The rest of us knew it was a scam all along. and we didn’t need AI to figure that out.
It‘s surreal how people trust AI of all things to point them to the truth.
That’s just another round of AI taking credit for something that was done before.
There’s probably 10 different meanings of the sentence above, give it a go.
While true, what actually happened was interesting. Algorithm’s are not inherently bad, afterall.
At some point, someone wrote a rule to verify DSO against other tech companies, and trigger an automated short position to correct the market changed from an earnings call.
To me, that’s pretty cool. This wasn’t magic LLM AI, this was a smart engineer that programmed a system to discover problems as they arose.
Kind of gross how this article seems to be trying at every turn to say, “no ai is actually good! It helped us catch the bad businessmen that happen to be in the AI industry!” By focusing on a tiny trading period on November 20th.
Hank Green isn’t a finance bro or an AI guy or even really a tech guy. He’s just a guy reacting to things that are trending, and I remember I had seen the main graphic he was talking about floating around the internet for a while before I watched the video. People have been calling AI a “bubble” for much longer.
I am old enough to remember the report that 95% of generative AI companies failed to see returns from using it. That was back in August.
I don’t like giving credit to “trading algorithms” for things that humans figured out a long time ago.
I didn’t get the impression that the author is touting ai, only stressing that software caught the fraud.
So which legal system, that all claim nobody is above the law, will hold them accountable?
why call Ed Zitron an algorithm tho
I like how there are all these terms with increasingly loose definitions, to which we attach different levels of evilness:
- algorithm - older, reliable, deterministic except when it’s “The Algorithm” in capital letters like “The Social Media Algorithm”; then it becomes evil
- machine learning - been out for decades, hasn’t destroyed the world, mostly does its job undetected. Used mainly by technical people
- machine intelligence - The machine is starting to become conscious but it is still generally helpful. “Machine intelligence” performs brain surgery, detects tumors, folds and unfolds proteins, whatever that means (but it sounds like a good thing, so we’ll give it a pass)
- artificial intelligence - machine intelligence’s evil twin. Takes credit for everything good that comes from the other ones and we tend to believe it, because it’s the only one we can actually speak to and can lie to us very convincingly. On its own it can draw pretty pictures and animate them, write code that occasionally works, pretend to love us and teach us the most effective way to slash our own wrists
So AI exposed AI scam?
So uh AI works then and will fix all our problems that it caused in the first place 👍
Roflmao
Good reading. Besides Nvidia and the AI money bubble, the link to Bitcoin is interesting.I‘ve read so many other articles about financial acrobatics with Bitcoin and how it collapses now, I‘m waiting to see it falling down to 50k.
ELI5?
If I gave you $5 and then you gave it to someone else and then they gave it back to me we’ve done nothing but can call it $15 in business transactions.
Nvidia invests in company… Company buys Nvidia items… Nvidia stock goes up… Nvidia has new pretend money to invest into another company…
And this is news to people?
Apparently so.
Question is: which of those is truly the best short play?
Only winning play is to not.
Why would nvidia have new money to invest when its stock goes up? That’s not how the stock market works, you buy stock from other investors, not the company. Unless they finance all their investments with debt and use their higher valuation to get easier access to that financing. Which seems unlikely.
Don’t get me wrong, I 100% think AI is a crap bubble, but I don’t think you understood how this scam works.
NVIDIA sells GPUs to Oracle. Oracle sells GPU time to openai.
When time comes to pay the bills, openai doesn’t have the money to pay Oracle who then doesn’t have money to pay NVIDIA. So, Oracle gives stock to NVIDIA, and openai also gives stock to NVIDIA.
NVIDIA doesn’t care if both go broke because now a gpu is worth a lot more, and in the books they’re selling a lot more GPUs each for a lot more money. So NVIDIA stock goes through the roof even if they ran out of cash and got into ridiculous debt.
Shareholders have a ridiculous profit, NVIDIA directors get a massive bonus and NVIDIA CEO gets famous.
Why is it a problem? Because nobody has cash and this can’t go on forever without some massive bankruptcies. I’m sceptical anyone is paying their power bills or servicing bank loans, so these may get dragged into the mud too.
Wouldn’t NVIDIA care? They now own part of the company in exchange for that hardware?
If they go bankrupt, nvidia loses their stake in a company, and it all falls apart. GPUs won’t stay this expensive if this implodes.
OpenAI though, can only go on for as long as their venture capitalists are willing to support it.
I’m not convinced the current LLM architecture can ever make an AGI, but it a can be useful and be made more useful. There could come a point where it’s usefulness and it’s short comings reach a profitable point that people will accept.
What could also help is nvidia being able to come out with more power efficient chips as well. It could go a long way to solving at least one of the problem.
Companies issue new stock to raise capital all the time.
Yea, except Nvidia didn’t.
I think I understand. Can… Can I have the $5 now please?
300% profit! Where’s my bonus!
You are allowed to take an extra 15-minute break.
But it has to be used this week. And during quiet times. And not within an hour of any other break. Or the start and end of your work hours. And not on any day that ends in Y.
I haven’t read the article, but I have read previous accusations of the same thing, so I assume it’s the same.
Basically, the new AI companies are all losing money, but they are all investing big money in each other which makes it look like the industry is doing well.
I think this snippet get the gist across:
The money flows in loops: Nvidia invests in AI startups, startups commit to cloud spending, cloud providers purchase Nvidia hardware, Nvidia recognizes revenue, but the cash never completes the circuit because the underlying economic activity—AI applications generating profit—remains insufficient.
“Every public company now faces machine-speed scrutiny of accounting practices. Anomalies that might have persisted for quarters until human analysts identified patterns now trigger immediate algorithmic responses.”
Is this what he meant by we should be using AI for everything?
Absolute idiots
