More Tales From Nvidia: The Giant Circular Reference of Nonsense (Issue #244!)
This is interesting.
So much for the AI productivity miracle, which has turned out to be nothing but inflationary and societally disruptive in a bad way.
Oddly, more and more capital keeps going in and the incremental return seems to be getting worse and not better.
Scaling failed a long time ago.
Investment into Gen AI should have been curtailed at this point, and the dollars directed toward alternative approaches. Instead, because the short-term rewards in terms of stock price were so great, and the U.S. government got behind it (just like they did alternative energy and flushed scads of dollars down the toilet there too), the reflexive investment boom into a broken technology accelerated.
Further to this point, regarding OpenAI’s latest pay when it works model. How many times can the business model change and pivot? Is Sam Altman going to start doing Only Fans next when this doesn’t work?
I think the big issue is they have to move to this model because of how poorly the tech/product works. In third-grade terms, after the trillions of investment, the tech still sucks.
“Independent testing found OpenAI’s Operator agent fails 62% of real desktop tasks.”
This opens a giant can of worms too regarding defining success. This is a disaster for cash flow… that they don’t have to begin with.
One can only laugh at the notion of AI funding UBI. How do you fund UBI with losses? I worry the only thing they will fund is Universal Basic Debt, and the whole mess gets dumped on the taxpayers again with some form of backdoor bailout or just a stock market bubble pop that screws everyone, while these guys all sold billion of stock along the way.
The Giant Circular Reference of Nonsense
Lastly, these AI pundits have become worse than the Bitcoin guys. There were a few Bitcoin guys, like Strategy’s Saylor, that more or less exploited the retail community. With AI, there are theoretically more credible people, doing the exact same thing. It has become like religion for them and their cult followers too. There are several big mouths on Twitter and they just go back and forth with themselves, spewing complete nonsense. It starts from the top down with guys like Elon Musk and Jensen Huang, then you have the David Sachs class of people, then the investment class of people and then a bunch of influencers and other dorks. It is like a giant circular reference of nonsense.
The only thing they are missing is a cookie in the middle, but that sure is how they have circularly financed the whole industry. A mass formation psychosis has set in around a broken technology that they have all tied themselves to, and now the economy along with it.
My advice, they should stop wasting time with all the promotionally nonsensical tweets and just keep tweeting HODL. What is the diff?
Post Script
If data centers in space are already solved, well then why are there not data centers in space?
Further, if space is the answer, why are you vehemently arguing for data centers on earth? Tweet and subtweet, notice the circularity between the two:
This one is a classic too, AI expense is up 100x since March and doubling every month. If it is so efficient, why is its expense doubling every month? Also, let’s do the math here. For arguments sake, say the expense was $10k in March. If it wasn’t that, what were you even running your mouth about. If it is up 100x, it is $1 million at the end of August. If it doubles every month, it is $4 billion a year from now. Then $8 billion the following month.
Soon, bigger than the entire GDP of the world, which I think Anthropic may be claiming is their addressable market. There is no scenario in which a doubling of expense every month does not quickly put you out of business.
Position: Short NVDA (S)
