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The Big Short Guy Just Bet $1 Billion That the AI Bubble Pops (futurism.com)
submitted 10 months ago by to c/technology@lemmy.world
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[–] 39 points 10 months ago (9 children)

It wont be Nvidia unless they play things incredibly badly, they're the only ones making actual profit by selling shovels in the goldrush.

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  • [–] 10 points 10 months ago (6 children)

    Yeah, but dont they also have the largest promisory debt? Havent they loaned the most most money that they dont actually have?

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  • [–] 17 points 10 months ago* (3 children)

    From a quick look they have ~40B USD in liabilities and make ~115B USD gross profit. Being able to pay off the entirety of their debt with 4 months of profit seems pretty healthy to me.

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  • [–] 6 points 10 months ago (2 children)

    Cool, in a not super cool way. Nvidia is kinda scummy but the work they do is valuable. I appreciate you dropping the facts on me, but im not sure how to feel about them.

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  • [–] 7 points 10 months ago (1 child)

    I'm not a fan of them either, I wish AMD would step up and compete with them better (Just get ROCm into a good place FFS!), but they are definitely not one of the companies most exposed to an AI pop. They'll stop being insanely profitable but they are not anywhere near the position of openAI and the likes who have massive negative profit.

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  • [–] 3 points 10 months ago

    I guess the question is how much of their revenue is in cash, and how much is in credit from companies that may go bust and not finish paying Nvidia for what they already built and loaned.

    Maybe I’m wrong about how that’s all working.

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  • [–] 5 points 10 months ago (1 child)

    They "loaned" money to companies that immediately turned around and used that money to buy their products... So they got the money back and are only maximum out the production costs of those units if the loaner can't pay.

    But if there is a bankruptcy, they'd be at the front of the line to collect

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  • [–] 5 points 10 months ago (1 child)

    Yeah, but can they handle the collapse of going back to the company before the AI boom? They've increased in market cap 5000%, attracted a lot of stakeholders that never would have bothered with nVidia if not for the LLM boom. If LLM pops, then will nVidia survive with their new set of stakeholders that didn't sign up for a 'mere graphics company'?

    They've reshaped their entire product strategy to be LLM focused. Who knows what the demand is for their current products without the LLM bump. Discrete GPUs were becoming increasingly niche since 'good enough' integrated GPUs kind of were denting their market.

    They could survive a pop, but they may not have the right backers to do so anymore...

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  • [–] 4 points 10 months ago

    Definitely a possibility! But dealing with "only being a normal profitable company" is a very different problem to "oops, we were selling $10 for $5 and VCs have stopped giving us money to burn, and people are using self hosted models too", which is the possible outcome for the big AI labs.

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