Wut? Enron was literally shutting down energy grids in one location to spike prices in another. Way way way more to Enron story than financing to begin with.
Not everything is an Enron
Not everything is an Enron
In particular, the "circular financing" agreements look very structurally similar to things like the Merrill Lynch barges. They're not exactly the same, but Nvidia's statements in the source article make me more rather than less concerned; does it just so happen to be the case that their investment targets all want to spend lots of money on Nvidia products, or does an Nvidia investment come with implicit and unaccounted guarantees that the target will spend lots of money on Nvidia products?
Kind of reminds me of the current lack of supply of GPUs and ram to consumers.
You could make an argument that maybe this is similar to oracle (I think?) in the com bubble financing networking gear to customers.
I still think that misses the mark since the customers using hardware are have demand for computer by their customers.
The WSJ recently reported that there’s around 3 trillion in off balance sheet liabilities floating around in AI. It’s very unclear where the $3 trillion to pay those bills will come from.
Nobody is saying it’s “illegal” but it was news in the WSJ as the companies using creative accounting aren’t exactly going out of their way to make sure everyone knows that this $3 trillion in liabilities exists.
I think there questions for the commitments your talking about but they are not due today and I suspect when spread out over the life of the commitment are dwarfed by cash flow.