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The counter point to this is that while not profitable, the cashflow is real, and inference is marginally ROI positive. If you can scale inference with more GPUs then eventually that marginal ROI grows large enough to cover the R&D and other expenses and you become profitable.

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"Marginally ROI positive" works in a ZIRP environment. These are huge capital investments; they need to at least clear treasury return hurdles and importantly provide attractive returns.

I am fundamentally skeptical of "scaling inference". Margins are not defensible in the market segment OpenAI is in.

For some of these tech companies their valuations let them go to the market with their equity in way that is basically a ZIRP environment. In a way you could say this is a competitive advantage someone like Nvidia has at the moment and so they are trying to push that.

I'm also pretty skeptical, and could imagine this whole thing blowing up, but it's not like this a big grift that's going to end up like the GFC either.

I think it's possible we are in datacenter GPU overcapacity already, and NVIDIA is burning its stock to avoid the music stopping.

It's already happening in China that datacenters are at GPU overcapacity. I wouldn't be surprised if it occurs here.

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