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Comment by Sam6late | Hacker News Reader

This is How Larry Elisson beat Musk for a short while although Oracle was struggling.' The deals among Oracle, Nvidia, and OpenAI have raised concerns about their circular and potentially risky nature. Oracle is reportedly spending tens of billions on Nvidia's advanced chips, Nvidia plans to invest up to $100 billion in OpenAI, and OpenAI uses Oracle's cloud infrastructure through Microsoft's Azure, creating a closed loop of financing and business. Some analysts warn this creates a reflexive loop or "dangerous bubble" where valuations may be inflated artificially by the circular flow of capital and resources, reminiscent of past booms that ended in sharp market corrections.

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If this means that the fall of OpenAI will cause Oracle and Nvidia to crash and downsize, bubbles aren't completely bad.

You can't discount the impact this will have on global stock markets and what that may do to both individuals and, more importantly, pension funds, as a large swath of people are retiring

Damage is unavoidable, we can only hope that it happens to someone deserving. Innocent individuals and pension funds still have time to retreat; if they don't it will be their fault.

We are moving towards gerontocracy - if pension funds will have large losses it’s very likely that young, working age people will be taxed extra heavily to keep the QOL of pensioners.

That would likely lead to a revolution: Millennials are 30-45 and they’re not in a good place; neither is Gen Z.

We’re already seeing revolutions elsewhere — and it’s likely that trying to loot them further by generations who sold out the nation will simply lead to social collapse.

Have you ever battled an 87-year-old wearing mechanized battle armour? They're crazed, hopped on speed, eyes goggling in their sockets

A pack of 3 oldies burst through our perimeter one winter night... the screaming woke me up. Outside my tent the forest was lit up red by our laser blasts, trying desparately to take them out.

We thought that a revolution would be a good idea, but an upside-down population pyramid is a hell of a thing when you're on the bottom.

Perhaps most of the impact could be burdened on NVIDIA investors, employees, leadership, or OpenAI investors, employees, leadership, etc., etc.

Yes but this is by design. Wealthy people want bubbles, when they pop, you can gobble up all the value at all time lows. Then you hold until you don't feel like it anymore as the market goes back to growing. You see this as how private equity has bought up real estate across the USA to turn into rentals after 2008, for example.

Aren’t extremely wealthy people that wealthy due to the valuation of their stock? IIRC generally the higher the networth, the higher share is kept in stocks

Wealthy people are extremely well diversified. Their main risk exposure is to variables that effect the entire market - e.g interest rates.

And they don't spend money, they take debt against their existing assets to fund projects and investments. So long as they can service the loans across economic downturns, they don't particularly have to feel the effects of a recession, outside of the mentioned opportunities to buy the market at a discount.

I suspect $$ is just a number for them. Being able to control more resources is the ultimate game. You gotta have zillions of $$ to join the tournament, though.

Person A has a net worth of 2B Person A has a loan at 500M backed by their holdings Stocks drop 50%, Net worth is now 1B Person A buys $500m of stocks Market Recovers 100% Person A now has 2B original holdings and 1B gains, $500m owned = 2.5B

Very simple example, and not the only way to do it - but people need to remember net worth being 500B is not 500B in the bank, and at some point the number doesnt matter

They can move their wealth from stocks to gold, for example. Look at the price of gold.

More importantly you keep the portfolio semi-balanced.

Just using Google / Gold as a comparison [1].

Assume you have 100 units of each.

In late 2021, Googs gone up ~100% so you have to rebalance because you have $200 in Goog and $92 in Gold. So lets say you rebalance to 80 Goog (160$) and 144 Gold ($130).

In late 2022, Googs gone down ~40% so you have to rebalance because you have $96 in Goog and $141 in Gold. So lets say you rebalance to 100 Goog ($120) and 118 Gold ($112).

So over the course of 2 years Goog has gone up 20% and Golds gown down 5% but your investments are overall up 16%. Obviously a 100% Goog investment is higher but with more risk.

If you didn't do any rebalancing then you have a gain of 7.5% (100*1.2 + 100*0.95 = 215)

[1]: https://www.google.com/finance/beta/quote/PHYS:TSE?compariso...

There was an article here recently about alpha school that mentioned this is how of of its backers made a lot in the aftermath of the dot com bubble - picking up companies with products that happened to implode in the bust. He's not the only one and that's not the only bubble that had that happen

> If this means that the fall of OpenAI will cause Oracle and Nvidia to crash and downsize

Only if those are the only actual real customers. It's not. The pie is a lot bigger. And with the current hype some other AI company will just take over and the bubble will continue.

Where does that leave AMD, considering OAI are taking a 10% stake?

A shareholder going bust is a no-op. However, the loss of large customer, is concerning, but less so, relative to the market souring on AI investments as a whole, which would be not great for AMD, but disastrous for Nvidia.

They'd just pitch for using the same GPUs to run the digital dollar ledger, and begin the cycle again, maybe.

Sure who cares if we wipe out 15% of everyone’s retirement right as long as it’s got some schadenfreude involved.

I doubt, or at least hope, that no sort of managed fund for retirement (read: low risk) is going 15% on AI stuff. Regardless of what one thinks might happen, it has to be accepted at this is an obviously very high risk bet, because this all is screaming bubble even more than the era of 'zomg i flipped this house i financed on an insta-approved loan, installed granite counter tops, and walked away with $20k profit in 4 days.'

But probably they will invest in the sp500, and tech companies make a big portion of the sp 500 and these tech companies also happen to be big in AI

Failing to diversify is the fund managers' problem. Pension funds shouldn't have all their investment in a single countries' stock market (doesn't matter that most, if not all, of those companies operate worldwide, they are still from the US), not even in equity markets. A wiser investment manager (or individual investor) would put a chunk in different kind of equities, and diversify into fixed rate, precious metals, perhaps real estate... Not bet it all to the volatile S&P 500. "Past performance does not guarantee future results.".

Who's "we"? Most of us have zero say when the backroom circular deals are made.

If it’s a bubble, then the long term value people are now counting on to retire with in the future is not actually real though, right? Like a bubble popping doesn’t destroy real value that used to exist, it exposes fictional value that never really existed.

It reallocates real value to the capitalist class. Most of us don't babysit stocks 8h a day and will be holding the bag.

What’s the mechanism you have in mind for that happening via bubble? They sell early before the crash? I’m curious if that actually happens, since the mass psychological nature of market crashes seems to make them difficult to predict reliably, even for people with a lot of resources.

Inflation on the other hand definitely does reallocate real value to whoever already owns a lot of assets, and I believe inflation often goes along with bubbles, since credit expansion is what usually kicks off the bubble in the first place.

Is it fair to say OpenAI is in a sense “washing” the money passing between Nvidia and Oracle? And instead of taking a cut in the traditional money laundering they are enjoying massive valuation gains?

When the fed investigates this does it matter if one of the 3 companies is not a publicly traded company?

I guess you could see it like that but I don’t think it’s “wash trading” in the sense that they’re coordinating it. I don’t really know what the fed would investigate here.

What you're missing is that real value can be created in these exchanges - Nvidia really makes chips for example.

The issue is that it's an industry of investment which exists solely to power more investment in AI - the entire chain is still assuming that someone will eventually pay for this.

At the end of the day all that money leaks out to employees and suppliers...but no one those people transact with may have any interest in buying what was produced.

That's only really value if the chips are useful and if there are people buying the chips for something they want to do with them.

It's entirely based on the perception that LLM training & inference is here to stay at ever growing scales when the shortcomings of Artificial Dreaming are increasingly scrutinized. Not all businesses want to end up paying refunds to their clients like Deloitte [1] because the LLM hallucinated crap into their reports (and they failed to correct it).

[1] https://www.theguardian.com/australia-news/2025/oct/06/deloi...

Deloitte just bought like 400k Claude enterprise licenses. Bad example.

You could argue about the causality here.

> It's entirely based on the perception that LLM training & inference is here to stay at ever growing scales when the shortcomings of Artificial Dreaming are increasingly scrutinized. Not all businesses want to end up paying refunds to their clients like Deloitte [1] because the LLM hallucinated crap into their reports (and they failed to correct it).

This assumes Deloitte didn't make more $$$ from the deal by "outsourcing" it to AI than not. It was a partial refund.

You haven’t brought in the side costs into your analysis

> You haven’t brought in the side costs into your analysis

And you haven't considered that Deloitte might get this money some other way anyway. It's been budgeted and needs to be spent by the government department for this financial year. They'll find another project to hand out.

lol you and I are not talking about the same stuff mate

Leaks out? Don’t you mean “trickles down”?

Oracle most certainly is not struggling. Even putting aside the NVidia deal, their cloud business is thriving.

They give you 4 nodes with 1 vcpu and 6GB RAM each for free forever by the way. Most other stuff has a free tier too.

I used it to learn terraform and have a kubernetes cluster running.

I know it's always trendy to bash oracle and simp for AWS, but it is THE best option for learning and hobbyists.

On a sofware salary, would rather pay the 20 something to a provider like hetzner instead of giving my personal info to oracle

That's very cool. I was going to get a hetzner for some hobby projects.

Can you get that without adding a payment mechanism? For some reason, I'd be more cautious about putting my card into Oracle's offering than anyone else.

> Can you get that without adding a payment mechanism?

No!

There are actually two free tiers.

The limited free tier you get without adding a CC and then this advanced "always free" tier I am using, where you have to use and verify a CC and have to pay big bucks if you mess up.

limited free tier: 300$ to be spent in 30 days

advanced always free tier: https://docs.oracle.com/en-us/iaas/Content/FreeTier/freetier...

So it's free... Until is not. My take on this would be that if Oracle makes any change to that "free" tier and you do not take proper action you might be automatically charged hefty amounts from your credit card. No, thanks. It's way way safer to spend few bucks a month in other VPS options than get a big surprise on your credit card.

Privacy.com has always been a working general solution to this, for me. Disposable CC aliases with spending caps.

Privacy.com won't provide lawyers to you when Oracle sends letters of demand to you for unpaid invoices.

I know Oracle are notorious for scummy license enforcement, but in practice their Always Free tier is superior to Amazon's precisely because they will cut off your service rather than bill you arbitrary (huge) amounts.

The big limitation is the 10mbit egress bandwidth, but you can work around that with (free) Cloudflare.

Messing up with Oracle is a bit different from messing up with Google. I'll go with Hetzner which I love anyway. :)

You can also get all of that in a single node, which makes for a fairly beefy build server :)

Uh, you can get that level of compute locally easy peasy.

Learning terraform isn't hard, it's what you stitch together with terraform that is hard.

I think the point here is that free beats easy peasy, especially when learning a new skill, where your easy peasy isn't their easy peasy. And getting something up and running on Oracle Cloud with Terraform is nowhere near easy peasy for someone who never did anything with Terraform ;)

'Back in my day' we learned with VMs for free! The computer you have works without internet, for instance

> while although Oracle was struggling

In terms of actual earnings not sure Tesla is doing better.

It's worth noting Elisson is 2 years older than Trump.

What's he going to do with all that money, and what does he care for the risk it's bad or shady?

Worst case, he got to be #1 for a bit for a few dozen billion, best case he's hoping AGI will extend his life before he croaks.

I miss the era when people like Dale Carnegie would sponsor some public buildings, instead of ruining the internet and the natural environment.

You may be thinking of Andrew Carnegie. Who was a steel industry tycoon, probably the #2 most polluting industry today. Back then - probably #1.

The Sacklers donated a lot of money to cultural institutions while they poisoned society with opiates.

Doubt he believes that. Getting AGI (whatever that actually means) means we are still far away from reversing ageing.

Even smart people belive a lot of untrue things, and his domain of knowledge isn't likely to include much more biology than my GCSE grade C and a handfull of brilliant.org micro-lessons; it's quite possible, though I would not put specific odds on it, that he's seen e.g. the sudden change in the rate of progress in protein folding, where before it was ~ one PhD thesis per protein and then suddenly AlphaFold did all of them, and extrapolated from that to everything else like an over-enthusiastic PopSci reporter.

We're actually in a great place to reverse aging already with off the shelf stuff you can get from the grey market. We have countless interventions that show improvements in aging-related metrics in humans that show verified longevity benefits in animal models. That's about as good as you can hope for without waiting a lifetime to actually confirm the human actuarial benefit, which is inherently a losing strategy.

(Interestingly, some of the world's dictators do seem to have an interest in the current state of the art in prolonging life. For example Xi and Putin chatted about organ replacement https://www.bbc.com/news/articles/cr70rvrd41ko)

Yea, but if you goal is extending life then investing in science is probably a better bet than GPU:s

Ah yes, my favourite philosophical dilemma, The Organs of Theseus, and whether or not a sufficiently organ-replaced person is absolved of their previous actions by virtue of not necessarily being the same person.

As a more serious point related to this though, I was under the impression that organ replacement didn't address issues with telomere length?

> What's he going to do with all that money, and what does he care for the risk it's bad or shady?

The thing that unites Ellison, Trump, Musk, Thiel and a fair few of the other politically active billionaires is the obsession with "legacy" - they want to leave their mark in the history books, figures which will likely be remembered and taught in schools in thousands of years similar to Roman emperors.

Musk is the most obvious with his obsession of settling (and eventually dying) on Mars, Trump is dreaming of getting a Nobel Peace Prize (if only to not let Obama be the only US President who got one), and the rest is hunting for the "invented AGI" crown.

Obama was the fourth U.S. president to be awarded the Nobel Peace Prize, after Theodore Roosevelt (1906) and Woodrow Wilson (1919)—both of whom received the award during their terms—and Jimmy Carter (2002), who received the award 21 years after leaving office. - wikipedia

Thanks for the correction!

Thiel wants his legacy to be bringing about the Antichrist…

Give it all to the IDF.

What does Ellisons personal wealth have to do with this? The concern is that the circular pattern of shifting money between these companies is artificially inflating the stock market to heights that will crash very very badly when this bubble finally pops.

The market is due a correction irrespective of bubble mania.

The implied equity risky premium is getting pretty low - a sign of greed.

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