this post was submitted on 03 Oct 2025
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Fuck AI
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Ed Zitron has a pretty good analysis of this, pointing out that Nvidia is “investing” in AI cloud providers who then go and buy Nvidia chips. So they’re essentially inventing their own biggest customers.
And then these providers take out big loans using the chips as collateral. So there’s really nothing to go back to Nvidia if they fail.
And none of these are even close to profitable. So they will probably fail.
And Nvidia makes up 7% of the S&P 500 at this point. So if they lose their biggest customers, and their investments, and the marketing hype they’re capitalizing on by propping up these zero-sum chip sales… there’s a potentially large fallout.
That’s not even counting all the other big tech companies that have placed huge bets on AI, and therefore Nvidia. The magnificent 7 all together are more than 30% of the S&P 500. And if Nvidia falls, they probably all fall too.
I wouldn't bet too hard against NVIDIA. Sure their margins/extortion pricing can go down with fewer customers, but LLMs are here to stay. Datacenter and mediocre models (Open AI) and getting good ROI from buying from NVIDIA is what is nearly impossible. US models tend to all concentrate on megalithic US military Skynet ambitions, and every release is a step towards Skynet. Open models, mostly from China, tend to be smaller (in GPU/memory requirements) but have better quality/cost ratios including use on accessible (non datacenter) hardware.
It's the datacenter gpu customers, and mediocre software/llms renting/owning them, that are the huge risk. At the same time, US empire bankster allies will invest for Skynet.
None of the AI providers actually make a profit on their searches and the marginal cost per user and search isn't dropping.