alt Hacker NewsNvidia Allegedly Engineered Scarcity by Funding AI Startups to Buy Its GPUs
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I thought we knew a year ago that nVidia was doing circular finance?
https://www.theguardian.com/technology/2025/dec/28/nvidia-in...
Nvidia wants to ensure data center companies that are optimized for AI like Nebius stock their buildings with Nvidia chips instead of AMD or ASICs so of course it is smart business sense to partner with them or take stakes in them.
Nvidia gives Nebius first access to their newest chips, ensures they get deployed at top performance, allows Nvidia to recognize the revenue upfront, and ends up owning equity in the upside.
Nebius gets the best chips first, gets cheaper financing due to the obvious security granted by having one of the most valuable companies in the world standing behind them, etc.
It sounds like a mutually beneficial deal rather than something shady to me.
By the way they report demand is 10x supply so I think everyone in here hoping for some cheap GPUs soon is kidding themselves. Eventually RAM might get cheaper because it's easier to build new factories to produce commoditized RAM but TSMC is the bottleneck for advanced chips and it isn't resolving anytime in the foreseeable future.
I'm buying the dip from this silliness.
Jensen & Nvidia were never AGI / ASI pilled.
As a result they never seriously pursued frontier research for open models - which could have easily absorbed any excess compute they planned for.
On the other side their customers are rapidly becoming their competitors and will happily eat up spare capacity at TSMC if nvidia can’t fulfill its obligations.
Edit: to be fair there are several counterfactuals that could have played out negatively if nvidia decided to go into frontier research or go upstream like Elon and build their own fab. Jensen himself said they were completely focused on building general purpose compute and his bets had turned out to be right so far.
I have no investment in Nvidia and have no reason to like them or hate them.
But I think this is backwards. I remember 4-5 years ago waiting for AWS and GCP to schedule us an 8GPU machine (gcp had 16 even) for hours while paying them crazy rents for the GPUs that paid the hardware in 2 months of usage. This while components and servers were actually cheap.
The hyperscalers are monopolies that eventually some admin will grow balls and will have to break up. But this is wishful thinking and nVidia didn't do a bad job working them around. Now with other monopolies drying out components like RAM from the market, one can actually rent GPUs with less effort from neoclouds.
"The reason behind this was to maintain the perception of ongoing high demand and to move an oversupply of semiconductors from TSMC."
Huh. The circular financing was figured out a while back, but this is something I had not seen before.
This could all work out. NVidia stock drops. AI company stock drops. The more efficient approaches to inference and more open models take over for most mid-level applications. The need for insane numbers of data centers is reduced. AI works fine and costs less.
That is a very negative way to state facts. I doubt the neutrality of the authors.
Worse, I think companies that warehouse gpu's will buy newer more efficient gpu's by the time they get their data centers running but won't resell the older but unused gpu's afraid to let their competitors to make inference.
hopefully prices come tumbling down, I need a decent GPU stuck with crap at the moment.
What happens to neoclouds when the bubble pops. nvidia stops circular financing, and all of a sudden they can’t pay their debt. This leads to the DCs getting bought cheaply by hyperscalers and you have a monopolistic AI market with google/fb/amazon and likes are running the show again.
The whole AI “GPU scarcity” thing has been a pretty obvious house of cards for a while now.
The article from WSJ that this article is based on tells a completely different story. That it was Jensen himself who was considering pulling out from supporting smaller players because the shortage was forcing bigger ones to look for alternatives to Nvidia.
The conclusion it was doing this to create artificial scarcity is made by the linked article, based on, well nothing. It might be correct, but it's not what the referenced article says.
If true then I think it is time to put all responsible folks at NVIDIA in jail. This is collusion to the maximum, if it can be proven in court. I don't think they should be able to just pay a fine - there has to be mandatory jail time for people who build a cartel. Even in the USA a cartel should be forbidden - capitalism as the main religion in the USA, mandates that free market competition leads to lower prices. This clearly can not work if big corporations decide to milk the market. These things have increased insanely when the orange king and his cronies seized power.
403 - Access Denied Access denied
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Surely this is Nvidia deploying excess capital by acquiring equity in high growth companies at significant discounts (factor in that a major portion of the investment comes back to them against their high margin products). This isn't a new business concept and is generally accepted as smart business? Not some breaking news conspiracy?
BigAI has also been artificially boosting demand for and perception of acceptance by paying for lots of shills in socmedia. astroturfing. I can even think of 3 multi-$MM rewards made in the space to pro-AI boosters (OpenClaw guy, Bun guy, Omarchy/DHH). arguably a 4th if count Linus too, via the Linux Foundation sponsorship
This is delusional. The startups needed GPUs and nvda had the ones for AI. How is it even engineered they weren't forcing them to buy peanuts they didn't need but something they needed.
I wonder if I’m noticing the odd timing of everything too much, or whether there’s an effort to air as much of Nvidia’s dirty laundry as possible.
No idea to what end, Nvidia stock collapsing would probably be enough to bring on the AI crash with no hope of gradual rebalancing (like the drop we saw a week ago) and most likely take the US economy with it.
It’s not like anyone will get cheap RAM suddenly if that happens, more like lots of people will lose their livelihoods.
A WSJ article filtered through a gaming enthusiast website filtered through a general tech enthusiast website.
Here’s the original article: https://www.wsj.com/tech/jensen-huang-colette-kress-nvidia-c...?
I wonder how many shocking revelations we will receive from the current media circus. What is next, that NVidia was seeking profit?
I thought we knew this already? Seems like some nice info is being redrummed up.
I imagine the shortsellers and put option holders like that.
What scares me is that anybody could believe this garbage. It costs me $1 to make, I sell it for $5. Good deal! In fact, such a fabulous deal, I'm going to do this: Make 2 for $2, sell one for $5, then loan these other dudes the $3 I made in profit plus go $2 in the whole for a total of $5 so that they can give me the $5 back.
The more often you do it, and the greater the margin becomes due to squeeze, the dumber it is.
Guys, I have to say: I feel like I've found today's two-minute hate thread.
Has Nvidia done sketchy shit in the past (and very recent past)? Zero argument.
But as I follow this thread, I am seeing more and more pile-on that blames Nvidia for an increasingly staggering series of things that is starting to get out there.
So the CEO 'laid into' the CFO but sounds like she didn't push back all that hard. Seems like something leaked by Kress to make her seem clean, but just makes her seem dirty and weak.
If this is truly a problem, it's her job to say no to the CEO. They need to clean house at the top and hire someone like Johny Srouji to right the ship.
Man, imagine if Kodak put out photography courses, or Black Diamond sponsored a climbing team lol.
At this point, I am eagerly waiting for this AI song-and-dance to collapse so that I ( and my employer too) can purchase a decent specs system again.
Been saying for years that we’ll be seeing a wave of bargain-priced GPUs, memory and hard drives before long. Maybe they can turn these data centers into Amazon distribution centers or apartments.
NVidia enables people to buy their products. Oh the horror.
Wouldn’t this be exactly what you do if you wanted to boost the stock as much as possible in the short term?
Seems like a great way to cash out at the top
You don't say!
Regulators are asleep at the wheel in case you hadn't noticed
"Allegedly" hahahahahahahahahahahaaaaa aaaaahahahahahahahahahahaha
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Silicon Valley grifters, the whole industry is a Barnum Bailey freak show scam; Ed Zitron is 100% right.
Possibly Apple is the least sleezy, by defacto of being late to the SI scam party.
40 year old gamer here having a flashback of all anti- competition practices Nvidia sustained for decades. Who here remembers GameWorks and PhysX effectively sabotaging multi-vendor optimization in titles like Witcher 3 and Watch Dogs? Expensive Gsync monitors? Trying to force OEMs to be GeForce partners in exchange for full GPU support? Forcing EVGA exit from the market? And then completely shafting gamers when crypto and AI markets opened up?