Open AI has recently announced deals worth $600 Billion with Nvidia, AMD, and Oracle. OpenAI is able to spend hundreds of billions of dollars they do not have because those companies are paying that same money back to OpenAI via investment. The infinite money glitch means that stocks keep going higher as more circular revenue cycles between the same players.
↫ Sasha Yanshin
The scam is so brazen, so public, so obvious. The foxes aren’t just in the hen house – they bought the whole goddamn hen house.
I don’t think we can generalize to “big tech” doing financial shenanigans, but it is clearly OpenAI and several other firms engaging in a revenue pumping mechanism to prop up the TikTok purchase.
Basically they wanted to have TikTok bought by a certain billionaire. In order for him to have money, they increased the value of his company. The way they did that was having OpenAI order a bunch of cloud services. And that required someone with actual resources, which was nvidia to be part of the chain.
There is no actual money, until nvidia investors indirectly came in with some clever “financial engineering”.
Basically they had nvidia, who has actual tangible business, finance the purchase of TikTok by a private individual on a very shaky series of transactions.
I’m not sure this is legal, but I am not a lawyer, so cannot make a judgement here.
I think in the future AI will be looked at like the gold rushes of the past. The people who made the real money were the ones selling the pans.
But ….
look at the new clothes!
When this bubble bursts, it will be so nice to watch the show. I will enjoy it.
I just hope they won’t find a way to rope us in so we’ll have to bail them out, much like when the CDO/subprime mortgage bubble burst and we learned it was our bank deposits all along and the banks had to be bailed out to keep the ATMs functional. So, don’t be so sure you’ll enjoy it. But if it’s all private capital like the dot-com bubble was, yes, it will be fun to watch.
It’s wrong to just associate this behaviour with AI startups, it’s more generalised than that, and not just the technology sectors. The true shock begins to surface when you start to consider the salaries drawn by the executive branch relative to the real worth of the company. Most of the “book value” is rubber, the tangible value is possibly only 1/10th or even 1/100th!
That sounds like “check-kiting,” just with a few extra steps. Also reinforces the impression I’ve had for a while now that the current bubble is being deliberately driven by people who learned a lot from past tech bubbles… Unfortunately the lesson they learned was “lets apply the strategies of FOMO pump-and-dump to a tech bubble: draw in as many rubes as possible, then cash-out before the inevitable crash and leave the suckers holding the bag.”