VC

Bostradomous

The same way VC drug companies grew revenues while losing patients: charge more money but collect from less people. On paper the revenues are up, but the business itself is shrinking. It’s essentially an accounting trick that will eventually catch up to them.

RoyalCities

Yeah GPUs don't hold their value long term. I mean they do NOW because VC funded startups have choked the supply but that's more of a scarcity reason than say technical leaps. It also depends on the card. Consumer / GTX cards would depreciate faster than the datacenter ones. The datacenter cards are tested and rated for 24/7 operation. I remember after the 2017 crypto boom a bunch of cards hit the market that were used for mining and the life you get out of them just isn't the same as if they were used for light gaming. Alot more fan death, artifacts - general hardware failure.

RoyalCities

Too much competition and too much supply. There was ALOT of VC capital flooding startups hoping to be the best runpod. These are the companies who created the shortage plus the mag 7 of course. But I mean seeing how low the pricing has gotten and the projections that the cloud rental space will go lower Im inclined to think there was simply too many players piling in at one time. I did cloud training (before I got my own rig) so watched the prices tank basically in real time over the past year and a half. This article is interesting on the subject.

Aggravating-Salad441

I think you're underestimating the impact to the ecosystem. Why wouldn't Google, Amazon, and Microsoft take a hit if OpenAI failed? While everyone says these companies have earnings, it's also true that a lot of their earnings growth is coming from cloud segments. Those cloud segments are growing rapidly by hoovering up VC money from all (mostly unprofitable) AI companies. What happens when the VC money stops pouring into OpenAI and Mistral and ___? That will crush the most important customer segment for cloud earnings growth. Google, Amazon, and Microsoft won't go out of business. Obviously. They'll still be profitable. Obviously. But they very well could see earnings decline for a year or two as the excesses are squeezed out. Multiples investors are willing to pay would decline. There's no way the infrastructure companies skate free when OpenAI stumbles. Don't confuse survival with thriving.

lolkkthxbye

OpenAIs spending is partially responsible for NVDAs earnings. All fueled by debt and VC. I think you’d see a decline in earnings among the AI supply chain (data centers, memory, etc). Good news is all that VC money can be redirected to better investments.

Panda_Pam

Financial advisors, if they are from big firms like JPM, ML, etc., can give you access to alternative investments. I don't mean bitcoin or gold, I mean private equity, exchange funds, VC funds, etc. that you wouldn't be able to get in open market. Imagine if you were a VC invested Anthropic a couple of years ago, you would be banking right now! Alternative investments would be good for diversification, especially if you think AI bubble and recession will lead to a big correction in the market. One caveat is that private equity and exchange funds come with higher fees (I've seen up to 5%, they usually have performance fee on top of admin fees if the investment is doing well) , minimum size requirements (the smallest minimum investment that I've come accross is $50k), and for the most part less liquid. But if you're young, have excess money that you don't need for the next 7 to 10 years, it is not a big issue. With regard to fees, you can negotiate fee reduction as your portfolio grows. I've been able to get my fees reduced from 1% to 0.9%, to 0.7% over 10 years period, and should be able to get it down to 0.6% in the next year based on growth projections. Also, if you're interested in private equity or exchange funds, have your financial advisor waived the placement fee.

blbd

In the abstract, no. If you build a network and start to meet people, yes. But it has to be a subject you are passionate about and interested in so you know what to look for. I have experience doing startup companies, so once I hit accredited status, I put a small amount of money into a VC, where I know everybody that works there.  If you do it randomly just because you can without planning it, that will underperform a Boglehead three fund portfolio. 

SelenaMeyers2024

Yeah this is not the way.... Asst is a play.... So is dfli... So is inhd.... Everyone gets a piece. Play VC where you expect each position to fail and one to 5x or more

kadam_ss

This is a desperate attempt by private investors and VCs to dump openAI bags ok retail. If this AI bubble “pops”, public companies like mag7 would get hurt bad, but smaller private companies will get wiped out. That will wipe out tens/hundreds of billions of private capital, VC money. Last ditch effort to move risk to retail

WelpSigh

The hit would be that they wasted a shitload of money on something that will never make them money, which would be Bad. The business is large enough to withstand it. The issue with "monster demand" is that right now, the AI companies lose money on every query. Inference costs exceed revenue per prompt. That is without factoring in the capex and R&D spend. That isn't likely to change in the near future. Businesses and consumers are not paying the true price of AI by any means, it's subsidized with VC money.

Electronic_Muffin218

Yes, the codebase has to change if folks have hard-coded to CUDA (presumably any of the larger NVIDIA customers do this to maximize ROI, but they are also the most well-positioned to rewrite to TensorFlow or whatever is the new hotness for TPU use in Google Cloud). TensorFlow continues to work on NVIDIA, but I have no idea how optimal it is or not. The general advantage to the TPUs is going to be cost over time - less expensive per unit/work for Google to build, and they design and deploy a new generation roughly every year that delivers better efficiency per unit power. Yes, NVIDIA will continue to produce higher-density chips over time, too - but I don't believe they are as efficient at comparable tasks and the gap will continue to widen - but IANAMLP. I suspect Google will have to discount TPU pricing vs. comparable NVIDIA pricing to attract customers afraid of vendor lock-in to TensorFlow, but their cost of goods to deliver those units of processing has got to be much lower. Presumably some tasks are more suited to CUDA (See [Google docs here](https://docs.cloud.google.com/tpu/docs/intro-to-tpu) for a list of tasks that aren't optimal on TPUs). I have a feeling larger companies will move to multivendor ML/GenAI provider sourcing for all of the same reasons they do so for general cloud compute today - price leverage. Yes, there is pain in having to write to N different APIs. There are some solution providers who abstract that away, but you have to pay a price for those software layers. Here's how adoption goes for the little guys: \- startup founders DIY for a time on rented cloud AI, nudged toward one vendor by their benevolent VC advisers for Kairetsu purposes \- eventually, the company scales so much that they negotiate a deal to get preferred bulk pricing from any one of the big vendors \- eventually, the company gets bent over so badly by that one vendor that they immediately rewrite on some sort of intermediate abstraction layer and pay the price to get access to deployment on the other cloud vendors, so they get some pricing leverage back \- eventually, the company gets big enough to make it worthwhile to rewrite directly to each cloud vendors' APIs and make their own abstraction layer At any point along the way, the little guys may die, get acquired, or stall out at a size where it doesn't make sense to go to the next stage. Here's how adoption goes for the big-sized guys whose primary competency is not computer systems: \- endless RFPs for years handheld by consultants, eventually deal is inked, consultants get paid handsomely to start moving workloads into the cloud \- the solution gets rebuilt a few times over the ensuing years, never quite working as advertised, but well enough to claim some victories for director and VP promptions

OutsideSpirited2198

AWS is losing with startups. Most of their introductions to startups come from VC trying to lock them into AWS contracts with early credits, but startups are waiting before approaching VCs and building on cheaper infra these days. Short term not a problem but long term might be.

Sleepergiant2586

##Everyone knows OpenAI is gonna go IPO and will easily raise billion smaybe even trillions. Raising money from private VC market or via IPO is no big deal. Infact I am betting in 2026 their IPO is gonna come and suddenly shoot up prices of all the companies who they dealt with.

RoyalCities

P/E is one metric but stock concentration is another risk to consider. Cisco alone was around 4% of the s&p during the dot com era and Nvidia is at 7. It's gotten as high as 8 making it the most concentrated stock since record keeping began. The mag 7 accounted for around 40% of the entire s&p. When you have high concentration like that it makes the whole market more fragile. Also all the deals being made are within the 1 sector. 70% of Nvidia's sales are to other mag 7s and the rest is going to VC funded fabs trying to compete with runpod. I train these models and every single day I'm fed new ads from random companies I've never heard of offering h100s for peanuts. I don't think this is sustainable so if it isn't a bubble I atleast expect some closures and consolidation because it's just not sustainable.

Hot-Celebration5855

I listed two companies that invested in them. Now scar that math up for meta, oracle, a dozen other major tech companies investing in these companies. Not to mention the enormous amount of VC money they can tap into. Wake me up when any of these businesses has a down round in their equity raises.

WaveZealousideal2848

I like that it has a small market cap and the weekly chart trend is looking very nice. They also have some contracts that look juicy, any good news will push this thing up. Here's some AI jargon: * **RM 11.6 million (\~US$ 2.6 M) Rooftop Solar Contract** * Contract to build a rooftop solar PV generating facility in Malaysia. * Construction expected to take **2 years**. Then, after construction, FGL signs an O&M (operations & maintenance) agreement (15–21 years). * The company says it expects a *double-digit profit margin* on this deal. * **Multiple Large-scale Solar LOAs Worth \~US$5.5 M** * FGL received several *Letters of Award* (LOAs) for large solar projects. * Their scope in these projects includes full EPCC services, supply & install of dc/ac systems, instrumentation & control, civil work, etc. * **Conditional LOA: \~US$68 M for 100 MW Solar Farm** * A conditional LOA (letter of award) for a 100 MW solar farm in Tanjung Malim, Malaysia. * This project is interesting because it is tied to an **AI data center** in Enstek City, suggesting FGL is aligning with data infrastructure + green power. * **MOU with GCL – USD $220 M Potential Project Value** * Memorandum of Understanding with GCL Systems to jointly develop renewable energy projects (PV + possibly storage) across Malaysia / ASEAN, with a potential project value of up to US$220M. * This could significantly boost FGL’s pipeline if fully realized. * Very aggressive pipeline: The company is targeting up to **RM 17.4 billion** (\~USD 4.1 billion) in EPCC opportunity through 2028. * They are partnering with **GCL Systems Integration Technology Co. Ltd.** on renewable energy projects across Malaysia and the ASEAN region (MOU signed). * They are integrating **AI / drone technology**: working with VC AI Ltd to develop AI-powered drones for solar farm inspections. The idea is to reduce O&M costs and improve efficiency in monitoring solar panels. * Geographical expansion: They’ve expressed interest / activity in Vietnam — e.g., a proposed acquisition of an 80% stake in a Vietnamese solar company (VES 1).

JacquesHome

You seem to be really stuck on the stock buybacks and bad Google leadership. Don't take this wrong way, or do, I don't think you are in any position to judge Sundar / Google as having bad leadership. First, Google has more than enough cash to spend $50B a year on CapEx AND do stock buybacks. Second, Google has trounced the QQQ by 1.5x over the past 5 years and by 2.5x since Sundar became CEO. Google dominates every market it plays in Search, Ads, and Youtube (kills Netflix by a wide margin). They have a portfolio of Deeptech bets that would make any VC jealous.

JacquesHome

Incorrect and horrendously bad take. OpenAI has access to equity financing which everyone knows is the higher cost of capital. Google has access to the debt markets and free cash flow. Google can spend $50B a year for the next 10 years and it will have ZERO impact on their viability as a business. You are seeing the narrative on OpenAI change in real-time, every additional dollar raised for OpenAI is now going to come with higher scrutiny and more onerous terms. I've been in the VC ecosystem for over two decades now, I've seen this story play out too many times. OpenAI isn't going to implode or fail or die, thats stupid, but things are about to get harder for them.

Jedclark

Google's biggest moat is just infinite piles of cash. They can run Gemini at a loss for a very long time to shut the VC-backed companies out. I do wonder if this affects OpenAI/Anthropic's pricing power, they can't "turn on the money machine" the way companies like Meta did with Facebook/Instagram for example because they don't have the monopoly/network effect in this area. Putting prices up is the perfect time for Google to say "Gemini subs are now $5 to new users".

salespunk44

Having been in and around firms funded by VC’s and Private Equity I can tell you they are momentum lemmings. If they see a hot sector they pile in hoping to ride the wave. The secret is they only need 1 in 10 to hit. That is their metric.

therealsilentjohn

> the dilution will erase the yield and then some This is, indeed, a *huge* issue with most networks. When you read that whateverChain has 70% yield for staking, it's usually a VC-backed, centralized, low-usage, high inflation network. Some networks, like Ethereum, have a fee burn mechanism. During high usage time periods more supply is destroyed then created, creating deflation of the supply. During low usage time periods, more supply is created, incentivizing staking. You can see this in realtime on https://ultrasound.money > In other words it's only sustainable with a continuous influx of users. So it's arguably not a Ponzi in the dictionary definition of the word but the dynamics sound awfully similar, there's just an extra step in the middle. You're just describing how *any* market works. Yes, if there's no users for the network, then the coins just inflate away and the coins are worthless. That's also how the stock market works, or Amazon marketplace. Other than buying a house, land, or productive equipment ***all you are ever buying is something that has social value***. The end of that line of reasoning is to stock up on a bunker to survive the apocalypse and become self-sufficient. Most of those "real" things effectively amount to buying your way into another job. Want to buy farmland? Great, how does that improve your life? Are you going to farm it? That's buying your way into a job. Want to buy rental property? Great, are you going to be a property manager? That's buying your way into a job. Stocks are owning nothing just as equally as crypto. Being backed by physical company holdings? By the time a company would go through bankrupcy you are last in line to claim and you aren't seeing a cent. Owning gold? You ever actually buy physical gold? Like, have it shipped to your house? If not, then to you it's as immaterial as crypto. If yes, were the atoms in it really so useful that it's what you bought? Did it's weight and luster improve your life somehow?

Huge-Albatross9284

It's a huge tech focused Japanese VC/asset manager specializing in tech with a whacky nutjob founder. It get's reported on because he does outlandish things all the time.

insightful_pancake

It is an investment firm but not a PE firm like the ones you mentioned. It’s highly relevant today given its large investments in AI companies, notably its ~$30bn investment in OpenAI, and its recent sale of NVDA. The company was, a few months ago briefly, the largest company by market cap in Japan and has been notable for decades, also driving much of the VC wave and tech investment during the 2010s and early 2020s (with a mixed record but I digress). The CEO has also been very vocal with the media for decades so he gets more attention than more less public CEOs (eg at the companies you mentioned).

Distinct_Recipe4798

Remember 2008 happened cause outright lies on the financial side + people bought houses they literally can't afford, and banks lending this money literally could not pay it back when they needed it. For this bubble to implode, what will be needed is a combination like that such as lies about financials + outward pressure to force OpenAi and all these companies to pay back the money they got from VC investors. If firing people to "replace them with AI" doesn't payoff where they literally don't have the money to pay it back then the bubble will blow. Without the pressure the bubble could indefinitely continue.

wazzu_free

Nvidia is still beating expectations is true, but , this revenue is derived almost entirely from infrastructure build-out (CapEx), not yet from sustainable consumer application utility (OpEx). It feels like we are building a massive centralized structure where the revenue is just money circulating from VC/Big Tech into Hardware( AI Hype → Massive CapEx (buying GPUs) → Amazing Revenue for Hardware companies → Validates Hype → More CapEx circle jerk), without enough leaving the system as end-user value yet. When cash becomes desirable (as you noted), companies might tighten that CapEx spending first. If the shovels stop selling because no one is finding enough gold, the correction could be deeper than just a valuation reset.

Inspector330

I disagree. The Dot Com bubble had people investing in worthless fantasies. They were not investing in the internet itself. While it may be true non publicly traded companies may be eating up VC money by adding the AI buzzword to anything they to (in this case it is the dot Com bubble), there are a few major players leading the new tech revolution. This is still the early stages. If you invested in any of the early revolutionary big players during the Dot Com era, you would be tremendously wealthy today. Think 20 years ahead, and spot the obvious leaders in the field. Just like the internet, any company that doesn't properly implement AI in due time will become obsolete or stagnate in growth.  Do you really believe nations around the world are all wrong? This isn't about what AI can do now. This is about growing it into what it can do in the future. 

Ok_Ground9015

You leave him alone. He just has a very high IQ, and no real knowledge or common sense. His speculation was formed on conjecture at best. Usually people with high IQ are just good at seeing patterns. I've taken a couple of IQ test. It gave me a good understanding of what they test for. I'm not even moderately gifted, nor above average. I'm on the tippy top end of average. Though it didn't test for any of my accumulated knowledge whatsoever. I'm fluent in 12 programming languages, fairly good at pattern recognition, excellent at problem solving, certified 6 times from Harvard in computer science, certified in integrated digital imaging and commercial computer graphics from TSTC, certified in networking and databases from VC, and been making websites, producing music, digital art since the 90s. The IQ test is garbage for testing intelligence. I would have likely scored the same on the IQ test without any education after junior high.

_hiddenscout

Volume in general goes down this time of year and we’ll get the tax harvesting moves soon as well.  I find the AI bubble thing interesting, since I think it’s somewhat true. Personally I’m not worried about like hyperscalers or companies with billions of FCF.  I think there is more of a bubble with VC AI backed apps, the nuclear names, quantum, and some of the names financing things. 

_hiddenscout

I do think they are parts of the AI trade in a bubble, but not all of it. Nuance is something that is lost online a lot and sometimes in investing.  Like I’m not worried about the hyperscalers who have billions in FCF, but see the stuff like growth in nuclear names and quantum as more part of the the bubble of the AI trade. Especially the stuff VC is funding of just a bunch of bad apps. 

goldmedalsharter

They'll raise cash if they don't. Greedy VC piggies will pay.

OldPersimmon7704

It's still a great tool and won't go anywhere. It should still be understood that the vast majority of AI implementations aren't profitable, and that's before we reach the point where the AI companies start trying to take profits. Once OpenAI starts profit-taking instead of writing off billions in losses to stoke the hysteria, I'd expect that AI profitability rate to move dangerously close to zero. People in the market are launching money at AI based on a sales pitch while fundamentally not understanding what the technology is and what the limitations are. I have a computer engineering degree and know how this works under the hood. Two things become very obvious when you have a real tech background: (1) This doesn't scale forever and (2) the hallucination issue is very likely unsolveable. Under the extremely likely circumstances that we can't solve hallucinations, do you think a technology that you can *never* fully trust is worth this much? Does it also make sense to pay some multiple of what we're paying now for API tokens once the VC money dries up? I would think not in most cases...

letsgobernie

Exactly. The whole hypothesis has been that there are insignificant/insufficient uses for this tech, net earnings to be made now and in the future to justify the expenses . So the chain goes: precarious LLM based startups cobbling together expensive/useless stuff > OpenAI > large tech companies > Nvidia Nvidia is literally in the end of the queue - able to sell hardware while the ones who are supposed to show utility in this tech and heavy investments come up empty. Whos aid we'll jump straight to hardware sale slowdown? Maybe people here did, but they are not articulating the bear thesis correctly then. Look for the private VC investments to start dropping in valuations, cause they are the weakest, then OpenAI loses a bunch of its API calls and shrinks in revenue, maybe goes through a downround, and now people start asking questions about utility, about pausing data center build outs and pausing Nvidia HW purchases - literally happens towards the end.

Spear_n_Magic_Helmet

there’s only one share of me and my EPS this quarter was better than 1.30 so. Accepting VC money.

981flacht6

Most of the bers don't really know what they're talking about. I've been invested in Nvidia since 2017, and researching their work since 2015 in their non-gaming work. I've been a customer of Nvidia since 2000. Bers get hyperfocused on short thesis opinions, amplifying the same claims without realizing how much of the market itself has changed over the past 5-10 years. We have far greater market participants, we have more developed countries, we have larger market access in it of itself. We have the correct tailwind alignment for this to all grow at a hyper-accelerated growth. Are there bubbles in here? Yeah sure, some places yes. I see it more in Private Equity / VC space with crazy valuations all over again that parallels with the tech bubble 10 years ago. Funny enough, you can google "Sam Altman" and "tech bubble" and find an article where he talks about bubbles 10 years ago, and you can read it for yourself and ask Grok/Perplexity/ChatGPT to steelman both sides and see what you see. But ask more questions and you might see what I see. I think, there is too much attention on hyperscalers, but there's so much to come with robotics, healthcare, sovereign AI etc.

gamjatang111

i just foresee more Mamdanis emerging. No way for younger generation to fight back, now they just yolo into sports betting and robinhood. Before they could yolo into Defi but now that space is all VC backed grifters

Ghould72

It reminds me of pre-2008. Back then, everyone was into trading - you’d get stock tips from random people. The market feels like a giant roulette game where everyone’s following the guy they think is on a hot streak. The problem is compounded by leverage stacked on top of leverage, and people have normalised this. Meanwhile, the debt locusts are running out of crops. VC is picked over, PE is picked over, real estate, etc. - now all that’s left is barren brown scrubland: subprime borrowers. Hardly enough to sustain them, but they’ll devour it anyway. Or perhaps it’s closer to 1929 than we’d like to admit?

Apprehensive_Two1528

A latecomer doesn’t void their VC status. it doesn’t mean it didn’t mature the investment.. what’s your entry time to do with softbank’s VC status?

AALen

Peter thiel is a fine VC but a horrible fund manager. He's lost so much money. Burry shorts everything. He's trying to relive his subprime glory days. He recently shut down Scion after finally realizing how out of sync he is with the markets. SoftBank sold NVDA to buy OpenAI, NVDA’s customer. 😂

fallingdowndizzyvr

Softbank wasn't a "VC" when it came to that Nvidia position. They didn't establish that position until 2020. They were a latecomer. I bought Nvidia in 2008. And I'm just a retail schmuck.

PTRBoyz

Anthropic looks like a great investment. OpenAI looks like VC bukkake. 

Reddit_Wombat

I think it's because there needs to be a trigger for the bubble to pop. At the end of the day, the bubble is far more than just inflated AI stocks; it's really more of a bet from big tech corporations, VC/PE, and AI startups that they/their investments can stay solvent long enough to become profitable (as others have said). This shouldn't be much of a problem for big tech (Google, Microsoft, Amazon, Meta, etc.) alone, but startups like OpenAI are making huge bets that they are forcing everyone to match. If OpenAI, Anthropic, etc. reach a point where they can't continue to raise money to fulfill their obligations, then the bubble pops - however, their investors are incentivised to keep the bubble from popping, so they keep investing. Kind of a chicken or the egg situation. This fascinates me, so I made a video about my take on it: [https://youtu.be/c2o0fUfsWWU?si=KmkyEIUdG8RsWxZC](https://youtu.be/c2o0fUfsWWU?si=KmkyEIUdG8RsWxZC)

Clear_Anything1232

Lol googl snapped its fingers And set timer on two of the largest VC funded startups And it's not even google IO Just an ancillary product to Gemini 3

johndsmits

I think a lot don't realize this. I didn't get that until recently having bought sponsorships in professional trade groups coupled with ego driven folks. And these young folks usually are some VC fellow which pays for these articlesm....Mind that most of the F500 are paid for too. Sham.

NormalAddition8943

lol removed by moderator? Did someone from a large firm contact their paid mod to yank the story, because this week wasn't meant to be a negative-news week to help shore up exit liquidity? --- For those that missed it: ### Peter Thiel dumps top AI stock, stirring bubble fears Peter Thiel dumps top AI stock, stirring bubble fears A quiet selloff raises fresh questions about AI’s surge. By Moz Farooque Edited by Celine Provini It comes at a surprising point when Wall Street’s been busy declaring the chipmaker as virtually untouchable. Although Nvidia recently surpassed a $5 trillion valuation, Thiel walked away completely, shrinking his fund’s equity book by roughly two-thirds while building it around three megacap names. That’s far from being a rebalance and more of an emphatic statement. Thiel had previously warned about AI’s hype cycle running far ahead of its real economics, and his Q3 portfolio shakeup aligns with that view. Peter Thiel co-founder of PayPal Inc addresses the Republican National Nominating Convention. Who is Peter Thiel? Peter Thiel isn’t like a tourist wandering through the tech world; in fact, he has been instrumental in building the modern version of it. He co-founded fintech giant PayPal, ran it as CEO, and took it public before becoming the first outside investor in Facebook. Later, he co-founded the most popular defense AI company in Palantir, where he remains chairman, while helping turn Founders Fund into perhaps Silicon Valley’s most influential VC shop, that’s backed businesses such as the likes of SpaceX and Airbnb. On the investing side of things, he runs his hedge fund, Thiel Macro LLC, which held nearly $74.4 million in long U.S. stocks as of Q3, which is down remarkably from $212 million in Q2. Moreover, his personal net worth is an eye-popping $16.3 billion as of 2025. Thiel’s Q3 filing unveiled perhaps the sharpest pivots of any major investor in the tech space so far this year. While Nvidia continues to power through blowout quarters and leap past a $5 trillion market cap, Thiel Macro LLC heads in the opposite direction. The fund didn’t just trim Nvidia, it eliminated it. Over 537,000 shares, which represent nearly 40% of the entire portfolio, just vanished from the 13F. Vistra Energy, another 19% chunk, was wiped out as well. What raises eyebrows even more is what Nvidia has been doing with quarterly sales surging from $39.3 billion to $46.7 billion, spearheaded by a 56% bump in data-center revenues, with analysts modeling a shot at $1 trillion in annual sales by 2030. Collectively, Thiel’s disclosed equity book dropped from nearly $212 million in Q2 to just $74.4 million in Q3, an almost two-thirds reduction. Moreover, the fund’s turnover hovered over 80%, leaving just three holdings: Tesla, Microsoft, and Apple. Tesla was pared back to just 65,000 shares, accounting for nearly 39% of the book. Meanwhile, Thiel’s fund invested in Microsoft and Apple, accounting for 34% and 27%, respectively, of the portfolio. Here are Peter Thiel’s Q3 13F portfolio moves: Sold Entire Positions ``` Nvidia (NVDA) Shares sold: 537,742 Prior weight: 40.07% of portfolio Result: Exited fully Vistra (VST) Shares sold: 208,747 Prior weight: 19.08% Result: Exited fully New Positions Added Apple (AAPL) Shares added: +79,181 Portfolio weight: 27.08% Estimated avg. price: $219.89 Microsoft (MSFT) Shares added: +49,000 Portfolio weight: 34.09% Estimated avg. price: $502.61 ``` With Thiel Corp hitting zero with Nvidia, a clear message stands out in a market that has been obsessed with anything AI. Nvidia’s fundamentals have been explosive, and Thiel has praised that dominance, hailing Nvidia as the clear hardware leader. On the other hand, he has warned that the AI hype cycle is getting out of hand, comparing the moment to 1999, when investors priced in a future that would take roughly 15-20 years to unfold. He’s not alone, either. Jeff Bezos described the massive AI boom as an “industrial bubble.” Goldman Sachs CEO David Solomon points to a 12- to 24-month drawdown. Similarly, legendary investor James Anderson called Nvidia’s $100 billion OpenAI financing idea “disconcerting.” Most recently, the Big Short’s Michael Burry has put massive put positions against Nvidia and Palantir. That’s why Thiel rotated into Microsoft and Apple, tech giants with more diversified revenue streams, cloud scale, devices, and software. Thiel feels AI is transformative but slow-burning, and the platforms, not the current pure-play chip rocket, offer economics that will actually last. --- Here's the 13F filing: https://13f.info/manager/0001562087-thiel-macro-llc

MagnesiumOvercast

The VC class souring on Facebook then didn't hurt them, Facebook's revenue then and now is about selling ads. The VC class souring on Nvidia is a huge deal because almost all of Nvidia's business is selling GPUs to companies controlled by the VC class. People here thinking that AI is bullshit doesn't matter, but if Larry Ellison, Jeff Bezos a critical mass of Silicon Valley execs ever come to that conclusion, Nvidia gets evaporated. Maybe Thiel has heterodox opinions on AI and the rest of his ilk will keep the boom going, who knows, but this is not a good sign for the industry.

Apprehensive_Two1528

VC money is gone after the initial high profit stage. It's callled maturing the investment 

upscaleHipster

Small emerging VC funds

Monkey_1505

You say things may be more profitable sooner than we think, and then use Chinese open source models as examples, which are specifically focused on efficiency, lower costs, and aren't swimming in VC capital.

PercentageGlobal6443

OpenAI failing to convert from non-profit to for profit meaning all their raised funds convert into debt. They can't do this because AI is not profitable, even their paying users cost them more than the subscriptions. The last infusion of cash they got was literally record breaking, and barring any legitimately miraculous advancement in technology, there isn't enough VC funding or government bailout to cover what they are going to need to stay operational. When OpenAI collapses it will tank Nvidia. When Nvidia goes it's so closely tied to all other Mag 8 they will tank in value as well. How low? Who knows? Things could change between now and then as well, but as of right now, that's how it's looking.

Clear_Anything1232

That's for their cloud customers and to power their own needs for enterprise solutions Open ai has been raising trillions for essentially ai slop videos burning VC money So these 2 aren't the same

Blarghnog

Six ways this usually happens: 1) Inheritance 2) Business founder exit 3) Lucky investor (scale equity ownership (think angel, VC, crypto very lucky early employee of a unicorn) 4) Lottery 5) Illicit gains 6) Lawsuit settlement beneficiary That’s almost everyone I’ve met with that kind of cash at that age.

Clear_Anything1232

Only if they don't run on VC money 😂

Hypeman747

Trial balloon or def a grift so VC and other investors can’t drop their bags . Clear out any institutions that want that type of guidance and just focus on institutions that will play ball and retail.

ptwonline

VC's are still run by people, and are not immune to getting caught up in hype and greed.

eerst

Literally the play book of big VC.

keener91

He changes his tune depending on the VC interest in buying or selling.

drummer820

It’s funny to me how every VC and tech founder is now saying “oh yeah, this is overinvested, people are gonna lose money… but MY company is different!”

thx1138inator

What about all the other AI firms that are raking in VC cash?

mcs5280

Most of these jobs are just posted to show VC funds that the company is expanding rapidly and convince them to invest 

deviousbrutus

The big VC players selling kills these companies. They can usually only sell once public if they want to make huge bucks, but I guarantee the OpenAI filing will not go well. There's a reason OpenAI and Anthropic are private. 

trymorecookies

Lots of money is being thrown at a loss business, so it seems to be a bubble unless profits show up. This could be the new NFTs, staying afloat as long as VC dudes still think it's cool.

Rxvi21

This is just a new way for VC's to use retail as exit liquidity

liketrefiddy

The way the money trail works is Consumer/business pay OpenAI, Anthropic, perplexity, cursor, etc, to use the AI programs directly or the API. However these private companies are selling these services at a steep loss. The private AI companies don't have their own infrastructure to service the compute to run AI, so they pay the hyperscalers/neoclouds with largely VC/PE money from equity financing instead of revenue. There's literally 1000s of these private AI companies building/training models and trying to sell them (in the US alone). I havnt heard/seen 1 of these companies being profitable on their stand alone revenue. The issue isn't with the hyperscalers per se...its the private AI companies with an unprofitable business model.

liketrefiddy

The Mag7 cloud growth is propped up by those unprofitable companies burning VC/PE cash on compute. If those private companies stay unprofitable then we will have a sharp correction in tech once they can no longer pay the hyperscalers. The depreciation expense of these data centers will heavily impact operating profits. This is the bear thesis and it does have merit/shouldn't be ignored. This is not to say that the mag7 are not extremely profitable already...but these co mpanies do have their own risks The mag7 generates most of its revenue/profits from: Advertising - META/Google - impacted by any slow down in the economy and also could be impacted by AI itself with generative search results (although that hasn't shown up so far) Retail - apple/AWS - Iphones and Amazon could be impacted by any slowdown in the consumer. Iphones have longer lifespans nowadays and tariffs are eating into margins Cloud - Amazon/google/microsoft - very profitable today. But GPUs have short depreciation schedules. If the money coming in from the private firms slows becuase they are going bankrupt from being unprofitable, then things will get ugly. Im not even going to talk about Tesla...

VanilaaGorila

What exactly is the difference? A portfolio is a portfolio. Only thing I don’t have access to is VC. 

Responsible-Meringue

The fundamental "innovation" is different right? Dotcom was all about new technology expanding consumer markets and driving that dollar out of their pocket.  Short term AI gains are all about business efficiency and reduction in labor cost (aka increase in productivity /s), with a medium to long term sprinkling of "this is revolutionary for every industry and we don't know how, so give us $ so we can figure that out". The second half feels like a half baked startup pitch. so expect businesses/industries that have little to gain on the first half to have a hit rate like an amateur VC fund!

LiamPhlegmsworth

So let me get this straight. The data centers are burning billions of dollars and can’t even get their shit set up to operate correctly? I could lose those VC’s money in a much more exciting way

JoJo_Embiid

yeah, but they make $100B in the ARM deal, kind of offset all the losers... wework is truly a trash gamble. normal VC will not lose so much on a single deal, they kind of put too much chips on the table and when he realized he might lose before the final card folding is already not an option due to the sunk cost.

MayorMcBussin

Ignore their projections. Unless they develop an entirely new business model they're just going to continue to eat VC cash until someone pulls the plug. I've been in the industry for almost 15 years and I've yet to see a quality opendoor home. They buy shit homes for slightly under market value, doing the bare minimum of fixing them up, try and resell them for insane values and will wait 200+ days trying to move them before they sell them at basically cost. My client just got a home of theirs under contract for $5,000 more than opendoor paid...nearly 300 days ago...after opendoor spent money on paint and repairs. I cannot figure out how this company makes any money whatsoever. I suspect it's from the fees they get when you sell your home to them.

goodpointbadpoint

After 5T, even if NVDA goes to become 6T that's just 20% growth, 8T is just 60% growth and 10T is just 100% growth. A VC like softtabank probably won't care that much about 20-100% return

MAPLESTORYBAGEL

Agreed but nuclear quantum etc etc are all garbage, it doesn't matter. I see the big players pushing for tokenization and that's what matters to me. The VC firms I talk to are all pushing for tokenization.

BarnacleHaunting6740

Well, on a more serious note SoftBank is a VC and VC follows its own set of rules. But that doesnt mean they dont trade like gamblers playing roulette.

FeelTheFish

Softbank burnt through 100B in record speed managing their own VC fund they are completely useless

unfathomably_big

That’s the entire VC business model. They know most begs will fail, but the one that doesn’t will do the opposite of big fail

Few-Frosting-4213

That's kind of how VC firms work...

BrianThompsonsNYCTri

Most VC firms are like that. SoftBank is one of the few publicly traded ones(well they are a lot more than just a VC firm) so there’s a lot more transparency in their moves. Most VC firms just try to hide the stupid shit they’ve invested in.

LiquefactionAction

> Apose to dot com where the fibres laid have been used for the past 50 years. There was actually a lot of "dark fiber" laid that went unused for years, sometimes decades, sometimes never. A lot of that was investor storytime or outright scamming the Federal Government promising "broadband" but secretly just pocketing it all and spending it on cell towers. But yes I, in broad strokes though not in all specifics, agree with this. I don't think it's any coincidence that also *all* the NFT and crypto grifters seamlessly & instantly transitioned into being "AI" VC grifter guys overnight. A lot of this capex is simply investor storytime to swoon over the rubes and while it won't be *the cause* of a recession unlike what you state, when there is one (if not already in the beginnings of one because I'm reliving very 2007 vibes again) it will definitely be a big wealth transfer at the end the time. All the tulip mania pyramid schemes will fall together like dominos

wampum

I bought a small amount of First Republic Bank and Silicone Valley bank after their share prices dropped 90%. I was (incorrectly) thinking the government would bail the banks out to save the VC depositors who had deposits in excess of the FDIC limits. My theory was that if these guys lost their excess deposits, we’d see a flight from small, regional banks into the behemoths, and it could trigger another round of bank failures. Instead they just arbitrarily applied FDIC coverage to people who had exceeded the limits and let the banks fail/be taken over… So I lost all money, but I kept the friends I made along the way.

efstajas

Gotcha, makes sense. I'm in a similar boat — I went long at 2x leverage on GOOG when it took a hit after ChatGPT released. I've been holding ever since and adding some more. It's been one of my most lucrative positions. I think the people that were dooming GOOG back then were very short-sighted. The way I see it, Google is positioned to win in any likely scenario at the moment: 1) There's a breakthrough leading to much cheaper and efficient AI while yielding similar or improved intelligence, and / or Open Source AI becomes increasingly competitive, making AI a commodity (imo most likely). This scenario has the potential to kill many smaller model forges, and even OAI unless they manage to pivot from monetizing model access to monetizing consumer products successfully. Google is primarily an AI *consumer*, given it has a broad portfolio of self-sustaining products that AI can enhance. If it becomes cheaper, Google wins. But other AI companies without a core business other than having a great proprietary model will suffer, as they'd suddenly need to price down their services and would be sitting on tons of outdated, partially obsolete assets. 2) There's no breakthrough in the near-mid-term, the AI industry fails to deliver on the hype, intelligence stagnates, and investor enthusiasm eventually dries up. In this scenario, again the VC-backed startups will eventually fail. Google will be one of the players in a position to continue offering AI services, which will then attract a lot of the B2B customers coming from other, failed businesses. And otherwise, things are back to normal — the fears of Search becoming obsolete are mitigated. 3) Scenario 2 happens first, but continued research from behemoths like Meta, Google, Microsoft, Alibaba etc. eventually leads to Scenario 1. Again, Google wins.

MaxDragonMan

If I recall, the opening scenes to HBO's *Silicon Valley* were exactly this: the gang at some random company's IPO party and it was all on VC funds and expensive as hell. Company goes bankrupt shortly later. Great show.

tomridesbikes

According to the sora cost on azure, you can use the sora app to burn $30 worth of VC money for free. 

bartread

Mate, you're going to have 20 years to complete GTA6 before GTA7 comes out. Seriously, I do know what you mean but it only took me 10 years to finally finish GTA4 from first play and 6 years for GTA5. I am, admittedly, on 15 years and counting for RDR1 (restarted again two or three months ago, and am part way through the Mexico act), and haven't even got to RDR2 yet, despite buying the damn game 5 years ago. I've also still yet to complete GTA3, and Vice City... and I haven't even started San Andreas. In my defence, my first plays of both 3 and VC weren't until 2018. You can do it, man: I believe in you.

omglemurs

Before I answer your question want to start with my assumptions. I don't think OpenAI has any path to justifying valuation and a narrowing path to profitability. Basically their premise is if they can reach AGI then it'll all work out, but also to get there they need more capital than is currently available in the VC world and then it'll likely only last them less than a year and by their own timelines won't get them to AGI. Sooner than later, VC money isn't going to be there and they'll need to IPO before the hype is gone (though it might already be too late). Going IPO means financial disclosures and all indications are that their books are not pretty which will likely scare away any serious investors. IPO is really the last card they can play before they need to figure out how to get profitable which should require them to make a more ROI based model and likely pretty much gut their research efforts. Getting to your question - you need to find a solution where perceived value is greater than cost and OpenAI has very non cost optimized models. What do they do have is a brand which has a cult like following. I think the only thing that they have demonstrated that likely has high perceived value that could safely outpace costs (assuming they dramatically scale back on non operational costs) is companionship. Layer ads on top of that and you have a potential sustainable profit center that is absolute rot for society.

luv2block

When I see corporations announcing preorders - "Walmart orders 5,000 Humanoid Robots from [insert company]" - then I'll know this stuff is real. Until then, it's a bunch of R&D labs working with unscrupulous marketing teams to generate VC funding.

Exact_Acanthaceae294

That money is all VC capital. At some point, the vultures will want their money back.

redlancer_1987

AI bubble like dotcom boom was back in the day. Individual companies with shit/no product will run out of VC funding and die, but the underlying technology, AI now and the Internet as a whole then, are going nowhere.

BlackSquirrel05

Pelosi's Husband, also had his VC before she married him, and got into office.

iwilldeletethisacct2

Her husband got lucky. Investing is his full time job as a VC and real estate guy.

iwilldeletethisacct2

Person married to a VC and Real Estate Investor, living in San Francisco, makes money by investing in tech stocks. No one could have predicted this.

Clear_Anything1232

I guess no one told the VC assholes that the party is over They are still doing 50x revenue valuation deals

Jackoberto01

Yes and although big tech is profitable, the user facing AI products of today are not. AI related B2B services, hardware, etc is making money but like you say it's round tripping. User facing AI products are being subsidized by other more profitable products, VC money and other outside investment.

googlemehard

It doesn't matter what happens to VC cash. It is expandable income for the most part. If anything it is good to see it enter the economy. What matters is the value of the shares once everyone starts to sell, but I doubt it will be a sudden fall with the dot-com boom. My biggest concern is definitely AGI taking every job. The only limit to AGI will be the energy cost needed to solve problems. If it takes a $100,000 in energy and equipment cost to complete one complex question without hallucinations then it is not as competitive with humans, but it will be faster, way faster. 

AccountOfMyAncestors

The only people I ever hear mentioning them, are VC investors that I suspect are trying to pump their bags

cknipe

During the dot com boom Cisco and Sun Microsystems made tons of money selling equipment to doomed VC-funded businesses. That didn't help them when their customers couldn't pay their bills anymore.

ketralnis

> Microsoft, Google, Nvidia, Meta [...] Google Maps, YouTube, Windows, Office, Android, Instagram etc Sure, they existed before the bubble and the products you're listing are pre-AI products. Nobody is worried about those products, except maybe Nvidia since while their product existed before, their volume and structure and valuation has tilted entirely towards the actual AI companies. What people are worried about are (1) OpenAI, Anthropic, Perplexity, and every VC cash awash AI startup that _doesn't_ have profitable products and (2) the portion of the valuation of the preexisting companies attributable to the AI bubble. I mean yeah, Kraft existed before the AI bubble and had products then. But if they started selling shitcoins in 2019 and their valuation tripled from blockchain hype, maybe that new 60% of their stock price is at risk when that bubble pops.

Sandvicheater

Anybody think GOOG is gonna dildo peg OpenAI the moment they IPO during the AI wars? GOOG got both the AI software and Quantum hardware which is the perfect 1-2 hit combo when it comes to AI. OpenAI doesn't even have a in house quantum solution yet and what I understand is just buying couple of VC quantum companies to cobble together their own Quantum.

Degen55555

> there is a bubble There is definitely a bubble forming but not on a scale of 2000 dotcom where we had thousands of "publicly" traded companies like eToys. All of these tiny startup AI companies aren't listed or being traded. This is a very controlled bubble with most of the investment on just a handful of godlike companies (NVDA, GOOG, etc). People wanting 2000 dotcom style crash and that ain't happening anytime soon. If the VC funding dried up, the market will correct but no where will be on the same scale as 2000 or 2009. It will probably be a very minimal 25-30% at the most for S&P500.

PeachRobbler

VC money absolutely does run dry when interest rates are high 😂😂 Genuine question.. how many startups have you worked with that are seeking VC funding rounds? I can tell you from experience that it is not a cake walk and has not been for well over 4-5yrs

deathdealer351

Death, taxes, USA always has bomb money no matter who is in office, VC money never runs dry.. Now vc money does shift was not long ago people were getting millions to build block chain bullshit, then social gig work bullshit, now AI bullshit.. It will shift to the next thing eventually. 

Nice-Jump7032

They might say those suckers failed, we are different and we will succeed. But VC will recognize it first. then less seed money, then more companies belly up...