alt Hacker NewsWho bears the risk in Nvidia's $500B financing platform?
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We do
SURPRISE! Joe and Jane taxpayer. [2]
When the AI Bubble Bursts, Who Will Be Left Holding the Bag?[0]
> A new paper [1] making a stir in the financial press spells out the dangers to which private equity-owned life insurance companies are exposed by private credit funds with large portfolios of loans to software and AI companies. It’s a complicated story that could have enormous consequences.
> Pranjal Drall and Andrew Granato, the report’s authors, argue that some of these insurance companies could become insolvent if these loans crash. And an unanticipated consequence of a 60-year-old rule that protects insurance company policy holders from losing all of their life insurance benefits or annuity payments could leave taxpayers holding the bag.
Paper:Private Credit's State Backstop: How Private Equity Socializes Risk Through Insurers [1]
[0] https://cepr.net/publications/when-the-ai-bubble-bursts-who-...
[1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=7152239
[2] Wilhoit's Law.
“Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect.”
https://pylimitics.net/wilhoits-law/
Safety net for the wealthy only. TARP, anyone?
> Nvidia ships a new architecture roughly every year, and the competitive life of a given generation is plausibly two to three years, while hyperscalers depreciate the hardware over five to six
I keep seeing this take about how GPUs are going to lose value and yet somehow they don't? Why is it that A100s (released in 2020) are still in high demand and fetching high prices? E.g. RunPod is still charging $1.40-$1.60/hr for A100s and making money. Lambda Labs is charging $2.00-$2.80/hr for the same GPU.