The Ai Bubble?
Observed By Tshepo Magagane
[USD1.5trn that openAI has committed to spend – oh, it is loss making]
“extreme euphoria” “look at chart – double bottom – those are fundamentals”
“numbers dont matter because this is changing the world” “I have seen this before”
“flammable items not red flags”
“enron = off balance sheet exposures – only comes due if “x” “
“if it falls to this level, it is no longer due” – when you are a structured solutions person, you dont want any side of that trade
“people run companies, they dont run themselves”
“we just did this – accountants go ‘what do I do now’ “
“did AI understand the linkages eg capitalising costs” “AI gave me where to go but I need to understand the implications”
“if I dont know where I want to go, AI just gives me info”
“the know the numbers but they dont know what they mean”
“cost of risk priced too low”
“knowledge is superfluous and experience is a handicap”
“nvidia is investing in openai…microsoft is also an investor in openai…microsoft offer cloud services to openai, so it is a customer…nvidia is also a supplier of chips to openai..coreweave largest customer is microsoft…nvdia supplies its chips…coreweave ipos – nvidia buys shares…jpm morgan lead underwriter offers loan”
“Nothing means anything until it means something” “when they matter, they matter a lot”
“ratio needs to be adapted to the company”
“if it is making investments in its customers…”
“money doesnt start off as crooked – outsiders come in and say ‘I want you to give me x return’ ” 57min
“ebitda mother of all disastrous measures – because of what investors want to believe it is – purely an operating metric…not cashflow”
“stock options should be an expense – you can choose to pay in options or cash”
“index investing is momentum investing”
“classic agency issue – Buffett has built businesses that generate cash”
Most importantly, see the Meta and Alphabet revenue lines:
