VC

ToughCurrent8487

Aren’t they putting unrealized gains on their books? I think at some point I saw part of their earnings included like 10 billion in unrealized gains. Correct me if I’m wrong. I don’t think the VC aspect of the company is a good thing. The minute those gains tank their earnings miss.

king2ndthe3rd

Nvda only has 200b in assets. 100b of that is in its VC fund. Thats half of all its assets. Market cap is a notional number.

LongLonMan

All tech companies have a VC like investment arm, this is not news at all…, it’s also not a moat, do you even know what the definition is…

KayVerbruggen

No this post is misleading folks. OP comes in claiming we can forget the chips and should look at the VC aspect of Nvidia. Meanwhile if you actually where to buy $1000 of stock, only $20 of that is this VC. The other 980 dollars are the chips

king2ndthe3rd

The point is that 100b in investments is VERY sizeable to the largest company in the world, because market cap is just a notional number at the end of the day. Not cash. You have a certain amount of cash to use, and you can't use you're market cap the same way. NVDA only has 200b in assets. Total assets, current and non current. NVDA is using half of their assets towards being a VC fund. Thats significant. So, you saying its only 2% of their market cap is true, but extremely misleading to folks who don't understand accounting.

KayVerbruggen

The reason they are not the same is because people value the operations at the remaining 5.4T, and then 0.1T is their investments. If NVidia did not produce chips and would only be this VC fund, their market cap would be some right around this 100B. My point is that almost all of Nvidia's value comes from chips, not investments

KayVerbruggen

99B is nothing on their market cap. Of course people treat it like a chip stock. You are telling me that 2% of the total market cap comes from equity investments and therefore its now a VC fund?

I_have_to_go

This is empire building and unless the IRR is extraordinarily high (which is not obvious) they would do better to return cash and let shareholders invest in VC if they wish to.

jcpopm

Okay but I bought it because I wanted the chips. I don't want to invest in a VC fund, especially one that is doing circular financing with companies that hemorrhage monry.

Crafty_Substance_954

I don’t personally think that these athleisure brands which are heavily trend-based and cyclical in nature are declining a bit from post-pandemic highs in the face of constant new competitors backed by VC and marketed via social media. To me it’s like, yeah there’s more choice, but consumers are still spending a fuckton on the segment so what goes around will eventually come around and everyone will be happy unless one of these big players are horrifically mismanaged and disappear overnight.

RacerP1

As a VC, I say take my money

I_like_code

This is a substantial post. The author’s core argument is that **AI companies can be producing very real earnings while the overall AI investment cycle can still become bubble-like**, because a large portion of today’s revenue is ultimately being financed by continued capital investment rather than mature end-user demand. The financing-flow argument is the most interesting part. Hyperscalers, AI labs, VCs, and other investors pour capital into AI infrastructure; that money then becomes genuine revenue for companies such as NVIDIA, data-center operators, power-equipment suppliers, and construction firms. So NVDA can report completely legitimate, enormous revenue and profits even if the ultimate economic return on all those GPUs and data centers eventually disappoints. The author therefore isn’t really arguing **“AI is fake.”** Quite the opposite. They acknowledge the technology has obvious utility and that today’s major AI beneficiaries are fundamentally much stronger businesses than dot-com-era speculative companies. Their concern is that expectations and investment spending could outrun the eventual cash generated by customers using AI. For your own AI thesis, I’d pay particular attention to three things the post identifies: **hyperscaler capex, inference/end-user monetization, and free cash flow.** The bearish scenario isn’t necessarily “AI stops growing.” It could simply be: **AI usage grows rapidly → infrastructure gets overbuilt → compute becomes cheaper → hyperscaler returns fall → capex growth slows → suppliers lose pricing power/growth multiples.** That’s a much more credible risk to NVDA and the broader AI infrastructure trade than “AI turns out to be useless.” The author also correctly points out that Google, Meta and others have effectively said the risk of **underbuilding is currently worse than overbuilding**, which naturally creates the possibility of eventual excess capacity. Where I’d push back is the author’s claim that **75%+ of the ecosystem’s money ultimately comes from investors**. They explicitly describe that as a rough ChatGPT-generated estimate. That’s far too uncertain to serve as the quantitative foundation for the argument. Hyperscaler capex also isn’t equivalent to speculative VC financing: Microsoft, Google, Amazon and Meta have enormous operating cash flows and existing cloud businesses that monetize infrastructure across many workloads. Their proposed exit strategy is also much weaker than their diagnosis. They plan to stay invested, watch for an obvious peak followed by a significant decline and failed rallies, and then progressively reallocate based partly on their judgment of whether the bubble has popped. That’s essentially **market timing after the fact**, and identifying a bear-market rally in real time is notoriously difficult. So I’d rate the post as **thought-provoking and directionally useful, but considerably more speculative than its detailed presentation makes it appear**. The financing-flow concept is worth incorporating into how we monitor your AI exposure, but I wouldn’t use the author’s bubble dashboard as a sell signal by itself. In fact, for your NVDA/SCHG/AI-infrastructure thesis, I’d simplify the monitoring considerably: watch **hyperscaler capex guidance → GPU/data-center utilization → inference revenue growth → AI pricing → hyperscaler FCF → NVDA backlog/margins**. If capex keeps climbing *while* inference/customer monetization catches up, the author’s central concern gets progressively weaker. If capex keeps exploding while monetization stalls, it gets much stronger. That distinction is probably the single most useful takeaway from the entire post.

appearstobeidiot

Ya because each of them is worth a few 100 mil. So who cares about grinding it off. Call that VC team and tell them they have a new limited partner from Monday

Independent-Cress382

Chamath was the VC guy who created a bunch of SPACs, they all failed except Sofi (Opendoor, Virgin Galatic, Clover Health, ProKidney).

Smooth-Ad8030

No it’s not, if you had totaled up their ARR, it should have been higher lifetime revenues. That directly indicates ARR was inflated. ARR is not a codified metric, it can be done a couple different ways. They have incentive to make it look 10-20% high than what it actually is, which is what the filing says. It’s also not illegal to inflate ARR for leaks meant for the press. VC’s in SF aren’t brilliant and unable to be fooled. Look at wework, andreeson with his web3 bs, etc. These guys can be tricked. I said revenues are real, but ARR isn’t their exact revenue. It’s leaks from a time period we’re not privy to.

greenpride32

It is true an angel investor and early stage VC is most likely going to exit before a company becomes profitable. But they need to be able to sell the asset for more money than they paid, which means they need to growth. And they want to largest margin possible. That's why infinite sums of money flow to the likes of OpenAI, Anthropic, Stripe, Anduril, Databricks - companies with legimate runways - and not to NoGrowth Inc or NoRevenue Corp.

Vast_Dare8583

Yes, I can. They are outlined on each of the respective companies sites as well and endorsed by some of the biggest companies in the world and some pretty big VC's. But, I'm more interested in the opinions of other investors that are in the space and have done their Due Diligence.

ZedSwift

You understand the entire reason for the existence of VC and PE firms is to inflate asset prices to sell at a higher price later? They don’t give a fuck about long term profitability.

greenpride32

Timing of deposition puts Anthropic ARR at $9b, so it's in line with numbers you quoted. While Anthropic is not publicly traded, you do realize they need to open their books to private investors and in many cases provide quarterly updates? They have no benefit of "inflating" ARR by hundreds of percent, in fact the effect would be quite opposite and it would be illegal. So why then would VC and PE firms, along with institutional investors spend $65b worth at $965b valuation in Series H capital raise if there isn't some substance behnd it?

Yakydo

PE VC often looses everything, this time they may get a bit although rather late

Yakydo

PE VC often looses everything, this time they may get a bit although rather late

apfejes

Hah - I'm one of those founders, going head to head with all of the AI companies trying to solve drug design issues with LLMs. Let me tell you, it's not easy to be the company that's bet it all against AI. That is despite the fact that we've now got a product, we're just beginning commercialization, and are clearly outperforming the competition on every front... and yet investors are INCREDIBLY hesitant about putting money behind what we're doing. So, to answer your question: It's HARD AF to swim upstream all the time. It's hard to have a solid conviction on an idea that runs against what everyone else is doing. It's hard to actually be right in that conviction, and then it's hard to demonstrate that you're right. It takes resources and a lot of industry buy in, which is hard to get when you're on a shoestring budget. Even when you've done all of that, investors still aren't lining up to stand behind you. We have a lot of great angel investors, so far, but now I need VC money... where do you think they're putting their money? Do I blame other founders for following where the money is? Hell no. They may be wrong, but they're not fighting the uphill battle that I'm fighting. As I tell my team, we're playing this game on hard mode.

Any-Ask-4190

My father has one, he's got access to VC and PE products that have come with remarkable tax benefits, has helped set up trusts and so on. Can he pick stocks to beat the market? Probably not, but that's not really what he's for.

livingbyvow2

They will still book the uplift which will flow to their net income. Don't think they will divest immediately although the Information mention the IPO could include some secondary... Unless it's for their VC friends, it could make sense if Google and Amazon can take some chips off the table to throw them at more gigawatts.

wefarrell

He was a VC so he knows a thing or two about couches. 

thetimmyturnip

From ceo "Yeah. I would say, relative to management's long-term view of the company, I think it's a mistake. I'm incredibly excited about where we're going with the company. What I'd say is, I think this is something we should talk about, we want to just talk about directly. The question that comes to mind is, did they know something I don't know, right? The answer definitively is no, that this is really just a natural function of the capital cycles that are associated with these businesses. We have been blessed to have early investors that stuck with us and have been with us for the 9+ years that the company has been around. In the VC world, those funds, the way they work is they take capital from a limited partner, and they have a time horizon that they ultimately have to return that capital to the partner. What we're seeing is those early funds cycle through and cycle out. The unfortunate thing for us is that because we went public through a SPAC, there's this SEC technicality which complicates the transfer of those shares. Effectively, to return the capital, they're having to sell the shares in the market. For us, this is a normal part of the capital cycle. It's not anything indicative of the state of the business. It's really just a testament to the patience they've had with us, and the progress we've made in the company. We're incredibly thankful for the companies who've supported us and been investing with us. The other thing that we've seen out is Uber moving out of their position in Aurora. Again, this is both a natural thing and I think a good thing. Uber is not a holding company, right? They're not Berkshire Hathaway. They're not owning companies just to see the appreciation of the value. They're actually trying to put that capital to work to build their business. The management team at Uber has been transparent about needing to take the investment they made in Aurora, and use that capital to fund their somewhat fragmented approach to ensuring there is AV robotaxi players out in the market. Robotaxi is just not our business today. Again, this is a natural thing. As a shareholder of the company, a significant shareholder of the company, I'm actually quite excited to see capital that's not going to be here for the long term rotate out and get replaced with folks who are going to be holding shares. We have this incredible investor base. It's just proud to have the folks that are with us along for the ride, and excited to see that stage of capital investment be able to ride along as we continue to execute and hopefully see a lot of value creation here."

NappyDougOut

It's a bunch of rich ppl that bought into the snake oil, and others that were led to believe it was really a "game changer", but in reality, it's a huge database driven app that's hitting brick walls on resources, profit, legal issues, & capability. Now that billionaires are way over leveraged into Ai, from layoffs to shares in it, because they got away with Social apps, NFTs, and crypto mythology prior. Every major tech innovation since the .com boom has fallen off quality wise soon after launch, if you truly know g watch tech, because it quickly becomes a carcass for meat vultures. Billionaires RN are not liquid beyond selling off and becoming millionaires, so they're frantically struggling to keep the tech myth & market hustle working, so they're pumping the markets up with a rumor mill of engineered fables about Ai tech, especially on prime news channels... The markets take a nose dive every other week now, just to cement the opinion, after cliff jumps, markets bounce back higher without any logical explanation, while world-wide GDP, industries, and jobs are all in deadly decline as evidence. BTS the tech is stumbling hard, and small investors are trying to time the rug pull jump off on credit. It's Enron, Madoff, & the Titanic all at the same time. Just my OP, but we've seen it all before in smaller ways... We really need to shed the tech scam (Gig) economy & do a reset to save the entire game... These pump & dump cycles combined with VC vampirism are destroying everything good, worldwide. 🫤

Aint_EZ_bein_AZ

So you are absolutely an AI bear so your bias as hell and this comment is exactly the parroting I was talking about. You should get out of this hivemind and actually talk to normal non-redditors in the real world. OpenAI has real fortune 500 customers. They use real money for compute. Not just VC dollars. Microsofts cloud growth isnt solely because of openAI either. They have thousands of enterprise clients that use gethub copilot and 365 copilot. Thats real saas rev directly from corportate budgets. As far as nvda, you truly lack an understanding of the company. 2 trillion dollar customer base. Meta alone buys tens of thousands of gpus for their highly profitable advertising business. Nothing to do with “round tripping” or VC funding. To cry about lack of profitability during the initial build out phase is silly. Imagine how much money the internet fiber buildout cost back in the early internet era. Capex is an investment. Amazon took 10 years for profitability. It’s just getting started dude. It is a gamble but its wayy to early to say they are throwing money away The fact you think the SEC would let a company like Microsoft get away with your “example” is so naive.

thetimmyturnip

From OP: I put this in the long post before I cut it down because so many people were shitting on the length. Uber is involved in this business as a logistics manager with Uber Freight. It makes sense for it to invest in some companies in the sector to help them get off the ground but it's not an investment company that intends to long-term hold shares of other companies to make an investment return. Here's your answer directly from the CEO. This is a word for word quote from the retail investor town hall. "Yeah. I would say, relative to management's long-term view of the company, I think it's a mistake. I'm incredibly excited about where we're going with the company. What I'd say is, I think this is something we should talk about, we want to just talk about directly. The question that comes to mind is, did they know something I don't know, right? The answer definitively is no, that this is really just a natural function of the capital cycles that are associated with these businesses. We have been blessed to have early investors that stuck with us and have been with us for the 9+ years that the company has been around. In the VC world, those funds, the way they work is they take capital from a limited partner, and they have a time horizon that they ultimately have to return that capital to the partner. What we're seeing is those early funds cycle through and cycle out. The unfortunate thing for us is that because we went public through a SPAC, there's this SEC technicality which complicates the transfer of those shares. Effectively, to return the capital, they're having to sell the shares in the market. For us, this is a normal part of the capital cycle. It's not anything indicative of the state of the business. It's really just a testament to the patience they've had with us, and the progress we've made in the company. We're incredibly thankful for the companies who've supported us and been investing with us. The other thing that we've seen out is Uber moving out of their position in Aurora. Again, this is both a natural thing and I think a good thing. Uber is not a holding company, right? They're not Berkshire Hathaway. They're not owning companies just to see the appreciation of the value. They're actually trying to put that capital to work to build their business. The management team at Uber has been transparent about needing to take the investment they made in Aurora, and use that capital to fund their somewhat fragmented approach to ensuring there is AV robotaxi players out in the market. Robotaxi is just not our business today. Again, this is a natural thing. As a shareholder of the company, a significant shareholder of the company, I'm actually quite excited to see capital that's not going to be here for the long term rotate out and get replaced with folks who are going to be holding shares. We have this incredible investor base. It's just proud to have the folks that are with us along for the ride, and excited to see that stage of capital investment be able to ride along as we continue to execute and hopefully see a lot of value creation here."

vandalizethethief

Hey man, just go look at this website. I would never share this filth unless it was surprise. owned by SoFi who is like an abusive bank. First, it’s “check out my high interest saving account”. Then it was don’t you want to pay me $120 a year for access to that interest? What, hell no. Then you offer me 1% match on taxable accounts now it’s 2% percent but it’s given up front so they have horrible clawbacks. I had no idea and deposited $10k to buy automates, mainly CAIE and CAGE plus a little bit of long term bonds that I figure if they go tits up then I will be worried about looters not my portfolio. Don’t sign up for anything just look at what AI trading is good at it and all great traders are good at it because it works quickly but this is more established strategies you can copy and adapt. Basically, you want money or to be famous on some The drawdowns suck though but stick to the tried and true quant models https://www.composer.trade I also called out Hyperliquid and PURR months ago and mentioned them by name in a NASDAQ goes to 23/7 or whatever. It got an insane amount of upvotes but I said “because of Hyperliquid”. Now look at these bums over at the CME, CBOE and NASDAQ. Scared shitless of perps. Faster, less fees, better design and now they can’t have their fees because as a token holder you basically get 99% of Hyperliquid’s revenue of fees through 24/7 buybacks. We profit, they profit and it’s the most share/token holder company I’ve come across in a while. That is their selling point. No VC money, 11 guys, all geniuses at HFT and MM at Citadel just bootstrapped. It blew up overnight and then rode the crypto Trump boom but set itself apart when it took over oil trading with crude and Brent futures built into a perp, 24/7. No one wants to get fucked by Trump on a Friday. Turns out you don’t have to & quickly oil futures opened at Huperliquids perp pricing for Brent and crude. They did a great job on trading the pre-IPO of CXMT (biggest Chinese DRAM company) within a few percent which is much more accurate. Sigh….too much BTC ETH SOL HYPE trading, not enough sleep hence all the “caffeine” and rambling

Avid_Reader87

2k comes out next week, so the VC will be flowing.

Left-Contest315

Did Nike get purchased by Venture Capitalist? Is the whole goal of the VC to capitalize on the market credibility the brand has created while gutting all functional parts of the company to slowly siphon any value/cash to the VC and their investors?… if not, not quite the same story

Due-Perspective-3197

I put this in the long post before I cut it down because so many people were shitting on the length. Uber is involved in this business as a logistics manager with Uber Freight. It makes sense for it to invest in some companies in the sector to help them get off the ground but it's not an investment company that intends to long-term hold shares of other companies to make an investment return. Here's your answer directly from the CEO. This is a word for word quote from the retail investor town hall. **"Yeah. I would say, relative to management's long-term view of the company, I think it's a mistake. I'm incredibly excited about where we're going with the company. What I'd say is, I think this is something we should talk about, we want to just talk about directly. The question that comes to mind is, did they know something I don't know, right? The answer definitively is no, that this is really just a natural function of the capital cycles that are associated with these businesses. We have been blessed to have early investors that stuck with us and have been with us for the 9+ years that the company has been around.** **In the VC world, those funds, the way they work is they take capital from a limited partner, and they have a time horizon that they ultimately have to return that capital to the partner. What we're seeing is those early funds cycle through and cycle out. The unfortunate thing for us is that because we went public through a SPAC, there's this SEC technicality which complicates the transfer of those shares. Effectively, to return the capital, they're having to sell the shares in the market. For us, this is a normal part of the capital cycle. It's not anything indicative of the state of the business. It's really just a testament to the patience they've had with us, and the progress we've made in the company. We're incredibly thankful for the companies who've supported us and been investing with us.** **The other thing that we've seen out is Uber moving out of their position in Aurora. Again, this is both a natural thing and I think a good thing. Uber is not a holding company, right? They're not Berkshire Hathaway. They're not owning companies just to see the appreciation of the value. They're actually trying to put that capital to work to build their business. The management team at Uber has been transparent about needing to take the investment they made in Aurora, and use that capital to fund their somewhat fragmented approach to ensuring there is AV robotaxi players out in the market. Robotaxi is just not our business today. Again, this is a natural thing.** **As a shareholder of the company, a significant shareholder of the company, I'm actually quite excited to see capital that's not going to be here for the long term rotate out and get replaced with folks who are going to be holding shares. We have this incredible investor base. It's just proud to have the folks that are with us along for the ride, and excited to see that stage of capital investment be able to ride along as we continue to execute and hopefully see a lot of value creation here."**

Dull-Bell5413

Because they aren't a VC, they are an operating business that would be better off deploying capital to grow their own operations. AUR CEO was asked this just the other day, and I'm summarizing.

Master-Elevator1578

70% of the compute revenue is coming from Anthropic and OpenAI. Both those companies are fully propped up by VC money and investment from customers and supplier companies like Google, Oracle, and SB. Companies that used the frontier LLMs when they were free or cheap dramatically cut back when they started getting charged more. They also realized around that time the results from the LLMs were underwhelming. Useful tool when free or cheap, but not worth what they actually cost in a non-subsidized paradigm. The bottom line is that there isn’t a real market to support this spend.

emperor_dinglenads

I need to speak to a VC. Sex bot rental. We'll call it BOTSTITUTES.

cool-lala

I dont agree man how many people ever know how to install an open model and lest use it yah its free but its some work man claude code or openclaw will not do that for you at least now unless you have made something for your terminal and let it hijack access to your machine while you speak from the sauna and write code verbally. That being said your softbank and oracle concern is true both these are too big to fail Meta found out that closed source was way to doom that is why they poped the new model fully open but catch is deepseek and kimi and qwen own a ton of share in open markets I would not be surprised if Grok came out with some random open model now they have cursor and stuff but right now token cost is mad you dont even need to burn so many token just to fix a broken api or markdown file. This will end bad but question for a trillion bucks is when and I guess it will will perfect storm of bond market run up and then AI bubble and then private equity and VC squeeze all at the same time. No I am not Dr. Burry.

ilsewizard

So we missed the VC boat. Taking this line of thinking into its progressive next step: what are these skinnier women with sexy undies going to want next? Yoga pants? Beach vacations? Makeup? Hair products? How can i profit from this trend?

Linett-Chukwuemeka61

Angel networks and accredited investor groups are your best bet, though honestly the VC route exists because traditional investors want someone else doing the vetting. If you're bootstrapping instead, that's a different game entirely.

Vast_Cricket

Need to go after bigger fish like Trump. His business filed bankruptcy 9 times before. But he is in the office. It is not Nancy is trading. Her husband Paul is a VC investor. He is doing his job with wealth shared. In fact Paul has his CFP not doing any of the work himself.

starry_eyes188

Have you seen the GPU backed securities that are set to launch? Seems similar to a mortgage backed security except the underlying asset depreciates. Also most of AI funds seems locked in the private sector like VC funds and other private investors. The public AI companies like NVIDIA have businesses that is necessary for AI no matter which frontier model or other AI overlays survive. So I don’t think the bubble really exists in the retail sense like dotcom.

ladal1

Lol, I'm actually in the industry, most are betting only because they can see soon enough when the first datacenter folds and make money off stupid money coming from VC and private credit in the mean time. Everyone in the industry has motivation to keep this running, most of us just know it's going to fall - datacenter demand is basically non-existent from anyone who pays their own bills, tons of GPUs (which are supposed to be in high demand) are warehoused and while LLMs are useful, people who need top rate models are in the hundreds, for all other people either smaller (running on a single cluester) or actually small (running on a single accelerator/Mac) model is equivalent to running top rate model.

chef_beard

My money is on Anthropic, Salesforce VC has $5 billion invested so they're already bedfellows

Agitated_Trash203

To be fair those bank failures were an isolated incident and would have remained as such even if the fed didn’t step in and uncap the deposit insurance limit. Those banks (and SVB specifically) had such huge coffers with the “everything rally” of 2020-2021 they put way too money into fixed interest investments like treasuries or MBS. Rates got hiked because inflation become a runaway train which meant they were sitting on huge unrealized losses as the value of those treasuries and MBS plummeted. Rate hikes were probably the contributing factor that caused the bear market in 2022, which caused funding to dry up so all the startups (of which was the vast majority of their clients, also very risky) ran to their deposits in the bank to fund operations but they were sitting on these huge unrealized losses and they couldn’t pay out. This wasn’t happening to big banks, it was isolated to that very specific type of bank who primarily had VC’s and start-ups as their clients.

1098duc_w_the_termi

One of my VC buddies told me last week that the music has stopped on the upper decks, the lower decks just haven’t notified yet. Take that as you will.

237throw

Kids. Make sure to get at least 5 or 6 so that way you get a diversified portfolio. Act as a VC for their development by approving cash injections so that they can get to market with a positive cash flow. Way more comfortable than most nursing homes if you do it right.

kerplunktard

they are mostly private equity & VC style investments - there are a few public company's like [Trip.com](http://Trip.com) Group (worth approx $2bn), they have a ton of investments in small up & coming businesses StarFive, vcore, Zhiran Medical etc,

Soggy_Station

I’m a full-time VC investor and spend a lot of time investing my PA. Have significantly outperformed the S&P picking individual stocks for several years. Few things I’ve learned: **Know what you own.** Know the company super well and have a clear thesis for why it should outperform. Read earnings, study the business model, competition, moats, etc. If that sounds tedious and boring, just stick to buying an index. **Price ≠ value.** Most important one. Great company can be a bad investment at the wrong price. Okay company can be a great investment at the right price. The number one technical thing to master (valuation multiples, DCF, intrinsic value) **Psychology matters a ton.** Hold when the stock is down but the thesis hasn’t changed. Sell when valuation gets stupid, even if you love the company. **Be patient.** The stock market transfers money from the impatient to the patient. You can do all the above well but if you think you’re gonna 10x tomorrow, that is not investing, that is gambling. The best outcomes come from having a genuinely long timeline for ideas to play out.

vandalizethethief

There are no middlemen. That’s the whole point and why the fees are so low. Everything is transparent, no VC money and the 11 founders were MM for Citadel and HFT traders. If it is a scam they did everything possible to tie their success to the same HYPE coin you can buy. That’s where 99% of fees go. I’ve never even seen any corporation this transparent. They also have a treasury asset trading on NASDAQ under PURR that is in the Russell 2000. Everyone has access to the API & I’d worry about external threats more than anything internal.

greytoc

Try a private placement broker - or places like EquityZen, Hiive, ForgeGlobal. If you don't want to use a broker - I used my business connections to find a VC to buy some private shares that I owned. Make sure you understand the terms of the share agreement.

New-Association5536

Pretending they are when they haven't released any nuanced financial statements or data is insane. Anthropic is reporting profit from 2 months that Elon Musk gave them discounts on their compute costs; these companies have also been shown to use financial shenanigans to hide actual costs to make it appear they are profitable. Lastly, lets say best case scenario, they are profitable. The margin of profit compared to the now close to 2 trillion in total investment between the VC funding and needed datacenter build out is miniscule and doesn't come close to the ROI needed to justify this. I don't really trust a business leader that says, and I quote Larry Page, "I'm willing to go bankrupt rather than lose this race." That isn't a business decision, that is fanatical thinking based on beliefs more tan sound financial long term outcomes.

Avid_Reader87

We just have to pivot to space and drones and underwater mining before it falls. And robots and laser computers or whatever else the VC’s are pitching. Then all the AI companies can borrow against their shares to invest in those. The government won’t let them fail.

TastyToad

Revolutionary idea but instead asking here you should slap some AI on top and go straight to VC for funding. Thank me later.

dgellow

You’re wrong, Hacking_the_gibson is correct, revenue run rate is a completely meaningless and unreliable metric you use to make your business look more successful than it is. It doesn’t reflect real revenue. Any remotely decent VC hearing your ARR should follow up by asking you to stop bullshitting and share you’re actual revenue 

Plus-Professional-84

Harvard has a bunch of sectorial VC funds. They financed SpaceX over a decade ago and provided scientific consulting.

Lower-Letterhead206

The class A shares are distributed avond different groups of investors. My thesis is that roughly 10 million shares will be sold by VC's and other investment firms. They'll go for the quick win and have been investing in the SPAC making $26 a 160% return on their investment. The majority of the investors will be here for the long run or at least untill BRUN 10x's. The earnings where great, the sector is one of the fastest growing and BRUN hasn't hit any form of ceiling yet. I don't see a reason why the majority would sell. In my next post I'll try to dig deeper in the share distribution and what eyes is a likely scenario.

Wowmuchrya

Yes, anthropic is not doing anything that will not be commoditized in 5 years. There is a reason anthropic is delaying releasing its s1 and ipoing. The business is fundamentally unprofitable. If you gave me a 1t loan I could easily turn that into 40-50b, which is what they are claiming their ARR is currently at (or 80b recently). I’m not moving the goal post, don’t get triggered from something you said yourself. A company that hasn’t even existed to the majority of the public for 5 years is claiming it can compete at a level of companies that have existed for decades. The only way anthropic or openai bring in 200b annually is if VC funds or your 401k gives them a 10t loan or subsidy annually.

AVBforPrez

Stock based comp is explicitly not included at the very least, and cost deferrals are common even in established companies. Given how shady they have been so far, it's impossible to trust that they're not trying to hide as much as possible to show better looking numbers as they try to do an IPO. The problem with their revenue is that it's largely fueled by circular deals from chip makers and other companies in the AI sector, who themselves are using money they're reporting as revenue from the exact same type of deals. AI in its current form has a genuine paid user acquisition problem, and a usage cost problem that nobody really cares about yet because it's running on VC and future money with the hope they'll figure out how to make that work eventually. Normally this is the playbook for new tech or software, but the footprint on all this makes it anything but playbook stuff. Even though I'm not a huge Apple fan, it's quite interesting that they're sitting this entire thing out.

Particular-Nose-8932

Tiger Global (VC) cut its stake in the company causing people to panic sell

Prestigious_Rod6969

ha ha, rolex and what else lol VC is a $29k watch ;)

IceNineFireTen

Fidelity has a VC arm that backed SpaceX early on alongside Google. No surprises here. What makes you think they purchased more? This just shows current holds, not change in holdings.

nekocoin

Yeah, public BDCs exist, but do any of them hold VC-vetted early stage startups? That's the part that's new

nekocoin

RVII holds a significant position (probably around 10%) in 80 young YC startups. In 5 or 10 years most will probably be dead, but if even one IPOs for billions the fund would be up by a lot Historically about 5% of YC startups go above a $1b valuation, so expected value is very profitable Cons: - High-risk, could go to zero - Not for the impatient, could take years to see anything out of it - High fees - Robinhood takes 20% of the profits Personality I bought a bit because I've been wanting to invest in VC-vetted young startups for years but never had the money or connections needed

Ok_Phase2472

I've dabbled in real estate, and let me tell you it is absolute shit. Fees are high and returns suck, it is a terrible investment. You're better off with buying treasuries, which will give you a similar return to real estate after fees, with much less risk. Plus S&P 500 and Russel 3000 both have plenty of real estate exposure anyway. I would just stick with VT to diversify globally. If you are an accredited investor you might also consider putting a small percentage of your portfolio in PE or pre-IPO VC funds.

FartPolluter

I like you kid. You got spunk, and the country needs more spunk. *How I imagine what every one of Leopold's VC clients sound like*

Momoware

I know someone who works at one of the portfolio companies. Yes the fund invests in them (and there's an actual person from Robinhood that owns this just like other VC).

HairlessBandicoot

Fr. I work in finance, on the private side, and men are always quite happy to tell you that they make money, less so when they lose it. At the age of 25, I'd already come across a major VC fraud in the region, a bond investment that went bankrupt, and a multi billion dollar actual scam, and identified both within minutes of hearing about them. I asked those much older dudes questions that they couldn't answer, and those very questions were the undoing of those investments years later

chaotic910

The AI market doesn’t align that much with what actually happened during dotcom. The issue with dotcom was that literally anyone with a half baked idea and an inkling of building a website could get millions in VC money. That hasn’t happened to nearly the same degree as AI, it’s fairly consolidated considering even off-shoot or doomed to fail companies use the API of a large model. The large corporations that fund these AI companies will continue to do so. Sure, they aren’t commercially profitable, but some FAANG or FAANG-adjacent company will want the models to be available in perpetuity. We’re more likely to see a large market shift, and that’s only if someone develops a major breakthrough and isn’t absorbed by a larger corp.

greytoc

It's a bit more complicated than that. These types of investments can have their place. But they aren't really suitable for a lot of retail investors. The actual expenses aren't necessarily out of line with private VC funds. But I don't believe that angel investing can be done with a spray and pray type approach. It's unclear to me how this BDC has constructed their portfolio. The prospectus indicates that it's simply a even allocation across a lot of companies. Price discovery based on the underlying illiquid assets is going to be next to impossible and mostly speculative. So it seems like the NAV could be fictional based on however the BDC management decides to mark the assets. And the use of leverage in this BDC seems unusual to me since traditional VC and angel funds don't typically use leverage afaik. I only know enough to know that I don't know enough about angel fund portfolio construction that this particular investment seems ill conceived.

bls2515

VC delusion of saving the world

btrev650

That's why "cognitive surrender" is a good term. You're not just cutting corners or being efficient or whatever. You are literally surrendering your cognitive ability. You are deciding to be a consumer of, and dependent on, this technology, instead of being an originator of thought that the tech will perpetually court you for so as to appropriate it. When the VC money dries up will you have grabbed a bunch of shit that you can continue to build upon? Or will you be stranded with no ability to do basic research and writing

Wolf_Of_DalalStreet2

AI is nothing but a loss making startup funded by VC on a bigger scale u know what happens when the debts has to be settled

Pimpwerx

They can and will monetize. The issue is if monetization is practical with US energy costs. The cost for compute in America will be what wins the race for China. They can make cheaper models because it just doesn't cost them as much per watt. At least, that's the impression I get from the price disparity. AI compute is just GPUs and tons of electricity. Convergence is coming relatively soon. All models will perform well, which will make the deciding factor cost. China always wins on cost. And with AI existing in the cloud, you can't ban Chinese AI models like you can ban EVs, to save your domestic market. China is just gonna eat America's lunch in the value comparison. The bubble that exists is due to the wide gap between service cost for customers, and actual operational cost for providers. In America, operational costs have created a chasm that gives the appearance of a bubble. I think a bubble exists when demand isn't there, but demand is very much there for AI. So, if anything, I see the Anthropics and OpenAIs suffering catastrophic financial disasters and then some shitheel VC firm like Blackrock coming through to salvage the debris for pennies on the dollar. Maybe unironically selling some parts of those scuttled businesses to China. Anyway, as someone who works in the field, I see where we're going. OSes will change. Web apps will change. We will interface with AI for many things we currently manual our way through. The big game changer will be the proliferation of functional and easy to use agents that you communicate with through your phone. That is where we're headed. You need compute for that, and I still don't think we've hit the floor required for that. This is why PC part prices will remain high, and probably go higher. If the bubble was close to popping, I'd expect us to see GPU and RAM prices start to stagnate, and slowly retreat back to sane levels, due to buildouts being frozen. But it's not. Demand only seems to be increasing, which is not what I'd expect from a bubble. All that said, the market is super-irrational. So calls or puts. Whatever you want, it's still a gamble.

worldspawn00

VC funding is basically debt, they expect returns on their investments, it's not free money. And they have a lot of it, just in March they had a $120B funding round. One of the biggest funders is SoftBank which is taking out loans to finance the funding rounds, just because openai isn't taking loans directly doesn't mean the funding isn't debt. Ex: https://finance.yahoo.com/technology/ai/articles/softbank-40-billion-loan-openai-043037251.html And https://group.softbank/en/news/press/20251231 $62B since the end of last year from SoftBank alone.

21Rollie

It’s almost comical how predictable it was. My company prides itself on being purposeful with its moves but the c suite got wined and dined by the AI companies and then told us to go wild. Then the bill came due and surprise, even with the VC money artificially keeping the bill low, we blew past the budget, without seeing a corresponding increase in profits. Now we have hard budgets BUT they also want us to use AI or else walk for not being a team player. So, use AI for everything. We are measuring how much you use it. But if you use too much of it you can be penalized too. Got it? The world only gets worse every year for a few rich assholes to get more zeros in their bank accounts

Daforce1

I’m a VC who has some successful consumer brand investments and people in the market seem to be focusing right now on functional CBG items think healthier versions of junk food or every day staples. An example is Fruit Riot (frozen fruit with sour coating), any of the healthier sodas with probiotics or prebiotics, or coffee or creamer that has mushroom. They still want the same products just with a healthier angle.

WorldLeader

Right so who cares? VC-backed startups crash all the time. It's not a systemic risk to have a bunch of chatbot startups flame out. Anthropic and OpenAI are the only two in the game looking to go public, and they both are printing a fuck-ton of actual, hard cash. They are also in an arms race, bringing in the best talent, and spending reflects that reality. People in this thread are not using AI for work and it shows. Unless Congress outlaws AI, companies are going to replace people with agentic workflows and systems disturbingly fast in the coming years. We're all cooked, but not because AI is useless. It's because AI is actually really fucking good when connected within a business correctly. OAI and Anthropic's risks are from regulation and popular revolt, not usefulness or growth.

seraphim_west

Free users can be monetized through ads, which OpenAI is already experimenting with through a slow rollout. And a large share of OpenAI’s revenue, and, in Anthropic’s case, most of its revenue, comes from enterprise anyway. Anthropic is seeing unprecedented 10x revenue growth every year and is currently on the road to $100 billion ARR. I agree that these small startups are gonna go under, but that just leads to more consolidation and, in fact, potentially more token demand for the frontier labs. And VC money is heavily concentrated in the two or three frontrunners anyway, so your anecdotal experience isn’t representative of the AI field at large.

Sproutlee_Dev

Also people using it != people paying for it. Is it more useful out of the box than most websites in dotcom? Sure. So AI companies using the freemium model like they are a website where a non paying user costs 1/1000 of a cent but in reality each free user is costing whole dollars. Like everyone is saying, the bubble has nothing to do with usefulness, it has to do with costs of development and also I think the bubble is mostly in the private B2B space. I work as an MLE and I get literally tens of emails a day from new AI companies that are decently well funded popping up constantly. Hundreds and hundreds of these AI companies exist today (I mean look at last years AWS:Reinvent it was crazy) and likely in 3-5 years they will be dead. All of these companies are buying a shit ton of tokens from the big 2 model providers spending enormous amounts of VC money. When the music stops will the leftover enterprise demand be enough for current valuations? Idk 🤷

doglywolf

Yes lets directly ask the system whom's owners can and do manipulate answers if we should invest in it where it would hurt its owners if it said not to. But for giggles i did anyway and surprisingly it was pretty honest saying that market is showing all the classic signs of "Overheating' . It actually saying exactly what im getting at - Strong players will consolidate claim weaker ones - there will be a large corrective force in the over saturations . IT also says it wont be as severe as the .com bust but the issue is as big as that was you didnt have VC and investment money that tied into retirement index and heavily intertwined as it now , so when this "correction" happens its going to hurt a lot of peoples savings.

GlobalManHug

AI in reality costs are way higher than anyone will pay for it. Once the VC tap stops. They’ll burn.

PeachScary413

We do it because it's either free or like 20 bucks a month.. ain't nobody paying thousands of dollars for AI to write emails lmaooo Current prices are a pipe dream fueled by VC money and when it runs out we will have the crash, and people will keep asking AI why stonk go down while it's happening.

Ok-Adeptness-5834

"paying almost entirely with money from VC and circular financing" Conveniently ignoring that Anthropic revenue is up like 100x in 2 years from paying enterprise customers.

CurrentFondant49

The numbers have been reported by many sources including Bloomberg. Yes the hyperscalers only need to get paid. The thing you need to understand is that only OpenAI and Anthropic are paying. They are the only large scale customers, and they’re unsustainable companies paying almost entirely with money from VC and circular financing

RedTheRobot

Op also failed to point out companies were telling their employees use AI as much as possible and they got the bill. All of sudden that changed to only use AI when it makes sense. Ai companies loved selling that AI would replace employees but didn’t explain that it would a worse more expensive employee and you still needed someone direct it. So now the actual value is a lot clearer just like the dot com bubble, investors realized they weren’t looking a million dollar payday just because someone built a website about dogs. It will be even harder for the AI companies to prove they are even sustainable without VC funding.

Tearakan

200 dollars loses anthropic an estimated 1000 dollars for that claude pro subscription once a month. Once the VC funding dries up no regular person will be able to afford any of the major models.

truecakesnake

\> $20 is their "Use VC money to get consumers hooked and eliminate the competition" pric Been hearing this for years, but prices just keep going down.

Dangerous_Junket_773

$20 isn't at all close enough to what these companies need to charge long term. $20 is their "Use VC money to get consumers hooked and eliminate the competition" price.  Also, who's gonna pay that when there's free open source models that are good enough?

interesting_vast-

biggest surprise I believe is going to be second tier banks like the jefferies and the large european banks, they have indirectly underwritten huge amounts of these “private credit” loans by loaning money to the PE funds themselves rather then the underlying clients, meaning that ultimately these banks hold all the downside risk while the PE firms earn the premium from lending to these risky borrowers. Also any company making late stage private investments like Salesforce and Dell have started to do with in-house PE/VC like firms, generally if your business is going this far of course it’s a gamble that rarely works out like car manufacturers and large corporations turning to semi-banks in the early 2000s

stiffgordons

And the high regulatory/ reporting burden meaning private fund raising is significantly more cost effective than public offerings, so the best opportunities go to VC / institutional investors and the ASX is just a way for PE to dump unflippable investments on super funds & the few remaining retail investors.

NationalOwl9561

Well first you should realize what daily regime calls for a breakout of that kind... I've written up my strategy on this here (TLDR: See "R4-VC" or "R1-U"): [https://www.foxchasetrading.com/cracking-0dte-code-spy.html](https://www.foxchasetrading.com/cracking-0dte-code-spy.html) What I mean by R4-VC, R1-U, etc. is in the last one, Part 6 of that blog series.

Realistic-Cheetah413

The earnings are high now because companies are reporting contracted revenue to come. The fear with the AI bubble and the reality of openAI and Anthropic can’t figure out a business model to pay 10x for less product, is that they’re stuck in an unprofitable margin between expense and profit. For every token customers use under their current monthly plans, they lose money. So the fear isn’t that earnings won’t be good for the next 2-3 quarters, the fear is that the companies that are ultimately paying for that with VC money will run out of money to burn, and all of those unrealized contractual obligations will go out the window when there’s nobody to pay for them. These companies aren’t priced for what they make today they’re priced for what they’re projected to make 2-4 years from today, so if there’s doubt about that then the shares go down. As volatile as it’s been there’s definitely been a trend down in the AI sector as the veil is starting to come down on the circular financing and shaky foundation.

Nuklearapple

All he talked about is pricing no? ... mmhh. What would he know? What educated knowledge would he be able to present us other than analysts knowledge? I don't think he ever played GTA 3-VC-SA-4-5. It would be like explaining the feeling people get when they smoke crack to other people without ever having smoked crack themselves. In this case GTA or any MMO like WoW is the crack.

Peloton4371

I bought 5K USD of SPCX at 800b valuation back in late 2025 from a VC. My shares are in the process of transferring to my trading account, but there seem to be some delays. They have not hit my account yet. Lots of forms to fill out with weird questions I didn't know the answers to, had to email the help desk, wait for a reply, etc. My guess is thousands of people are having these issues and things are backed up.

anotherloserhere

That's kinda the point of VC. High risk. Imagine if there was no VC, and everyone just plowed money into the S&P, gold, or treasuries? Guess what? There wouldn't be any new companies! Why? Because VC is the biggest funder of startups! Doh! Yes, there are winners and losers, but people who run VC know that risk the best and are willing to do so, mostly in hopes of getting that one lotto ticket, but they are important in the ecosystem for providing funding for new (mostly unprofitable) ideas

Jealous_Bookkeeper20

Softbank's main bottleneck is fund scale destroying power law math. Power law VC works on a $500M fund where a $10B hit returns the fund 20x. When deploying $191.6B of capital, even a $45B paper gain on OpenAI yields just 23% total gross return over 10 years. That compounds to about 2.1% annually before fee drag and capital call timing. At that scale, single-hit venture returns can't keep up with a basic index.

mulletstation

VC investments have at minimum a 5+ year timeframe target before they're going to exit Like I'm not a fan of softbank but you aren't a VC guy so you just don't understand this strategy

AlfonsoOsnofla

I'm sure 2-4% annualised return is not what most VC funds would expect from such high risk investments.

mulletstation

This is how VC works bro

Brawmethius

He will get the bers as well later when he circles back money into google as they are also the prime investors lol. Huge name in tech makes startup --- > VC money pours in ---> Google marks massive paper gains --> He buys compute from google Lmao the JERK WILL CONTINUE