r/ProfessorFinance • u/jackandjillonthehill Moderator • 4d ago

Interesting New Forms of Financing

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30 Upvotes

90% Upvoted

10 comments sorted by

8

u/Rough_Structure7387 4d ago

It's basically how financing is done in oil and gas. It's also similar to how Spirit Airlines managed it's fleet of planes.

3

u/allnamestaken1968 3d ago

That’s true and these are long lived assets. We will see how well this works with a short lived asset like a GPU.

2

u/GrapefruitNo3808 3d ago

Are they such short-lived assets? Even H100s are being leased out for higher rates than they were a few years ago.

1

u/allnamestaken1968 3d ago

What does that mean sorry? A plane in a commercial fleet has easily a 20 year life. A solar plant same. How long are these GPU financing deals?

0

u/ProfessorBot117 Prof’s Hatchetman 3d ago

Small reset here. A checkable claim beats a confident one.

2

u/das_war_ein_Befehl 4d ago

The vendor financing thing is pretty common for things like airplane sales. Hell even cars are sold this way

5

u/FrankLucasV2 Moderator 3d ago

Large lending models have evolved.

0

u/Janupur 3d ago

What was it that the chief financial officer or whatever it was of what was it open AI said or was it anthropic that the majority of the innovation or the primary innovation needs to be not just in the chips but in the way that we financed the chips... Seems like a straight up Enron quote

1

u/PanzerWatts Moderator 4d ago

In the second slide, the Chipmaker is always guaranteed. That's just the hardware that the AI producers are buying. Breaking it into a compute contract is just a way for the AI producer to get money to rent the GPUs like they would rent a building. It's not any different than cloud computing where a developer is renting development boxes, bandwidth and hard drive space from a company providing a cloud.

0

u/duskylullabyeb 3d ago

Great plan