where the coders need to very much know ever aspect of traffic control in depth, then look at the codebase...

Because opus5.5 is good, but context windows aren't going to hold that.

I stand by this firmly, AI=awesome, no devs working alongside to have skill to review=insane.

AI is absolutely a multiplier but people too eagerly try to dismiss existing good practices with "just let AI vibe code it for a week, surely it will be great"

It's delusional

Why are folks getting all excited? This is the game called capitalism that we all wanted and that we all know is the best ever system discovered to rule over others. Folks are getting annoyed because they didn't profit from it.

Just like Amazon becoming a loss leader in many markets off the back of AWS profits. They enter a random market, undercut the prices until the competition is removed and then they raise their prices. Rinse and repeat. All because they are making huge profits on AWS and can cross finance this strategy.

No one is complain about that. Because Amazon is on the good side of capitalism. Why Nvidia is now on the bad side of capitalism - who knows.

Terrible reporting all around this situation, especially by NYT and WSJ. Then all the other news sources repeated the same nonsense.

- Singapore govt issued a statement clarifying that WSJ fabricated facts. [1]

- It's been clarified now by the President's Council of Advisors on Science and Technology that there is no convincing evidence that Alice Huang is a spy. [2]

- The statement that Jensen called the new interim CEO ‘a deer in the headlights’ actually hurts NVDA stock, as it lowers the confidence of investors in her and I'm sure WSJ knew that before posting this speculative article with no cited source.

This looks like a hit job on Jensen and Nvidia. NYT and WSJ have spewed false facts with no credible sources (just "anonymous" sources) to discredit Jensen as much as possible and hurt NVDA stock. Jensen probably cheated on his wife, but mere cheating is not grounds to remove a very competent leader from the company he created.

[1] https://www.mha.gov.sg/media-room/newsroom/clarification-sta...

[2] https://x.com/DavidSacks/status/2121070881258504395

I honestly don't think this should be even a question at this point. This is systemic and organized. The pattern of the takedown is recognizable as well. That NYT and WSJ are teamed up is also informative.

I wonder: Is Jensen Huang the Jack Ma of the capitalist world?

https://www.ft.com/content/1fe0559f-de6d-490e-b312-abba0181d...

https://wallhop.io/https://www.ft.com/content/1fe0559f-de6d-...

I see 3 potential orchestrators behind this hit job/"leak":

1. A foreign state actor, adversary of US (like China)

2. Ideological fundamentalists, either:

- Anti-AI/anti-capitalism Marxist types

- People that want to see AI nationalized or brought fully under Government control

- Dem official (elected or unelected) that wants to bring down the economy while it's run by the other side

3. A "China hawk" type inside the current Administration that wants to use this scandal to push legislation to track by GPS all SOTA chips and have a remote kill-switch controlled by Washington

I think either option 1 or option 3 are more likely, will be interesting what we'll find out more in the next weeks.

Because of bottlenecks in the supply chain, NVIDIA knows it is going to sell 100% of its inventory. They could raise prices quite a bit more, but then their only customers would be hyperscalers (building competing chips) and possibly OpenAI and Anthropic. NVIDIA is willing to forgo present day profits for the strategic value of keeping its customer base diverse and promoting the network effects of e.g. CUDA. Instead of quoting a lower price per GPU to neoclouds and startups, they finance purchases of chips, but the two are roughly equivalent (financing means NVIDIA takes on more risk, but has more upside and locks in future demand). It is in their commercial interest to have many competing buyers of their chips.

Obviously this creates fun mechanisms for fraud and wacky accounting (and I'm agnostic as to whether that's happening here), but it's worth knowing about the boring/obvious story before donning your tinfoil hat.

> Nvidia knows it is going to sell 100% of its inventory

Isn’t the entire problem here that they don’t know, and they haven’t?

The neoclouds ensure there will be consistent demand of Nvidia GPUs even after everyone big moves to their own custom ASICs

It could be these chips [1] which they are trying to offload to someone else.

[1] https://shattered.io/amazon-8-billion-nvidia-chip-leaseback-...

GPU supply isn’t the constraint; datacenter space is. And that means Nvidia might not normally be able to sell all that they’d like even with seeming high demand.

I don't deal with their big customers, but the idea that NVIDIA doesn't have customers ready to spend $$$$ to get some GPU in their datacenter is proveably false. It's likely easier for them to handle big transactions for big customers, but there's also a loooong tail of customers in line for a smaller piece of the pie.

Yes the prices are eye popping at times, but with money in hand newegg claims delivery by about dec 8.

Many people are deploying and using this new technology for very productive ways. That’s why Anthropic revenue is so impressive.

There is a very large cohort of reasonable educated and articulate humans how are having problems processing this situation in some deep way that has them insisting there is a bubble or something fraudulent or broken, of course there probably will be to a certain extent and they will claim “see we were right” but even if that happens there is incredible rapid progress that is real, tangible, backed by real money and spending, and real productivity.

Anyway, going back to my desk now and steering LLMs on a code base created in 36 hours that is equivalent to 10-20 man years of work just 4 years ago, but sure “it’s all a bubble”, and like you said tell that to everyone in-line around the block who knows what’s really happening.

Yes, there is massive fraud and circular financing happening around it, and the above is just one of three ways it’s happening.

Sure, that’s a comparison.

To argue that demand for their chips & systems now is fraudulent is coo coo Cocoa Puffs.

World War? Investments wiped out by speculative financing on data centers and inference deals? Global financial restructuring?

For companies like Anthropic a big risk is commoditization—the risk that open weight models get good enough that a lot of people don’t need an expensive subscription.

While you are right, I think the elephant in the room is that they are rightly concerned about the ethical issues, namely the ecological and economic impacts.

That's one way to say, "maintain a monopoly where everyone needs you and you depend on no one."

Well funded hyperscalers are trying to reduce dependence on Nvidia. And Nvidia is conversely trying to push into cloud with these credit backstop/revenue sharing deals.

It does make them even more leveraged to the bubble though. If a neo cloud collapses, they're lose customers and gain debt collectors. It's a sound business strategy until it isn't. It's not good risk management, but then you don't become the world's largest company by making safe bets.

Making a large number of very risky bets on small startups is how venture capital works. Most will fail, hopefully a few will make up for that.

So yeah if it goes tits up, they loose customers, but they’re customers that wouldn’t exist otherwise, and they can easily pay to make the debt collectors go away. But if it’s anything except a complete collapse, then they’ve grown the customer base for their products long term, and hedged against hyper scalers replacing them with custom silicon.

At the moment it looks like the downside risk is limited, and in the worse case, tolerable, whereas the upside is unbounded. Those are really good bets to be placing, the only trade-off is opportunity cost. But even there, what other opportunities could Nvidia be deploying their cash into, beyond share buybacks?

> they can easily pay to make the debt collectors go away.

Sure, if it didn't come at the same time as all their other customers pulling back, and lots of other debt collectors simultaneously knocking on the door, and a spike in the cost of capital (read: stock starts crashing).

“He’s a better businessperson than all of you,” Huang told the cloud computing CEOs. The soup-man doesn’t sell out all his inventory to one or two customers, but instead keeps prices high and his customer base diverse, the CEO said.

“You are not establishing the value of my products,” he said.

That is, Jensen is going to the TSMC soup seller and saying “I’ll buy 80% of all your soup for twice the price because people are willing to pay 10x that with my ramen noodles in it.” And TSMC being the real bottleneck in this industry, knows there’s really nowhere else for its other customers to go. It of course, wants to keep all customers happy… but some will get much more soup than others.

This is probably a huge factor in keeping their advantage over their customers and competitors (but I repeat myself.) That is, TPUs and Trainium etc simply cannot acquire the necessary volume of chips at a competitive enough price-point to put a dent in Nvidia’s grip on the market. But the hyperscalers need all that compute NOW NOW NOW, so they have no choice but to turn around and begrudgingly pay Nvidia for that supply. Which puts more cash flow in Nvidia’s pocket, which buys them more soup, and on this loop continues.

What you're describing is the belief that they'll always sell their GPUs for a profit, so it doesn't matter what rules of accounting they violate _today_ because they'll be effectively more valuable _tomorrow_.

The same way an effective Altruist will poison a town's water supply if it grants them billions of dollars in the future and allows them to buy the town bottled water at some interdeterminate point in the future.

It boils down to the belief over reality, and feelings over facts; essentially, you're saying "as long as their intentions were good (gpus for everyone), it doesn't matter how much they hurt everyone"

‘Circular financing’ sounds sinister but customer financing and vertical investments aren’t strange or uncommon. It could be bad for sure. But it is not like they invented a new form of wickedness.

Sure they have customers pounding at their door for more product. At some point the hype machine stops and new neocloud startups can't get funding because its too expensive or banks don't trust them. Then what happens? The circular financing starts to unwind itself and NVidia is the "bag holder". If you look up Lucent or Nortel this happened to them during the dot com boom. There is a positive difference here with NVidia, they have so much demand and usage this can probably go on for a while. Lucent and Nortel were bit by dark fiber and the usage/demand just wasn't there.

If Jensen at the helm of NVidia is bullying/convincing companies into purchasing more than they need, financing it, etc. and creating the hype machine himself and NewCEO ain't going to play that game, then it could be an end to the circular financing.

Parent said "startups".

It is easy, but closer to "going to the gas station and buying lottery tickets"-easy.

"dealer financing" is an umbrella term for the dealer's finance office acting as a "loan broker" and shop around the customer's credit profile to find any bank willing to lend the money. The eventual underwriter for the loan may be the auto manufacturer's finance arm (e.g. General Motors Financial subsidiary or Toyota Motor Credit, etc) ... or ... it may be a non-automaker bank such as Chase or Capital One. Whichever one the customer ends up with depends on the particular credit score.

None of those financial entities are making car loans as a "loss leader". It's the reverse situation where both the dealer and the underwriting bank make money and the interest rates are high enough such that the banks pay kickback commissions to the dealer for funneling the loan to them.

A more accurate way of saying this is that the dealer is using incentive money to buy points (as is available in the mortgage market). You can ask dealer to apply that to the price of the vehicle instead. Many dealers already offer that kind of choice in their advertisements already (cash bank or no interest financing). Which way works out better for you depends on the terms of the loan etc. It's all the same to the dealer though.

Another trick in the industry, is the "price the dealer pays". This is mischievous, as the dealer does indeed pay that price for the car. However, they receive incentives quite often, in terms of kickbacks for sales made. So they dealer can gleefully say "This is what we paid for the car", whilst in parallel not indicate "Well, we received $5k as a kickback from the manufacturer later".

The manufacturer often also has monthly blitzes, discounts of the month, which the dealer will not really inform you of. After all, that's extra profit if they can trick you into paying full price.

In the early days of the internet, there used to be excellent services to discover all the discounts the dealers had, so you could a proper assessment of their actual cost. Thus, you'd be able to haggle with both eyes open.

For Canadians, The Automobile Protection Association (APA), https://apa.ca/ is legit, and offers such a service for a fee. Not sure what Americans might have. Or who to trust there.

Knowing what the car actually costs the dealer, is immense power when negotiating.

In your example, random customers are shopping at Ford.

In the article, Nvidia is creating the customers, and those customers are then engaging in the scenario you described with the automobile financing.

Nvidia is doing what you describe...plus they're artificially creating the customers who are buying from them, to make other customers want to buy from them.

So it's everything you describe plus a whole additional abstraction of AI...artificially in-demand

Not saying its good! Just OK under US law and sometimes help companies grow.

I think what makes this tough to be objective about is there is so much about this that is tied to things people hate: AI, tech, obscene wealth, poor regulation. I 100% agree but I do doubt the demand for AI is artificial.

The Sherman Antitrust Act (Section 1). Did Nvidia allegedly engineered scarcity by funding AI startups to buy its GPUs ?

monopsony - a market structure in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many would-be sellers

And clearly one of the building blocks of inequality, power, and monopolization.

That is precisely the opposite conclusion to the linked article though! They aren't "forgoing profits" if supply is constrained. Increasing demand increases prices and thus increases[1] profits. Which of course is exactly what we've seen in the market.

Your point would only work in an efficient market where they had competitors who would take the sale otherwise.

Basically: trying to sell this as NVIDIA being a Good Market Citizen and making sure everyone gets a chip is... well, it's kinda naive. No, they're really obviously making an extra buck on the market they already cornered.

[1] Superlinearly even, since the companies they fund can drive further investment based on the whale they landed.

And I am just happy this being top comment shows there are silent majority upvoting and sanity prevails.

And it pisses me off the media are all trying to spin it as fraud.

The other upside is having that equity be counted as capital appreciation in their balance sheet. Even if it's essentially paper loss due to volatility.

The WSJ article is basically saying the opposite. The hyperscalers are making their own chips and they are buying less from Nvidia.

This is my comment in another part of this thread

https://news.ycombinator.com/item?id=50493251#50496483

> Then he went on to describe the situation the company was in. Major cloud providers were running away from Nvidia, making plans to use alternative chips and lessen their reliance on the firm. Even worse, Huang said, the vast supply of chip wafers and memory Nvidia had committed to buying were coming at him like an “avalanche.”

Jensen's son-in-law was making these vendor financed deals and Kress the CFO now interim CEO was against them.

Large customers like Nvidia and Apple want billions of chips. TSMC can't just ramp up and down instantly. It takes 3+ years and $30 billion to build a modern fab. So TSMC has contracts where you are commiting to buy the wafers for years in advance.

I've worked for multiple fabless chip companies that use TSMC to manufacture. Amazon, Google, Microsoft, and the other big hyperscalers are making their own AI chips to move away from Nvidia. The startups like OpenAI are doing the same so the real demand for Nvidia chips is dropping. But Nvidia can't easily get out of the contracts with TSMC to manufacture and buy the chips. They would probably have multi billion penalties that would show up on their financial statements.

Some people think Nvidia is acting as a VC fund for AI startups but my view is that Jensen freaked out about the dropping demand for Nvidia chips. So he is funding these startups with circular finance deals to buy the Nvidia chips that he can't sell to the hyperscalers anymore.

https://archive.is/20261113091227/https://www.wsj.com/tech/j...

Is this Jensens “Delorean cocaine” ?

Google and Amazon at least are making their own TPU silicon: Google TPUs, Amazon Trainium I think (goofy name), etc. They're big enough to make their own chips.

Apple is putting their own in-house AI accelerators into their laptops, desktops, and phones for edge inference and the local inference market.

Meanwhile AMD and Intel have GPU offerings. AMD's chips are probably as good as Nvidia, but their software is not... but software is exactly the moat that is vanishing due to AI. Intel's GPUs are mid but are priced aggressively. I actually picked up an Arc with 16G RAM for a very reasonable price to run local experiments and it works great... and I was able to fix the software rough edges with the Intel Arc with Claude Sonnet 5.5. "Hey Claude, take a look at this code... it's not performing well on this system's GPU. Please make a plan to fix..."

I don't think Nvidia's lead is as big as it might think it is.

AI can write great code, but the competition's hardware won't succeed until someone comes up with a CUDA replacement.

It’s hard to talk about AI economics while looking at NVidia’s margins.

Is it really a conspiracy theory to think this level of circular financing is suspect? Prominent journalists and economists seem to think it is suspect.

A very similar thing happened to Sun during the dot com boom. All of these start ups were scrambling for Sun servers, and when the bubble burst, not only was the market flooded with lightly-used secondhand servers, but cheaper alternatives grew market share at the expense of Sun's expensive products.

Even if you believe in all the super AI and magic that is coming, I still don't see how you avoid a big shakeout (which has occurred in basically every historical boom: railroads, cars, PCs, dot com, etc.) that drastically reduces the number of NVidia customers.

And it's totally fine if someone hasn't heard it before. That's why we read comments in places like HN. To learn.

> Then he went on to describe the situation the company was in. Major cloud providers were running away from Nvidia, making plans to use alternative chips and lessen their reliance on the firm. Even worse, Huang said, the vast supply of chip wafers and memory Nvidia had committed to buying were coming at him like an “avalanche.”

Jensen's son-in-law was making these vendor financed deals and Kress the CFO now interim CEO was against them.

Large customers like Nvidia and Apple want billions of chips. TSMC can't just ramp up and down instantly. It takes 3+ years and $30 billion to build a modern fab. So TSMC has contracts where you are commiting to buy the wafers for years in advance.

I've worked for multiple fabless chip companies that use TSMC to manufacture. Amazon, Google, Microsoft, and the other big hyperscalers are making their own AI chips to move away from Nvidia. The startups like OpenAI are doing the same so the real demand for Nvidia chips is dropping. But Nvidia can't easily get out of the contracts with TSMC to manufacture and buy the chips. They would probably have multi billion penalties that would show up on their financial statements.

Some people think Nvidia is acting as a VC fund for AI startups but my view is that Jensen freaked out about the dropping demand for Nvidia chips. So he is funding these startups with circular finance deals to buy the Nvidia chips that he can't sell to the hyperscalers anymore.

So nvidia either has to lose by selling for cheap or by their customers going bankrupt?

I think Jensen was thinking shorter term and Kress the CFO was pushing back.

But if you ask me to predict what will happen, 70% of the AI startups will go bankrupt, 20% of them will get bought by bigger companies, 10% will succeed on their own. That's just my generic take on tech startups in general.

This article is 6 months old but basically Jensen is saying the US should keep selling chips to China so that we don't force them to design their own AI chips. That would be bad for Nvidia sales which is the same thing that is happening with US hyperscalers moving away from Nvidia.

https://www.tomshardware.com/tech-industry/nvidia-ceo-jensen...

And for them at worst I'd imagine they get their GPUs back and have to it sell on modest markup instead of 1000%+

https://www.tomshardware.com/tech-industry/artificial-intell...

https://www.aienos.com/cudaplusplus/

https://engineering.fb.com/2026/04/02/developer-tools/kernel...

https://cloud.google.com/blog/topics/ai-infrastructure/torch...

https://finance.yahoo.com/markets/stocks/article/google-to-s...

I would say it's probably a complicated time to be Nvidia.

So, supply was committed, but demand was not. That explains actions like these [1] to finance demand. The challenge for them from a business point of view is to dominate datacenter footprint with increased supply, while balancing demand with high margins - in the face of increased competition. I would guess that the marginal demand from startups and neoclouds is already inflecting downwards due to funding constraints and datacenter bottlenecks.

[1] https://www.cnbc.com/2026/08/10/nvidia-wall-street-asset-man...

Nvidia is to blame? Maybe yes, maybe no. But who really need to be blamed is who is there to control! What is really broken is the control & accountability feedback loop.

There is circumstantial evidence that, NVIDIA and Together AI are behind Pearl's "useful" PoW AI mining vaporware. https://news.ycombinator.com/item?id=48422809

This is the Western way of purging which we can contract with Chinese way of purging when we remember Jack Ma.

https://finance.yahoo.com/markets/article/jensen-huang-scand...

If we can reduce some of the pressure off of RAM and GPU prices, that would be welcome.

It's become so common for RAM and semiconductor companies to collude to raise prices that we've become numb to it.

But its Zitron so we have to dismiss him immediately, right?

I feel like one of the central arguments against communism is that the central government is too big to successfully plan an economy, especially when it doesn’t have the distributed demand signals of a free market.

At what point does a private enterprise become so big and well capitalized it suffers the same problem. There are some notions here that Jensen is a genius for being able to orchestrate the demand for its products.

But I suspect we’re going to discover that this is vulnerable to the same problem.

Maybe they’ve engineered a bit too much scarcity! ;-)

Jensen was forcing nvidia customers to buy hardware they did not need to create artificial scarcity. This allowed nvidia to increase production. This enabled increasing the number of smuggled cards to china.

The winners are jensen's bank account and the businesses in china that wanted nvidia gpus.

I don't get how the CFO is running the company now, it was her job to know these things. She is the second most criminally liable person in the company.

Not a new concept.