Thread

Amazon seeks to offload $8B of Nvidia chips to investors

80 points · 92 comments · wslh

burnte · 1790952544 · focus · HN ↗
The beginning of the bubble deflate?
1. jmclnx · 1790953070 · focus · HN ↗
  Sounds like a ponzi type scheme to me. The will "sell" installed existing chips to investors and then lease them back. So when the chips are obsolete or replaced, what will happen to the investment ?
  Sounds very shady to me. But also sounds like what companies do with real estate, except land does not get obsoleted.
  1. xlayn · 1790953932 · focus · HN ↗
    if investors buy the chips and lease them back... and the investors are also owners of the company via shares... ??? a lot of the investors is pop amd mom retirement funds... is this a way to funnel even more people money into the friking machine?
  2. Someone · 1790954149 · focus · HN ↗
    Companies also do leaseback with real estate, airplanes and industrial equipment (<a href="https://en.wikipedia.org/wiki/Leaseback" rel="nofollow">https://en.wikipedia.org/wiki/Leaseback).
    It’s atypical to do leaseback for objects with a shelf life that’s as short as that of GPUs, but in the end, leaseback is not very different from long term renting.
    It does signal that Amazon needs more cash fairly soon, but _if_ that is because they plan to invest lots of money, that need not be a problem.
    If, on the other hand, it’s because they’re running out of cash, that is a problem, as leaseback solves that in the short term, but makes that problem more dire in the future.
2. Good4boothee · 1790954033 · focus · HN ↗
  I would compare it to reselling mortgage bundles before 2008 crash. It is about moving risks to those who are more comfortable with it. Not a great sign but doesn't really indicate that sky is going to fall any time soon.
  1. cmiles8 · 1790955265 · focus · HN ↗
    Yes. This is the bit of the movie where everyone is offloading crap off their balance sheets to limit the blast radius before allowing the market to reprice anything. Once the big players have cleaned up their balance sheet they’ll let the bottom of the market drop out.
    Expect earnings calls to become a lot more skeptical about the future of AI once the balance sheet cleanup completes.

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