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Posted on 12/08/2025 7:47:04 PM PST by anthropocene_x
The artificial intelligence boom may not be as real as it seems.
That's according to Pat Gelsinger, former CEO at Intel (INTC), who said the biggest players in AI are now funding their own growth.
"The quality of that revenue that they're committing in the future simply isn't as good, right? Because essentially I'm buying my own future revenue. Because rather than you putting your capital at risk, I'm putting my capital at risk.
Deals, investments, and credits are ricocheting between Microsoft (MSFT), OpenAI (OPAI.PVT), Google (GOOGL, GOOG), Anthropic (ANTH.PVT), and Amazon (AMZN), forming what Gelsinger calls "circular financing." The result is an ecosystem where AI providers are effectively underwriting their own growth.
Those big balance sheets are being used "in a creative way," Gelsinger said, but they create the illusion of unstoppable demand — even though corporate buyers, regulators, and the power grid struggle to keep pace.
(Excerpt) Read more at finance.yahoo.com ...
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I THINK that means they are not being government (US) subsidized.
It also means they are Private
Right now, AI is a growing part of all the listed companies core business in one way or another
The companies are developing AI infrastructure and core technology to support their evolving business
Known in military circes as , “ A circle jerk.”
No, it means they are not being funded by VC (venture capital)
Some of these future AI companies are currently working as Bitcoin Miners. And with 20,000 or 40,000 Self owned bitcoins to spend on AI computing these companies are easily situated to move into The new Data Processing future of AI. Low cost energy such as a near by hydro power facility or a nat. Gas well in western Texas or a wind farm or a solar cell spread in the middle of nowhere. Lots of low cost energy will be a key. New nuclear smaller size plants could be constructed. The future is Lots of electricity, bunches of AI and possibly Bitcoin will eventually reach 21 million. Bitcoin may die because of quantum computing. AI will be for certain.
Both statements hold true.
Rather a lot of miracle growth in earnings or anything else will disappear when the government stops pouring 2 trillion dollars per year into the “system”. You don’t have to declare a deficit to be fiscal stimulus for it to be fiscal stimulus.
And the real crushing reality is when GDP, not measured in percentage, measured in dollars, does not rise at a rate of 2 trillion per year. That means that stimulus poured in partly disappeared
Perhaps, but the same goes as it being a bubble which doesn't seem to be talked about all that much lately. This from the guy who ran the company that lost again to another processor maker (Nvidia) during his tenure.
How many here are HOLDING ON TO THEIR TULIPS?
Workers in AI companies aren’t complaining about chipping in money to keep the companies going.
It’s artificial....
Circular Financing.
One example given is that NVDA will “donate” $100 bil to OpenAI (with ~$500 bil in the next 5 years.)
And OpenAI immediately turns around and buys $100 bil worth of chips from NVDA.
But NVDA doesn’t have to write a cheque for $100 bil. It “donates” a billion and OpenAI buys a bil worth of chips. That’s NVDA revenue so they can “donate” it again, write it off from their taxes. Rinse and repeat.
But hey ! NVDA only has a PE of 45:1 and CSCO got over 200 in 1999.
So multiple expansion plus 25+% earnings growth should get NVDA to $40 trillion by 2030
Buy ! Buy ! Buy !
Uses past data to predict the future...
Can't forecast a Black Swan Event.
.
Consider the many billions of dollars in capital that Facebook invested to become Meta and the pioneer in artificial reality systems. Meta has now written off most of that investment, which was its own capital. The company would have done better to issue the money as dividends to the shareholders.
Since AI is being researched and developed by believers, it urgently needs the check of scrutiny from outside investors who are focused on seeing a credible business model and getting a return on their investment. After all, if general AI cannot find a market and earn reliable profits, then why should money be spent to develop it?
While AI has huge potential one must keep in mind that at this time AI is basically a data collection program. It gathers data from published works on the i-net and present a consolidation of those findings. What you read should be taken with a grain (gram?) of salt. Example: if the i-net has a majority of articles stating that 2+2=5, AI will most likely report that as gospel.
Use your common sense. It is something computers do not have.
FR needs a troll block feature.
That’s pretty much the first thing you’ve ever posted that I remember agreeing with.
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