[aurareturn]

  - you fund a new company and sign long terms contracts with it - this new company uses the money you gave it and a lot of debt (backed by long term contracts) to build datacenters and buy a lot of GPU - your figures look great

Coreweave and Nebius think this is a great business model. Their lenders also think this can work. It's not the fault of Nvidia.

If their business model thinks they can make a profit doing it this way, why stop them?

The core problem here seems to be that people think your supplier having an equity stake in your company is wrong or risky.

[vb-8448]

> Coreweave and Nebius think this is a great business model.

It's irrelevant.

> If their business model thinks they can make a profit doing it this way, why stop them?

I don't think someone needs to stop them, but there are some legit questions that need an answer:

- what happens to all these companies when growth decelerate or stop?

- what happens to nvidia stock when it has to buy back unused gpus?

- what are the risk that a sectorial financial crisis turn into a major economic crisis?

[SecretDreams]

> The core problem here seems to be that people think your supplier having an equity stake in your company is wrong or risky.

If these were all private entities, I think it'd be okay.

But they're public entities and they're using the pittance of investment as a force multiplier on their stock price, which they're then regularly using to raise capital.

A lot of dumb money in retail investors (as well as corporate) are a big reason this valuations bubble is occuring - which is really the elephant in the room. It's not that the tech isn't real. It's that the valuations behind it have already priced in maybe a decade of profit that hasn't come close to materializing for the LLM vendors; although, the shovel sellers and makers are doing phenomenal - and they have a vested interest to keep the party going with many sweetheart financing/equity deals.

[aurareturn]

The actual money is coming from big tech profits, debt, and rapidly growing AI revenue (Anthropic growing from $9b ARR to $60b+ ARR in a few months). A very small percentage is coming from Nvidia.

And before someone tells me AI demand is fake and circular, my company is spending thousands on Anthropic a month, up from $0 in 2025. And no, we're not getting scammed by Anthropic or tokenmaxxing for no reason. We are getting value. At minimum, my company is not part of this circular thing.

[GhastBartender]

> my company is spending thousands on Anthropic a month

The problem is that this is simply not enough. They need you to spend tens of thousands, probably closer to hundreds of thousands, before the numbers start making sense.

> At minimum, my company is not part of this circular thing.

You're in the blast radius. And if you don't have a plan for "what if Anthropic hikes the API rates by 10x or worse", you're in the kill zone.

[aurareturn]

Anthropic just made a profit. So it does seem to be enough.

[SecretDreams]

Anthropic and OAI are both looking for 1T valuations. Anthropic is projected* to make $500mil operating profit off 10bil annualized revenue. They need to grow these numbers 10-50x more for the valuation they're seeking to make sense.

Tough pill to swallow given they lack a moat and their compute is being subsidized by the companies they lease it from, all of which are INVESTED in Anthropic and have a desire for their growth story to look good because when they IPO it gives those same investors a better shot at making their money back.

That's the circular aspect of this whole scheme. Nobody makes their money back if the LLM company valuations get more realistic.

[uncivilized]

What value?

[lqstuart]

I’m at a very fast growing startup with real revenue and Fable has let us avoid hiring probably 6-10 full time software engineers with full salary and benefits. We’re spending nowhere close to that. I’m the hiring manager and I’m closing the reqs.

So.. great news for Anthropic, I’ll go ahead and let the elephant in the room go unaddressed

[uncivilized]

6-10 engineers for a startup seems suspect. Is this some sort of web app where there would be lots of training data? I’m not a web developer so I don’t know what else to call it besides web app or SaaS or whatever it’s called in that world.

[lqstuart]

Not sure what you’re getting at, is that too many or too few? Terraform, building grafana dashboards, building internal UIs, provisioning the networking and dealing with security groups and routing tables, IT stuff like MDM/SSO/OIDC, not to mention the entire data and ML infra is easily 10 engineers. And in a startup they’d all be juniors and do an even more terrible half assed job than Claude. These are all very well established fields with ample documentation online, and honestly pretty simple tasks as long as you have senior people to feed it a design that isn’t stupid.

[derangedHorse]

> But they're public entities and they're using the pittance of investment as a force multiplier on their stock price, which they're then regularly using to raise capital.

That's not how that works. Their stock price is not directly correlated with them raising capital since Nvidia has not issued new shares (or sold shares on the open market) since their IPO. Their corporate bond is also not based on, or relies on, the stock price since they must be paid back in cash.