NVIDIA frenemy relation with OpenAI and Oracle

Original Article ↗ Hacker News Discussion ↗

Perceived AI Authorship and Writing Quality

  • Many commenters suspect the article is partially AI-written, citing:
    • Bolded listy subheads (“The Cash Flow Mystery”), stock rhetorical patterns, and inconsistent tone.
    • Typos, odd phrasings, and time-reference glitches that feel like LLM output or poorly edited AI assistance.
  • Some argue AI writing is “convincing-but-wrong” and avoid such content entirely; others see this as an “ad machinam” attack that dodges engagement with the actual arguments.
  • A minority defend the prose as “generally well written,” suggesting ESL or light LLM assistance plus human edits.

Circular Funding / Wash Trading Debate

  • One side: Circular funding is overstated.
    • If Nvidia invests billions and customers spend that on Nvidia chips, profits don’t magically appear; it just inflates revenue that sophisticated investors should discount.
    • This resembles vendor financing or bartering with real goods (chips) changing hands, not pure wash trading.
  • Other side: It distorts incentives and valuations.
    • Markets often price on revenue growth, not profit, so circular deals can pump valuations despite zero net economic value.
    • Analogies to crypto wash trading and Cisco-era dot-com vendor financing.
    • Some highlight accounting optics: investment as an asset, chip sales as revenue, making growth look “costless” even if economically risky.

AI Bubble, Burry’s Short, and Demand vs. Capacity

  • Several see Nvidia–OpenAI–Oracle as part of a broader AI bubble:
    • Infrastructure build-out may be far ahead of realistic revenue timelines.
    • Concerns about GPU oversupply relative to data center power, racks, and real downstream demand.
    • Comparisons to dot-com era overbuild, with fears of “winter” once hype cools and CFOs stop feeling compelled to fund AI.
  • Others downplay circular funding specifically, framing Burry’s bet as against AI profitability and timing rather than fraud.

Finance and Accounting Critiques

  • Multiple commenters say the article misunderstands:
    • Differences between net income vs. operating cash flow.
    • Normal ranges for days sales outstanding and inventory in a long-lead hardware business.
  • Some call the financial analysis “garbage” and overly confident for a non-finance author.

Groq, SRAM, and Oracle

  • Technical subthread challenges the article’s claim that SRAM-based architectures (e.g., Groq) avoid HBM constraints:
    • SRAM is far less dense and more silicon-expensive than DRAM; both logic and DRAM fabs are capacity-constrained.
    • Prior SRAM-heavy designs (e.g., Graphcore) struggled with capacity; DRAM remains more cost-effective for LLMs.
  • Skepticism that Oracle buying Groq would help much:
    • Oracle’s AI cloud value is tied to CUDA/Nvidia compatibility; non-CUDA chips shrink the addressable market.