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

80 points · 92 comments · wslh

  1. vel0city · · focus · HN ↗
    I'm just trying to understand this more, can someone please give more insight?

    So Amazon bought a bunch of nVidia hardware, and has been installing it in their datacenters. These are supposedly in-service for Amazon customers, a lot of it available and in-use today.

    This is creating a SPV company, have that SPV take out loans, have the SPV buy the hardware still installed in Amazon's datacenters, and then Amazon rents the hardware they previously bought and installed from the SPV?

    This sounds like an expensive shell game paying expensive finance bros to make some numbers on papers look a little different. What do they really gain from this? Is this just because Amazon wants ~$8B in cash today, like taking a cash-out refinancing on your home? Doesn't Amazon have over a hundred billion dollars in cash on hand? If you've got a pile of money in your house sitting around, why would you do a cash-out refinancing at a time of high interest rates?

    1. scribu · · focus · HN ↗
      I’m not a finance bro, but my read is that Amazon wants to focus more on *using* GPUs and focus less on finding financing for buying GPUs.

      They’re trying to convert GPUs into an investable commodity asset, just like crude oil is, for example.

      Rough analogy: You have oil producers (Nvidia), refineries (AWS) and end-users (all software that uses AI).

      1. GlacierFox · · focus · HN ↗
        Not sure I understand this hypothesis. GPUs age like leftover dinner unlike crude oil...
        1. scribu · · focus · HN ↗
          Replace oil with wheat, then - it can be stored for a few years, but it’s still perishable. Yet it still trades on commodities markets.
        2. eiieke · · focus · HN ↗
          Not only that - technological obsolescence
      2. vel0city · · focus · HN ↗
        If they're wanting to focus on using GPUs instead of playing finance games, then why are they spending all the time playing finance games on $8B when they've got >$100B cash on hand?

        > focus less on finding financing for buying GPUs

        This is them focusing more on financing on GPUs.

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