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Comment by rwmj | Hacker News Reader

Sure, but if the companies start competing on price they become commodities and their valuations collapse, leading to knock-on effects everywhere (eg all the circular financing also collapses). I'm not saying this is a bad thing.

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I agree that by what we are seeing so far, there is no magic secret sauce on the horizon. The tech is not super hard to understand and develop, such that hiring a few capable ex-employees of the big labs can help you build a new one. Any big step in capabilities has been quickly matched by the other labs so far, including agentic AI but also image and video generation.

Also, "circular financing" is a meme. A private company cannot create money, there is no circularity. NVIDIA may buy services from OpenAI and also sell them GPUs. If a lumberjack buys eggs from his neighbor and also sells him wood to improve his chicken coop, that's not circular financing, just business happening in both directions.

So why is mistral so far behind?

It's more like the lumberjack is lending money to the farmer so the farmer can buy his wood. (NVIDIA doesn't consume tokens). If the tokens (eggs) suddenly become much unprofitable then the AI labs aren't going to need as many GPUs (lumber for hen houses) and the borrowed money won't be paid back. Or perhaps more accurately, has even less chance of being paid back than it does now, which is not a high chance.

The numbers are staggering eg: https://www.cnbc.com/2026/08/17/nvidia-financing-open-ai-dat...

> Also, "circular financing" is a meme. A private company cannot create money, there is no circularity.

Tell me you know nothing about economics without telling me you know nothing about it.

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