Nvidia prepares to support struggling data centres as AI deals collapse
Nvidia is preparing to finance a troubled data centre company, suggesting the US tech giant could help prop up the industry as a brutal sell-off hits.
This is paywalled. The paywall can be bypassed (in FF) by switching to "Reader View" before the page fulling loads all assets -- which provides plenty of time as it's a bunch of bloated JS. I think this qualifies as "about tech" as it's a data point in the analysis of a potential pending collapse of the AI bubble. What interested me was that the article is about NVidia's reaction to a "brutal sell-off", and so far the "brutal sell-off" itself hasn't come across my radar -- I'm as interested in that as NVidia's propping-up of data centers.
TA is 451 words long.
Whether people bypass the paywall is their own moral dilemma, but I'm not so sure about the ethics of copying the entire article.
Edit Re-arranged order of text to make important info visible in feeds.
6 replies
Man, who could have foreseen this?
100B cash on hand, vs trillions invested, how much did anthropic lose this year alone? I'm no expert but the math doesn't math here yet for me. Maybe someone can explain?
Fractional investment. nVidia invests $1bn for 10% of your company, you use that valuation to get another $3bn in loans and then use the money to put on a party and show your product off to lure in someone who is willing to invest $2bn for 5% of you company.
You haven't got a working product, but your company has raised $6bn in capital/debt and you have a valuation over $40bn. You spend the $6bn on hardware from nVidia and others, propping up their share price. They invest it back in your business too. Boosting your valuation some more.
No real money has traded hands, and you've just been given hardware in exchange for a portion of your business.
If your business fails, nVidia and your other investors are left holding the bag...
Debt carries interest, and costs.
And that comes due.
Normally after the founders exit
nvidia has already seen where this is going and why the bought hugging face and created consumer spark chips. its all local and open source. looks like they want it to happen a bit slower.
for those of you who might not know, hugging face makes money by renting compute. so you have a local free model and when you need more compute to run on their machines you pay. its a very straight forward budiness model. pay for what you use.