By Matt Underwood Nvidia’s plan to invest up to $100 billion in OpenAI has stalled, according to reports from the Wall Street Journal. It seems like a massive deal, a staggering amount of money, but digging a little deeper reveals that this isn’t just about a straightforward investment. It was more like a plan to *give* OpenAI $100 billion, with the expectation that OpenAI would immediately turn around and order GPUs from Nvidia. This intricate arrangement was essentially designed to boost Nvidia’s sales projections, keeping those valuations sky-high, even while the CEO was selling off billions of dollars of stock and apparently funneling funds through a “charity.”
The news also comes after Microsoft stock saw a slide when investors realized how much they were pouring into AI. The timing is interesting, as it follows OpenAI’s exploration of alternative computing providers, essentially, Nvidia was scrambling to protect its position. Some might call this the first signs of cracks forming in the bubble. And while AI has its uses, it is a long way from the hype. The generative AI currently on offer feels like a Fisher-Price toy, giving the illusion of progress without delivering tangible results for the end user.
The sheer scale of this proposed investment, $100 billion, is mind-boggling, particularly given that the technology hasn’t truly lived up to its promises. It feels like the AI circle of investment must eventually halt. One has to wonder if companies have positioned themselves in a way where continued growth, and the profits that investors now demand, will be unsustainable without this type of “bag passing.” Some AI developments are “cool”, but no one I know subscribes to it, and they just use the free stuff.
It’s natural to question how this all pays off. It’s a game of musical chairs, with everyone hoping the music doesn’t stop, and right now, nobody knows where it will end. It makes you wonder how long the tech companies can run from the money pit, when real intelligence is the key. Many people have moved away from ChatGPT because of improved services elsewhere. There’s a growing sense that this AI house of cards might be ready to crumble. Spending such an enormous amount on a product that doesn’t seem to benefit humanity is raising eyebrows.
Perhaps those involved are hitting the pause button because the expected progress simply hasn’t materialized. It’s hard to remember using AI recently. The potential for the AI bubble to burst may be tied into economic issues, such as the devaluation of the US dollar. Some sources feel this stalling is due to the bubble ready to burst. Some feel there will be a big drop in AI training demand, though it’s important to keep in mind, even if demand slowed or stopped, it wouldn’t be a good thing.
The whole thing seems like a repeat of the internet boom, but not quite. While the internet is tangible, it is also very real. Some say the Nvidia CEO is panicking, begging people to find uses for AI. One of the main points is, despite Microsoft and Meta posting their biggest earnings, the amount of cash involved is still massive.
It boils down to this: we’re paying inflated prices for RAM, GPUs, and data centers. All this for a demand that isn’t really there, allowing companies to project profits that may never come to fruition. It does make you wonder if those with insider information are watching the bubble get ready to burst. Journalism is a funny business, isn’t it? Is selling stock and using a DAF considered bad?