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Comments (126)

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  hadlock
  If the price of the RTX 6000 (96gb blackwell gpu) drops to $2000 (original MSRP $8000, currently $16,000 usd due to "scarcity") then, all of a sudden, "we have ai at home" becomes real and why would you ever pay for a subscription for your company/family when you can run Qwen Flash Next (which runs great on consumer GPU via software like Strata) forever for free?Engineering types and power users need not apply,but For Everyone Else, the "normies", Qwen Flash Next is probably "640k is enough for anyone" territory.IPO, valuation etc depend heavily on frontier, or "good enough" AI to need to run on commercial grade GPUs. If Qwen Flash Next is good enough and runs on a $2000 GPU, why would you pay $20/30/100/200 per month in perpetuity?I wouldn't pick Qwen Flash Next to add kernel namespacing and cgroups v2 to my custom OS kernel, but it will happily implement the Plan.md that Fable 5.2 wrote for a dollar.
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  lizknope
  We had a huge thread about this yesterdayNvidia allegedly engineered scarcity by funding AI startups to buy its GPUs (techpowerup.com)https://news.ycombinator.com/item?id=50493251
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  k0morebi
  Not speaking about the possible knowledge of smuggling in contravention of law, marital infidelity, and possibility getting mixed up with an intelligence agent, but I don't see the circular financing thing as a problem. Maybe I'm misinformed.But weren't they were investing money in companies to help them grow and in turn buy more of their product. Of course Nvidia wants to stimulate demand of their product. I don't think this was nefarious. There is no free lunch, the risk of them never getting that money back is real with a lot of these pie in the sky AI companies. How is this anticompetitive? It's all of these SPVs that meta, google, and others are using that I think needs to be investigated and punished by wall street.If you think that's wrong, USE YOUR WORDS, I'm open to reason. Down voting with no response or making jeers is not effective communication.
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  stephc_int13
  Jensen Huang made mistakes that gave opportunities to his enemies. But the bigger mistake was his incredible greed, he should have been a happy supplier of an extremely valuable product, and accept competition and that his quasi-monopoly was only transient. But he wanted the entire cake for himself.Greed and hubris. I think the turbulences will be painful to some, especially those who counted on Nvidia stock to finance their retirement.But, big picture, this is good news.
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  wqnt
  Most demand side data points (high GPU rent price, comments from all major cloud providers and model inference providers) show that available compute is in shortage. The AI compute demand is probably real and not manufactured.It looks like NVIDIA does these deals to screw its competitors: it takes out key supply so Google/Amazon/AMD can't get them, and it provide some financing to neoclouds so these data centers use NVIDIA chips instead of running AMD/TPU/trainium. These tactics are aggressive and anti-competitive, but the problem is different from creating phantom demand.
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  supercomputery
  I don't think there is legitimate story behind artificial scarcity claim. I'm in the industry and I know that the labs and AI are companies are buying up any compute available. No one is even blinking about the cost. You don't have to be an insider, look at that lengths both the frontier labs are going to and Sam's public comments.
• whatever1
  They did what car companies do.They finance the selling of their inventory.
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  reenorap
  People are acting like vendors extending financing to their customers is somehow irregular or illegal.It’s not. It happens ALL THE TIME. This isn’t “circular financing” which is a great meme term but is not factual.
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  intothemild
  Looks like this claim was coming from Ed Zitronhttps://respawnfirst.com/multiple-reports-say-nvidia-manufac...
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  im_down_w_otp
  This is such a weird take. The demand was there, so they capitalized on it by financing the purchases.This kind of thing happens EVERYWHERE. You ever notice how essentially every single carmaker has a credit arm? Practically nobody can just outright buy a car at the sticker price, so auto loans exist. Eventually, the carmakers realized they could make money on the backend if they got into the game of providing the loans to buy their own products. There are TONS of industries like this. Practically every single industry around capital intensive machinery and equipment operates like this. Farming, manufacturing, shipping, oil & gas, etc. etc. The biggest players who can afford to do it try to verticalize the debt/credit market for their own products because it makes complete sense for them to do so. Now that semiconductors have gone from personal computing to “industrial equipment”, this transition in the chain of financing would be a completely banal evolution.Also, consider the other massive glaring hole in the narrative… NVIDIA has hungry competitors who would absolutely love to eat away at their dominant marketshare. Google, AMD, Intel, Qualcomm, etc. could have come in with their own purported “avalanche of chips” at comparatively bargain basement prices to dismantle NVIDIA’s grip on the market. Notably, they did not, because there is no actual supply glut presently.NVIDIA financing the purchase of their own products is a demand-side subsidy. Demand-side subsidies increase prices when demand is inelastic. Hence, the demand was there and NVIDIA did the same thing that GM, GE, John Deere, Airbus, etc. etc. etc. all do… all. the. time.
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  smallerize
  I don't have a WSJ subscription, but was there actually anything weird about the deals? I mean it seems pretty normal.
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  maximilianroos
  one way to spot that this makes no sense is to look at GPU rental prices [1]if there were some cabal buying them to keep purchase prices high, then rental prices would be falling; it would be unprofitable to buy them in order to rent them out. but actually the opposite is true[1]: https://semianalysis.com/gpu-pricing-index/
• kinfish
  i can fairly support the circular financing deals as a way to provide GPU infra for the small upto large sized with some sort deals that make sense for them. which seems a way to compensate the other end
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  yieldcrv
  A lot of people are dismissive of this as if it was obviousThe circular financing meme was always about the other frontier labs and Mag 7, not about smaller private players that Nvidia was buying to purchase its GPUsThats a huge difference and the scale of this is not necessarily knownMeeting analyst targets to buoy the share prices is a margin of like 1-5% in revenueThis could really no longer justify the share prices, the forward guidance, the margins on gpus and a lot more. The true demand not being knownThe whole semiconductor supply chain is inflated because of this fictional off balance sheet demandPeople didn't want AMD chips, and still don’t, but they try to make it work based on scarcity and premium of Nvidia chips, people are resurrecting DDR3 because all more advanced memory is scarceIf none of that is true or necessary, grab your shorts and look out below!
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  233mhz
  The invisible hand of the free market ;)
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  butterisgood
  As if we didn’t suspect this. Same with RAM makers not upping production.It’s like the oil companies whining and fleecing us too.What’s the move though?
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  ion_trapper
  “Circular financing” is a financially illiterate meme. How many months has this concept been circulating Reddit, LinkedIn, HN? You think some Nvidia investors might not have been tipped off to this by now if it was an actual concern and not just “le economy is collapsing” fud that has been a dime a dozen for the last 5 years (minimum)?If you are buying into this let me tell you now: your cynicism and desire to feel like you’re somehow more informed than the entire market (because everyone else is just stupid/evil/both), this is doing nothing good for you.
• m3kw9
  all the pitch forks are coming out all at the same time, what a coincidence.
• blutoot
  I hope a few more heads will roll in Nvidia leadership/board and in the Trump administration as well. Someone said it right on https://x.com/ gnoble79/status/2121233927352250754, Jensen ran an arms-dealer for both camps (US and China).
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  0o777
  >circular financingIt was an open secret that 'LLM inferencing as-a-Service' was a license to print money until very recently, and still is if you like CoreWeave, Crusoe, Xai etc. can get LLM inferencing deals from OpenAI and Anthropic.Nvidia invested in genuinely investment attractive businesses. The "circular financing" accusation just seems like wishcasting from the anti-AI crowd.
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  randypewick
  I love to see when capitalism works great and free market is efficient.
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  lukeify
  Nvidia should be broken up.
• flaque
  This is just feels really misleading. Nvidia invested in startups that would turn around and help the market of companies that would buy from them grow.That's not "deliberately keeping GPU prices high" and it's really weird to frame it this way.It is good that Nvidia focused on supporting startups!
• flowerlad
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• cmiles8
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• anon
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