Nvidia dramatically reduces amount of OpenAI infra financing it may guarantee

u1hcw9nx

I would like to see the numbers. If Nvidia sells hardware for $100B with 75% cross margin, and provides $50 billion in backstop for that same hardware, it would be still be nicely profitable deal ($25B) if the backstop capacity would be a total write-off recovering $0. Reselling that capacity in some large discount below already low backstop price would increase the profits. It's all those pension funds, sovereign wealth funds and Softbank getting into that $500 billion deal that will be hurt.

Noaidi

The Möbius strip of AI financing continues…

formvoltron

wobble wobble

behnamoh

In other words: the investments that were never going to happen are not going to happen.

gymbeaux

What would happen to Nvidia, Anthropic, OpenAI, if tomorrow someone released an open weights model on HuggingFace that matched performance and accuracy of Opus 5 running locally on an RTX 5070? That won’t happen tomorrow, but it will likely happen someday… what’s the plan beyond “don’t be the one holding the bags?”

nl

It's worth noting that this is deal that has never been signed previously. There's a release from DoE about it: https://www.energy.gov/articles/fact-sheet-department-energy... That's a horrible amount of gas energy generation. https://www.datacenterdynamics.com/en/news/openai-in-talks-t... has more details. The whole campus build could be as much as $500B. Would that be the most expensive single thing ever built? The ISS cost around $150B and is commonly said to be the most expensive single item, but that does include running costs.

senor_digimon

This is probably a lot more related to the fact they want to make GPUs an asset class. Nvidia is banking on the fact there will be an entire market that will guarantee whatever anyone needs.

cmiles8

Nvidia is turning into a savings and loan company that happens to design computer chips on the side. What could possibly go wrong.

Taikhoom10

This is meaningless in the long run; the broader problem is the constant circular financing and "Fake profits". It is not the first time, either; the capital cycle will prevail. https://s-1.vercel.app/posts/the-capital-cycle-theory/

chocolol

Ed Zitron might be right

robotresearcher

'May guarantee' is an oxymoron I've never come across before. Mangled headline. The article title is "Nvidia scales back funding guarantee for Ohio OpenAI data center, WSJ reports".

KurSix

The numbers have become so large that normal corporate risk management starts looking quaint