VC

Tallwhitedude123

Of course it’s not just that. Look at valuations AFTER these sell offs. The valuations are elevated but not in bubble territory. I would say maybe we hit a bubble but we are not there yet. Yes, literally everyone is laser focused trying to sniff out a bubble. First, we are not in a bubble. All this hinges on AI spending and how long it lasts. Right now we are back in the period of guessing it ends or slows soon. Also, another huge difference. The dot-com startups literally had NO REVENUES and vc money stopped flowing. OpenAI and Anthropic have MASSIVE revenues that are growing fast and costs are dropping. VC flows are actually increasing into these frontier labs

Just_Priority_9446

This VC guy on cnbc is a fucking loser

No_Way_6258

With what money? Does VC still have money left? More debt with high interest?  

Ready_Pen7712

There's buffetting, investing, VC-ing, trading, day-trading, betting, gambling and MoneyBurning. At this level You need the whole firefighting department.

Perspective-Parking

How do you put any value on a business that cannot and never will generate a single dollar of earnings. It’s just incinerates capital and VC money lmfao. A capital destroyer is not valued at anything. It would simply be priced at book value because there’s no value in the earnings or cash flows. In fact, negative cash flows is a liability not an asset. So you’d pay people to not own this company. This is still 1.5T too much.

SoSuccessful

You think? Recruiting is like the main function required to grow portco's. Having help from your VC is really useful and cost efficient.

rgbhfg

Get that debt from whom? They’ve already tapped the entire VC and Saudi money. The remaining places are retail or fed reserve

JungleDiamonds1

Crazy valuations for a company that just abused VC money to over market. Thanks for the free yeti

BabyWrinkles

Just had a moment of realization: I almost wonder if the proliferation of high quality open weight models is driving intentional scarcity of high end GPUs so that the money keeps coming in for the big frontier labs. We’re definitely in the VC phase of AI pricing - think early Uber where they drove taxis out of business with cheap fares, but now are more expensive. The hens will come home to roost at some point, and they’re having to throw all this money at infrastructure and model training in order to stay ahead of what someone can run on a decent GPU at home if they’re OK waiting 30 seconds for the task to complete instead of 5 seconds. So monetization is coming - it’s just a question of whether they can deliver a super compelling product at a sustainable (to their business) price point before enterprise figures out how to roll their own for less.

PassableForAWombat

Alright. For the low, low cost of $400 a token. I will allow people to use my generic AI model running from my NUC. 10/5 availability. Take it or leave it. Money please, VC

TimeTravelingChris

This has to be a joke comment right? None of this is being funded by actual cash flows. It's almost all VC money being lit on fire along with circular financing.

FearIsTheMindKiller9

This thing looks like Dotcom (fiber overbuild) with GFC financial games (bad loans). you can huff the AI paint all you want but anyone working in the industry knows how much this demand is being fueled by VC cash and circular financing. that's not a healthy market. you can be long AI technology and still have a negative outlook on AI companies in this cycle. do with that information what you will

RuleSafe6767

Coreweaf debt on secondary markets hit 15% today, which means they will need to sell new bonds at 15% coupon if they need more money, so they're effectively frozen our of getting anymore capital. Their only hope is private B2B, like more rounds of VC injections or direct deals with guys like nvidia (they could do a cash for shares deal).

Strong_as_an_axe

LLMs aren’t the route to AGI or RSI. These companies have no moat. They’re pushing like crazy for regulatory capture because they’re incinerating cash. Gonna see a lot kore fuckery yet just because of the sheer scale of VC that needs to be made whole

NoCommonDog

Scam Altman has gotta be regretting his choice to delay. All his VC investors are getting blue balls waiting to get their money back.

BumHand

I actually know someone who was a recruiting lead there a few years back. Definitely not a hot chick unfortunately. They worked in tech recruiting for hyper scalers and FAANG around 2010. Moves into leadership recruiting and eventually poached to a VC.

LocksmithNo2374

Yup agreed. Negative signal re. VC

NeverDeltaNeutral

I get major schedenfreude thinking about the VC money locked up in these AI companies. Particularly the smug clowns who invested the latest rounds who thought it would be a quick flip before the IPO. Regular companies that use AI will be the ultimate beneficiaries, not the hyperscalers making a commodity product that is more capital intensive than trying to dig to the center of the earth

ghreddinsoggles

VC still balls deep funding AI companies - NBIS will reap rewards whether they succeed or fail

Hamachiman

You’re right. Pop quiz: When is Anthropic’s top? And how can you tell the difference between a buy-the-dip opportunity vs a drop that will never recover? For all those 50x - 1,000x companies I mentioned, investors got more and more confident and more and more complacent. Every dip always led to higher highs…until they didn’t. I remember the complacency well…I was running a VC backed dotcom and the management team were cool as cucumbers in the year 2000, thinking it was yet another short term panic that would pass, just as every other one had for the previous five years. But it didn’t pass, and NASDAQ didn’t regain its peak for 15 years, by which time virtually no investor was still holding on. And a company that goes up 50x and drops 98% is break even, but ONLY if you bought at the absolute bottom. Fund flow data proved most people bought near the top, which is why euphoria marks tops and despair marks bottoms.

Every_Way_8671

Here’s the trade; put $1k into each of the big AI companies, you’ll either be a billionaire in 20 years or money itself will be worthless. People forget that the corporations and rich live in a socialist microcosm, it doesn’t matter how much money they lose, the government or VC’s will just give them more. Especially when it comes to AI, they will empty Fort Knox because they believe that whoever creates the first AGI will rule the universe.

flyboy573

You are underestimating 1.) how sticky enterprise spend is, 2.) there will be a market for enterprises to have long term contracts with Anthropic “because they’re the best”, even if they’re way more expensive and 3.) The frontier labs are desperately trying to improve unit economics through economies of scale.  If they can offer AI at a fractionally lower cost than other players, they then could lower their own prices, maintain (or improve) share volumes, and yet still have higher incremental margins.  It’s tough to swallow though. This is VC math at the scale of mega cap tech. I don’t have a crystal ball of how good (or meh) the incremental margins can get to. High risk high reward investing. 

pragmojo

Idk - I think it's significant, if they couldn't manage to raise again, and maybe it's the end of VC's throwing endless capital at any company with "AI" in the name, but it's not enough to signal a bubble pop incoming. Character AI was betting on AI companions, but the market has moved towards AI use-cases that produce work in the economy. I.e. coding agents, ai assistants etc. And Character AI wasn't high enough on the fear index. To get funding these days, your product can't just kill a couple of teenagers, it has to be an existential threat to humanity.

doctorqaz

Make your own chips at home -> set a “projected revenue” (use roulette) -> file for IPO or sell for billions to a VC = 💵

greytoc

Paul Pelosi isn't a politician. He founded and runs a VC and real estate firm which he uses to manage and invest. He happens to be married to a politician which is why his trades are made public. The problem with picking a single trade out of a position is that you may not know why the position is being held. Especially when the investor may be constructing a more holistic portfolio - so the challenge will be to understand what sort of sizing to use. It doesn't mean that you shouldn't follow someone for inspiration and ideas. But you also have to be aware of the disclosure lag. Also technically - politicians aren't insiders. If you wanted to follow insiders - you ought to look at the SEC Form 4 filings. See my followup discussion below.

Eleina_Edelweiss

Its junk honestly antrophic and openai is a dumping ground for VC. Its their exit strategy. Once they hit their target price they will dump hard on the market. If you dare to play keep it short and tiny to minimize risk. Im not touching those with a 10 yard stick. But again i dont play stock LOL.

Available_Way_355

What is the VC fund that invests in Chinese child labour rare earth refineries and what’s the required invested capital to join ?

Syllabub_Visual

Anyone who isn’t living in the HOT parts of Texas or Florida is making a mistake. No taxes, all about liberties and freedoms, and no socialist and trans bs. Plus these are where the hot girls are. Sigh feel that California SHOULD belong but only if Steve Hilton wins this fall because that state is run by a bunch of crazy liberals even though there are a lot of hot people in socal. It’s truly a shame that some of the greatest cities in the world, NYC, LA, SF, London, and places like that are run by a bunch of big government liberals who like high taxes and bs regulations (and trust me I don’t even like 🥭 and his stupid movement) so that’s why many of us have moved to Miami instead. Instead of losing everything on 0dtes, you could buy property down here because it’s where everyone wants to come and the values are about to SKYROCKET. Guess Seattle has no taxes as well but they just put in place their new “millionaire tax” and it’s cold and full of people who aren’t hot. All the tech companies and VC’s have moved to Miami and I have no doubt nvda will next so a pretty good time to invest in the city…

Rymasq

"cheaper players" When has that ever happened in tech. VC literally bases their entire strategy on the knowledge that tech has a high barrier for entry

RaspberryPrimary8622

There is no stickiness or vendor lock-in with LLMs - individuals and enterprises can and do change providers easily and quickly. The VC cash spigot is almost over. Both OpenAI and Anthropic will go bankrupt within the next year or two. They placed a massive bet and they will lose that bet because their revenues are nowhere near enough to cover the hundreds of billions of dollars in debts that each has incurred and cannot get out of. Their technology is useful but nowhere near profitable. Their Effective Altruism / Rationalist ideology instilled in them a lot of magical thinking about the transformative potential of LLMs. These people have seriously weird beliefs that detach them from the business realities of their product.

A55BAG

Dumb VC smooth brains should keep their 'girl math' in private markets.

Medical_Lengthiness6

LLM tech is barely different from 4 years ago. You just keep hearing exponential and parroting it. We got better harnesses which is software. Not exponential advancement. It's moving context around and sheparding the LLM better. The models actual intelligence is not exponential and all the experts have said this. It stopped back at GPT 5. For coding they are often even pulling back models because they are worse. It still hallucinates, just a little less. Generative video and photo fixed the finger issue and looks better but is still clearly AI and creepy. Look at things rationally with direct comparisons. Not via the AI CEOs/VC marketing and fear mongering. Comparing day 1 chatgpt to now there's been obvious big improvements but LLM technology is not exponentially growing. The marketing around it and the number of agents they run at the same time (the software) is changing but it's not exponential change, it's just moving stuff around into different configurations.

Drew707

They don't need to right now. They use the VC cash to keep the burn rate manageable while they drive adoption and stickiness, then once they are comfortable with their MAU, they start optimizing, which they've already began with Sol 6.1 for OpenAI. This is a tale as old as Silicon Valley.

daveedgamboa

I agree, feels like a classic case of VC money then charge like mad a la uber, postmates, etc. First they need to show the use case, overrun status quo and get us hooked. Then voila. Not to mention all the routes to revenue such as ads which are just getting started and data as well.

mykeystrokes

Gotta say - most of the posters on here are out to lunch. Slides produced VC / PE rounds are entirely different than S1s or other SEC docs. There was no revenue miss. But please - keep the chatter up - would love to see a correction in a couple of stocks so I can get back in.

Capital-Pineapple961

Futures backed by nothing I imagine. Or is VC so kind to rent their shares to this dealers

CEOuch

Perhaps you’ve got access to a reputable provider of a Layer 0 SPV. But just in case it’s not clear this is the case, I want to share some words of caution. Through my work in VC I see offers for SPVs in top private companies constantly. I won't claim to know whether the underlying stock is a good investment, but anyone considering one should be very careful about how the vehicle is built under the hood. Often what you're offered is a multi-layer structure. Basically an SPV investing in an SPV investing in another SPV. Often with no visibility into the lower layers, with each layer potentially charging its own fees and carry. For example, with just two layers at 20% carry, you keep only 64% of the gain before management and placement fees. You also often can't verify that the bottom layer holds real shares rather than a forward contract or some other indirect interest. If you can't get clear answers on fees, carry and what's actually held at every layer, assume the structure works against you, even if the stock does very well.

Skittler_On_The_Roof

Primarily pension funds, financial endowments, and sovereign wealth funds.   The financial world is incestuous so no doubt if you dig you'll find business dealings with people associated with VCs, but in no way if Apollo a VC.  Their biggest business is taking pension funds and investing them in the fucking Russell 2000 ETF (their largest holding).

Skittler_On_The_Roof

Apollo isn't a VC nor is it "balls deep" in Anthropic or Open AI.   The shit that gets upvoter here just for confirmation bias...

Super-Activity-4675

Honestly, the math. 1) OpenAI and Anthropic have no paths to profitability and are literally burning money. They don't charge the actual costs of their services and they have no means of cutting their costs. Their main customer base consists of AI startups that are also not profitable. There's a huge concentration risk. 2) The spend is absolutely unsustainable. It's tapped out VC and it's gotten to the point where it's maxed out private credit. Interest rates are rising and the debt associated with the data center buildout is ballooning. Most neoclouds debt now is trading at junk status. 3) Open source models are going to cut into OpenAI and Anthropics business. 4) OpenAI and Anthropic have over 1T combined non-cancellable commitments, and their revenues are starting to plateau. That's the high level view. It gets worse the deeper you dive. The growth is unsustainable, and the best use for the technology tends to be in smaller models that can be run locally. This will not end well.

Plane_Top5841

most of the cash comes from a fountain of it-era money: huge VC deals, bond issuances, and sweet-tooth investments from the tech giants that want a piece of the hype. the rest is a steady stream of API revenue that gets rolled back into the next training cycle. if you’re looking for a tidy profit model, the reality is that many labs are still operating at a loss and betting the next wave of breakthroughs will generate the upside.

SanDisk_Made_Me_Rich

I traveled to San Francisco yesterday to pitch Sex Robot Inc. to some VC investors and a question I got was: > "Well what happens if a sex robot is programmed, malfunctions, or corrupted and tries to kill you." And I was like: 🤓: Well your real wife/girlfriend can kill you also.

No_Design_1619

if the 4x book says what it does, it’s probably a VC exit rather than fresh capital; the sudden pull shows the pricing floor slipped—maybe due to valuation mismatch or a looming lawsuit—so the fall window feels more fragile than it looked.

Syllabub_Visual

I can obsess over Elon but I’ll just say I’m rich enough for him to care about me why because I probably know VC’s who know someone who knows him and I’m worth over $30m so that’s gotta count for something. I sold a tech startup and people like that care if you can do those things.

FearIsTheMindKiller9

There’s a famous quote in the VC community. Every 10-15 years people relearn the same lesson. The only consumer business model is ads and you cannot charge consumers for software.

shiny0metal0ass

If the people making the investment on these data center decisions no longer understand the technology and have spent the last ten years surrounding themselves with VC money guys and pushing out the tech nerds, and then they flip from profitable, asset light, companies into debt heavy negative FCF behemoths, the fuck do you think my point is?

ContextFew721

Curious, how exactly are you investing / getting access ? Know someone in VC / are yourself?

W-33-

I could get a home that’s perfectly fine for about \~$600k. What we’d like is more in the $800-900k range. I’ve got some big winners in my VC portfolio that hopefully make this a reality in the next 2-3 years, but I’m not counting my chickens before they hatch.

W-33-

34M $1M in the stock market (mainly SPY, QQQ and a small bit of semis) $200k in VC investments and collectibles. $0 real estate - renting away

drakilian

Untrue, we can fill the gap in endless amounts of VC money that will surely 100x in 10 years

Hopeful_Sounds

The bankers and VC frothing in the mouth at the $2T valuation for the road show

Slow_Lion_4178

I believe you're half right. Retail traders without the sophisticated designation naturally sit on the wrong side of the Value table. Value Investing of any note is usually done through VC and pre-IPO terms. Once a company goes public on a major stock exchange it's priced to relative perfection very quickly and pretty much everything becomes Growth even if it is a recovery argument. So for retail the 10% of scraps of value left is just hard to get at since 90% is purely off exchange or in pink sheets or somewhere else obscure and risky to navigate.

shiny0metal0ass

Lol maybe. But I don't think that much VC money exists. They'd need to get saved by daddy tech giant and they're not exactly in a position to _keep_ dumping money. I think the SpaceX IPO was a trick that will only work one time.

Hopeful_Sounds

>Who’s we? I think you meant to say the bankers and VC who are making these valuations

TrappedInATardis

A large number of the revenue is from AI start/scaleups that get their money from VC. I do fear that the tap might run dry at some point.

TrappedInATardis

I think the VC consider risk diversification by putting all their eggs in all the AI baskets so they will be a bagholder of the winner.

HeyItsYourDad_AMA

David Sacks is one of the biggest shills and party hacks to ever set foot in DC. 4-5 years ago All In was a decent podcast where you had to put up with 5-10 minutes of his bullshit to hear some good takes on the VC world and tech. Now its nothing but propaganda and misinformation. Once they talk about something you actually know about you realize how little they understand outside their domain

babyboyblue

So the majority of retail investors would have exposure to the company through different private equity funds( VC in this case) which own other private companies. Unless the fund is perpetual/evergreen there is an end date for the life of the fund. Usually 10-12 years. That means these funds need to return the investments back to their investors by that timeline. From my understanding it has been incredibly difficult to make a direct investment on the retail side to actually own the private shares because of the restrictions Anthropic has placed on

Notveryawake

How about the 2040 numbers. Then maybe it might make sense. By then they should have enough government contracts and the tax payers will be funding them rather than VC.

idekwutp

Fair points. I stand corrected on the Waymo front. But I don’t think AV development will remain very complicated as AI gets more powerful. It’s just extensive training that’s required, and these startups are doing it with their VC money from Uber. I also think that many people will feel more comfortable with human drivers even if they remain a little more expensive, though this remains to be seen.

Strong_as_an_axe

They cherry picked two months where they had artificially lower compute costs. They have no moat against open weights models. You cannot be naive enough to believe the proposed slow down is due to concern for humanity? Its obvious what is going on. Doesnt mean the IPO will fail necessarily though, there is so much VC money that needs to be made whole, there is certain to be some fuckery

DapperCam

They are doing an IPO now because they've exhausted every VC funding source on Earth, and banks actually need to make money with their loans. They need cash for the money furnace.

Conscious-State-7584

I imagine you are in tech or VC/PE/IB? Curious about your line of work.

Street-Badger

I’m with Jensen.  If Altman, Amodei, and fucking Musk all agree on something, then you can be assured that it cannot possibly be the truth.  These cash incinerators need government to build a cartel around them.  They are not afraid of AGI, they are afraid of running out of VC dollars before they can pass their bags onto retail.

shiny0metal0ass

A supply side crunch from inept (insane?) geopolitics and the culmination of the VC "pressure valve" turning into an unregulated market bubble to the tune of trillions happening at the same time? Yeah, I've thought about it once or twice...

Neverbeenkissed69

I spend what it costs to buy things from the people I want to have my money. So anything VC backed, Palantir, and other good actors. I also like shiny stuff.

IcyLake2078

Why would it be a combination of the dot com bubble and 2008 crisis😂 that’s insanely alarmist 😂 it won’t be even close to as bad as either of those. If it blows up most of the exposure it held by VC funds. Who cares if they get liquidated?

CrunchyMage

Because the entire stock market relies on Anthropic and OpenAI turning a profit. Hyperscalers are throwing their entire balance sheets at building more AI data centers, and over HALF of that backlog is just for OAI and Anthropic. If these two companies can't pay, either by turning a profit or by raising at $1T+ valuations, then that huge data center capex will have negative ROIC, and the hyperscalers that make up like half of the SP500 will see huge negative corrections most likely triggering a dot com style crash/recession. I'm not saying that will happen for sure, there's a good chance they CAN turn a profit, but only deep insiders know how close or far they actually are to being profitable. As things stand, they have basically fully tapped the VC money well, and public markets and government are the only places they have left to raise money to pay for these absurd trillion dollar data center commitments.

microbular

Who cares about making this thing profitable? The goal is for VC and insiders to get all have their money back + nice fat premium. Leaving the government, pension funds and retail investors holding the bag.

YourPalJake

Yes, just google it. 10B$ in debt. They are heavily financed for datacenter buildout. Just like all the circle jerk finance companies. Oracle, CoreWeave & Nebius etc.. are dog shit stocks that might even go bankrupt once VC money injected in OpenAI & Anthropic is burned to a crisp and therefore can no longer pay the Neo clouds.

ckin-

Who are you trying to convince? VC people they’re making a bad investment? Just drop it. You aren’t getting anywhere with this.

Own-Recipe5908

Funny part is it'd be the opposite. If VC money disappears data center class cards are gonna be flooding the market so running that shit locally will become semi-economically feasible.

PLEASE_PUNCH_MY_FACE

Usually people act like an industry is actually functional first but now everyone is skipping straight to cope. You're AI girlfriend is going to cost 10x as much when the VC money disappears. I'm sorry.

CyberSmith31337

The biggest difference is that there are no consumers for AI. AI's profits, as limited as they are, are driven almost entirely by circular financing deals, and private equity investment. Those are not really sustainable business models/customers. PE is already essentially bled dry, and even VC like Softbank have tapped out their credit with the banks. That's what is going to cripple AI; the fact that they don't really have a business model that works, and yet they have **trillions** of dollars of investment expecting trillions of dollars in returns, which is just never going to happen.

SongNo4012

The equivalent of the .com names from the 90s are Anthropic / OpenAI / xAI . The main difference: in the dotcom VC spread their bets across many startup whereas AI era VC is primarily in those three companies. They bear resemblance with the dotcom: they re not profitable (enough) compared to their running costs and technological progress makes their product obsolete very quickly. And crucially their total addressable market is not within reach - at least not in the timeline they sell to investors. That’s because people aren’t ready. It will take years for companies to embed full AI in their workflows and profit from a reduction in payroll. It takes time, effort, money, training people and compute to do that. In the 90s a few companies went ipo promising Hollywood movies over the internet. They all went bust and it took 15 years for netflix to rise. Because back then most people didnt have the bandwith and couldnt be bothered. Same for online payment people were too scared of it which delayed online shopping. Anthropic and OpenAI are desperate for companies to embed their models end to end in their workflows, but that isnt going to happen within the timeframe they can survive. Now because VC is so invested in them they re almost too big too fail. Both Altman and Amodei are hoping for some government backstop.

Dry_Illustrator8855

Translation: ROI doesn’t exist for valuation desired. So fear monger to cut competition and grow business. Save VC and private equity funds deployed

lasooch

And to have an excuse to actually slow down their own training leading up to IPO so they can pretend to be profitable a bit more believably... or to extend their death rattle runway by burning what’s left of VC money a bit slower. And possibly also as a tactic to pressure hardware manufacturers to lower their ridiculous margins by lowering demand.

buzzlightyear0473

Exit liquidity before the idiocy of this bubble is exposed and VC money dries

Nol-Felix115

Rising storm 2: Vietnam did that to me when I turned my head to fire on some VC and I shit you not time slowed down for me as the first thing I see is a rpg shell going in to give me a kiss on the nose. I screamed so fucking loud as my body in game was reduced to a fine pink mist. I also love the VOIP in that game cause when I’m on the VC team I will sneak around to find GI snipers then get right behind them, say some out of pocket shit then dome them.

SomeSamples

Yet still holding out his hand for VC money.

crockpot420

It's hard to say since non-publically traded AI companies don't disclose or are less likely to disclose on EDGAR, but since they're 15M or more in total assets, I can see that they are constantly being funded like Reg A form 1/2 or something contractual, but it doesn't go into too much detail. My boss does VC and we never touched AI, but almost all the people we know who are either already cashed out or are trying to cash out and chewing people out asking where their money is. When they went in like 3-4 years ago, there were a lot of promises that they would make everything back in like 2 years +15% but this shit was DISGUSTINGLY over promised. "Everyone is using our LLM, you can see the token usage and interaction statistics" Well, no shit, it's literally in everything whether we want it or not, and most of us don't want to use those shitty tools. Have you seen the ads? The gimmicks? Mandatory token quotas? It's the tactics of desperation

TXJohn83

There are some VC etf's that hold a 20%+ of there value in Anthropic, if you really think that a mixed bag is going to pay out.

Ahzmer

Thats the thing, VC backs your tokens 40x - so you make their loss bigger

No_Top8919

fuck that. get 800 bucks worth of 0DTEs and (maybe) buy a VC

Non-mon-xiety

So… hyperscalers and VC aren’t going to get any of their investment back then? This bubble is gonna pop

juste1221

Open models are an even bigger rug pull gotcha than these supposed subsidies. Open western models only exist to attract investment, VC funding, and become acquisition targets, while China's only exist to try to undermine western companies and damage their businesses. China by the way has closed sourced all their generative models for quite some time now and turned them all into paid API's. Their general LLM's will no doubt follow suit sooner rather than later.

UpbeatFix7299

The bottleneck is they will have to get a large number of customers to pay more than it costs. Can't keep burning VC, Nvidia, etc's cash indefinitely.

JC878

Most people exercise because they want to be healthy and look good. If there wasn’t any benefit, there would be no reason to even get out of the house. Multibillion dollar company and can’t even make a decent pair of shoe without the sole falling out in a year. And it’s actually their trade. Don’t need to be a PE or VC genius or even marketing/branding guru to know where they went wrong. You could just run it through a few LLMs and you probably get the same results.

Silentkindfromsauna

They’re definitely making “proper money”. The VC playbook has played the exact same way for decades but somehow people are still surprised to learn that these companies can pivot to profitability once the ceiling on growth has been reached.

brock_lee

Just my .02 I don't see anything positive here. They've not really turned this ship around since they went bankrupt and all the subsequent investment in them. Their new strategy is residential, without the benefit of many of the tax incentives people had. My brother runs a building department and approves a lot of solar projects. He had a guy who runs a solar company sit in his office and tell him there is "no money" in residential (and that was before the tax incentives went away) and he makes all his money in commercial and municipal projects. I think the residential focus on the turnaround hopes is high-risk, low-reward. Not to mention the dilution this latest round of funding meant for shareholders. The market responded accordingly on Friday, down something like 16%. A relatively small investment from a VC person is not reassuring. I worked for a company that was funded with $75 mil in VC money, and we were burning through it. There was concern that the VC people would take their money back as a kind of "stop loss". We actually spoke to the lead guy and he said "No, we don't do that. We know 90% of the companies we invest in will fail, but the other 10% more than make up for it." True to his word, they did not take their money, we burned through the rest, took whatever computers and shit we could, and went home.

Hamachiman

I sort of had that experience with my first company that I started. It was VC-backed and was valued at $30 mil and I owned 20% and it went to zero. That experience kinda gave me the inspiration to start a business with less (ie $300) and see if I could take it anywhere.

Hamachiman

Thanks. Maybe the humility comes from the reality that I’d started three businesses prior to the one that did amazing, and they all flopped. With one I actually raised $10 mil of VC money (back when that meant something) and a year later the business was out of business. My attitude has become: I have no idea which business ideas will work and which will not. So I believe the smarter decision is to figure out how to test ideas super cheap. If one of them starts doing well then roll with it. But most will not, and they should be shut down pretty quickly.

version-two

Ohh for sure. Just reminding the others that her trades are unlikely to just be her brainchild. Dudes a VC/investor, these are his plays 8/10 times id bet.

strive4x

Nvidia has become a VC / investment bank

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