So debt financing (Oracle) vs fund-it-more-on-your-own (other big tech?) vs fund-it-with-equity (startups?)... I guess that makes some kind of sense? Oracle raises 4x the debt of e.g. Google?
The problem is why is Oracle raising this debt? It's to do the buildout for OpenAI. So Oracle buys GPUs from Nvidia. Nvidia invests in OpenAI. OpenAI then pays Oracle for the GPUs.
i.e. we're going around in circles.
Oracle takes a lot more risk, but in case OpenAI fails to grow quickly, it can still probably find buyers for its capacity in the next 5 years. There are many rich firms that will continue to invest in AI whether or not AI makes money.
Nvidia has invested billions in previous rounds of OpenAI raises also. Pretty sure it is not nothing.
Also OpenAI rents from CoreWeave that Nvidia has invested in.
Ok I stand corrected, but the main point is that the "circular" risk more refers to the recent 100B "investment", and that is quite misleading.
No it's not. It refers to a web of companies sending money back and forth. Nvidia investing in OpenAI, OpenAI investing Coreweave and that goes back to Nvidia except recently 10x the scale. Amazon, Broadcom, Intel and many more are now all in on it.