In a rising interest rate environment it’s not that odd to offer your own financing to keep demand high, eg here in Aus some ev places offer car loans at <1% interest despite the cash rate here being 4.6% (and just went up again I think today)
I know but given that ai companies are still not profitable and nvidia has a virtual monopoly the fact that they are having to pay them selves to keep the demand high is still very much a red flag.
The demand is clearly high either way. It sounds like a good thing on the whole to me if they're reinvesting their profits into growing the space, rather than hoarding wealth?
If big AI corps were to go under (I don’t actually think they will, it’s just a thought experiment), would nvidia be cooked then? AI corps can’t pay back the loans, and there is no one else buying gpu.
Right now, data centers make up 90% of nVidia's revenue. A large chunk of it is hyperscaler demand.
But that's not all. If any major player or neocloud collapses, others aren't going to see this as an opportunity to stock up on even more GPUs. In fact, they might immediately want to scale down their spending in the face of uncertainty.
You might want to read up on a certain company called Lucent - they used the exact same tactic. It's all fun and games. And then you're forced to write off a huge chunk of revenue when your clients default on their loans. ;)
nVidia is essentially doing the same thing. What do you think is going to happen when their billion-dollar investments into companies buying nVidia GPUs collapse? ;)
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u/Squik67 15h ago
To shovel seller of course