If healthy and risky circular financing deals look similar at first, how can investors or regulators tell when a circular deal has crossed the line into something dangerous...especially when it's off the balance sheets?
I think the real question in all sorts of financial setups is really “is the dollar actually worth a dollar”. So when company A invests in company B which buys from company A the actual question is whether the valuation of the investment and the valuation of the purchase is correct or are they getting high on their own supply
First cash/dollars are considered bad so they collapse in price. When the psychology shifts, suddenly the dollar climbs in value and itself bubbles over, causing a recession.
Not sure if you're referring to dollars as an alternative to other forms of cash (e.g., treasuries, money market funds, etc.) or as an alternative to other currencies (e.g., Euro, Yen, etc.). If it's the latter, then I think we've seen recessions and booms where the opposite happens, depending on the balance of payments situation.
Is HN really this fast!? Everybody already skipped the hard questions whether LLMs are intelligent? 'It' can already be commodified?
So how much time and effort it took from these companies? A couple of years and millions spent on PR? And LLMs are "intelligent" all of a sudden, is what everybody says nowadays?
Especially applicable for programmers: naming things is not only hard, it's also important, and can be very insidious. Remember, marketeers also name things. For example, naming the internet 'the cloud', some 15 years ago.
I can't stop thinking about a quote of one of my favorite authors (Theo Kars): "Progress can only be technical in nature, because knowledge is transferable and wisdom is not." [translated from Dutch]
Whether inference hardware will be a commodity remains to be seen. We had twenty years of most servers being x86-64. That's commodity compute. Inference hardware isn't a mature architecture yet. There will be progress and obsolescence.
Observing how the US stock market is behaving this week (up-down-up-down...), I feel like many investors don't appreciate the distinction between good and bad circularity.
Part of the market issues this week are Korea imploding and Japan about to implode. Japan's bond rate moving up could mean the end of the carry trade. Korea apparently has many stock tickers but only two distinct companies behind them. This caused their market and their overly leveraged retail investors a lot of pain.
Eventually. I'm a bit concerned about it right now. I think SpaceX showed that the AI story is weaker than promoted. This will make people wonder about all the money going into it. If the bubble pops, the blow back on that particular index will be huge. Maybe dotcom bursting huge. But after 15 years QQQ move positive.
SpaceX is a really interesting one, tbh, especially in the context of circular deals... they're making $2b/month leasing their data centers to Anthropic and Google, which is a huge markup.
... but then again... if they are leasing the compute then it implies their own AI work isn't paying off?
If healthy and risky circular financing deals look similar at first, how can investors or regulators tell when a circular deal has crossed the line into something dangerous...especially when it's off the balance sheets?
This has been bugging me quite a bit. I think the more "off-balance-sheet" the deal is, the shadier it gets... But it's really hard to tell early on.
I actually think Nvidia's deals have been above-board, generally speaking, because they are transaprent.
Less true for Meta and Terawulf.
I think the real question in all sorts of financial setups is really “is the dollar actually worth a dollar”. So when company A invests in company B which buys from company A the actual question is whether the valuation of the investment and the valuation of the purchase is correct or are they getting high on their own supply
A recession is a cash/dollar bubble.
First cash/dollars are considered bad so they collapse in price. When the psychology shifts, suddenly the dollar climbs in value and itself bubbles over, causing a recession.
Not sure if you're referring to dollars as an alternative to other forms of cash (e.g., treasuries, money market funds, etc.) or as an alternative to other currencies (e.g., Euro, Yen, etc.). If it's the latter, then I think we've seen recessions and booms where the opposite happens, depending on the balance of payments situation.
> commodification of intelligence
Is HN really this fast!? Everybody already skipped the hard questions whether LLMs are intelligent? 'It' can already be commodified?
So how much time and effort it took from these companies? A couple of years and millions spent on PR? And LLMs are "intelligent" all of a sudden, is what everybody says nowadays?
Especially applicable for programmers: naming things is not only hard, it's also important, and can be very insidious. Remember, marketeers also name things. For example, naming the internet 'the cloud', some 15 years ago.
I can't stop thinking about a quote of one of my favorite authors (Theo Kars): "Progress can only be technical in nature, because knowledge is transferable and wisdom is not." [translated from Dutch]
I'm pretty skeptical of the LLM hype, but I'd say it's fair to describe LLMs as displaying some form verbal intelligence.
Whether inference hardware will be a commodity remains to be seen. We had twenty years of most servers being x86-64. That's commodity compute. Inference hardware isn't a mature architecture yet. There will be progress and obsolescence.
Observing how the US stock market is behaving this week (up-down-up-down...), I feel like many investors don't appreciate the distinction between good and bad circularity.
Part of the market issues this week are Korea imploding and Japan about to implode. Japan's bond rate moving up could mean the end of the carry trade. Korea apparently has many stock tickers but only two distinct companies behind them. This caused their market and their overly leveraged retail investors a lot of pain.
Good point. Do you think the NASDAQ selloff will recover once Korea stabilizes?
Eventually. I'm a bit concerned about it right now. I think SpaceX showed that the AI story is weaker than promoted. This will make people wonder about all the money going into it. If the bubble pops, the blow back on that particular index will be huge. Maybe dotcom bursting huge. But after 15 years QQQ move positive.
SpaceX is a really interesting one, tbh, especially in the context of circular deals... they're making $2b/month leasing their data centers to Anthropic and Google, which is a huge markup.
... but then again... if they are leasing the compute then it implies their own AI work isn't paying off?
In short: I agree with you.