OpenAI lost ~$13 billion in the last quarter, but plans to spend $1400 billion more on "compute". When Sam Altman is asked about this by one of his investors, he becomes defensive and starts attacking short sellers (who aren't even present, and can't be).
Is it because things are going so well that OpenAI are seeking guarantees from the US government to more easily finance its enormous projects? And Nvidia seems onboard with this kind of begging (presumably for geopolitical reasons), given the recent statement by NVIDIA CEO Jensen Huang.
According to Michael Cembalest at JPMorgan, AI has been responsible for 90% of the growth in S&P 500 capex since ChatGPT was launched. What happens to the US economy if the AI wave starts to falter? The Mag-7 companies comprise almost 40% of the S&P500. The credit risk in Oracle (5y CDS) is already at its highest in a couple of years.
Also: isn't it strange that Meta is making AI investments off its balance sheet? I remember how banks and financial institutions thought they were oh-so-clever with SPVs and other off balance sheet shenanigans before the great recession in 2008. However, accounting tricks can only be taken so far. The risk is still there.
Apparently Palantir trades with a forward PE ratio of ~240.
As always, fun times in the fiat world!
https://blossom.primal.net/56c21825e85289b9575bb6997c72946915d79e2a4540c08f38fd23eae8899eb6.mp4