OpenAI Is a Ponzi Scheme  ## Metadata - Author: [[YouTube]] - Full Title: OpenAI Is a Ponzi Scheme - Category: #articles - Document Tags: [[video-notes]] [[youtube]] - Summary: OpenAI Is A Ponzi Scheme - URL: https://www.youtube.com/watch?v=ZTomnmINNyQ Is there some sort of weird investmentcircle jerk going on right now? So, Ihave never looked into this. I just knowI’ve seen the chart wherepeople show this chart of just likearrows going everywhere. I wantapparently for the first four or fiveminutes they cover this chart and talkabout it. I want to hear about this. Andthen, um, so the circular AI bubble, Iwant to talk about that and then I wantto talk about, I want to do a little bitof like just basic predictions, right? Iwant to do a little basic predictionsand talk about that. The entire AI industry is propped up by what feelslike financial engineering rather thanengineering engineering. And it’screated this sort of circular economywhere companies can pump their stockprice by just passing what effectivelyfeels like the same cash back and forthamongst themselves. By the way, this isnot an unusual thing that’s been going on. Imean, just look at all of the startups,Y Combinator and whatever, wherethey’re all buying services from eachother. Somehow they’re all making a lot ofmoney. Making a lot of money somehow. And yet,it does feel a bit like a Ponzi scheme.And it's not made better by the factthat a Harvard economist has stated thatUS GDP growth would be just 0.1%annualized when removing AI companiesfrom the calculation. Here’s thetimeline. Roughly in order, the USgovernment bought 10%. Well, what is theGDP growth with AI versus without AI?Uh, USA GDP growth 2025. That’s alot of AI. That’s a lot of, a lot, alot, a lot. All right. Anyways,let’s keep on going.Intel for $8.9 billion of taxpayermoney, including backdated money.Presumably so Intel CEO Lip Bhutan cankeep his job after US President DonaldTrump said he should resign days beforethey became BFFs. Weeks later, GPU cloudprovider and Nvidia Sugar Baby.Hold on. Okay, I heard a little bitabout this Intel thing. Hold on. I gotto look at that again. Sohere's the timeline. Roughly in order.The US government bought 10% of Intelfor $8.9 billion. I’m not a huge fan of the governmentowning corporations. Just throwing itout there. Okay? Like I don’t I wouldI don't mind if the government says itssocial securitypool of money was invested in some sortof blind, double-blind, quadruple-blindway in which, you know, spread evenlythrough some sort of, uh, you know,Vanguard funds or whatever. Like, I don'tmind that, but this just feels—I'mjust saying it feels a littlebit weird. Backdated money, presumably, soIntel CEO Lip Buchanan could keep hisjob after U.S. President Donald Trump saidhe should resign days before they becameBFFs. Weeks later, GPU cloud providerand Nvidia's Sugar Baby Core disclosed a$6.3 billion order from Nvidia on top ofNvidia's existing billions of dollars ofCoree shares it owns. Okay, holdon, hold on, hold on, hold on, hold on,hold on. Okay, hold on. He's saying alot of words at us really, really fast,and I am just genuinely too stupid tounderstand all those words at once. So,we got USA into—oh my gosh, look at thatline. Boys, boys,look at that to Intel, right? Okay,Intel, which, by the way, I’m using likea $3 mouse, an HP mouse. Uh, okay. So,that's 8.9 billion, right? That'swhat we saw. And we also had Nvidia. IJust so, I just want to try to keep this all straight. Nvidia gaveI am on, boys. I'm feeling straight today.I am drawn this straight. What was that?6B.I forget the name of the— we'll just putlike a— we'll put a cloud here because I don't know what it was. >> And Nvidia invested $5 billion into newUS government investment Intel. Then in thewait, what? Nvidia invested into>> government Intel. 3 billion order fromNvidia on top of Nvidia's existing billions of dollars of core shares it owns.Then Nvidia invested $5 billion into new US government investment Intel. >> What the hell's going on here? So theyalso invested into this Intel five of the billions>> of dollars of core weave shares it owns.Then Nvidia invested $5 billion into new US government investment Intel. Then inthe stock market, Nvidia and Intel line go up. Then Nvidia invested $100 billion into OpenAI, which caused— all right, OpenAI.Holy cow, look at that— up and down, up and down straight. That's a rare one. So that means Nvidia also did 100 billion here, which I think is probably a good playbecause they want to own this, right?Stocks go up. I know Nvidia stock will go up. Then OpenAI said, "Actually, we’llgive some of Nvidia's money that OpenAI hasn't received yet back to Nvidia tolease Nvidia GPUs." Butwhat the hell? They also gave billions back. What the hell's happening here? $100 billion is boring and for poor.The next day, OpenAI entered a $300billion agreement with the most hated tech company, Oracle.Okay, dude. OpenAI, you're a hoe. That's what you are. You are just anabsolute hoag. Everybody's getting access to you. That's crazy.129 billionfrom Microsoft. Don't forget that one.That's a new one, everybody. That's a new one. Okay, just in case you're wondering. So Oracle,I'm just going to assume Oracle is going to give them money back.Let's find out.So Oracle did, uh here, let's go like this.I'll go like that, swap that around and do this. There we go. Yes, IDid a lot of computer science incollege. You can tell. You can tell bythe way I do this. All right. So, thatmeans Oracle did how much? How manyhundreds of billions? So, the next day, OpenAI entered a $300billion agreement with most hated300 billion. Which direction is this 300billion in though? Right. Is it on topor on bottom? We don't know. Okay,there we go. For the love of the game.All right, there we go. Okay, we'regoing places. Let's just keep on going. As part of the Stargate 1 project, and notthe kind with MacGyver, and we'll makesure that no intellectual property issafe from ChatGPT's ship posting,Nvidia investment, Coreweave, which buysNvidia GPUs from Nvidia, then announcedan expanded $6.5 billion. Okay, hold on.Hold on. So, Nvidia puts $6.3billion. Okay, hold on. This is okay, now we'vehit the weird part. There we go. We finally hit it. $6.3billion on top of the $3.5 billionthey’ve already owned, right? So that’sa grand total of almost $10 billion intoCoreWeave,which then CoreWeave invests into OpenAI. 6.5 billion. This is starting to looklike Charlie Day's thing inPortlandia or whatever the show was.I was in "It's Always Sunny inPhiladelphia." Either way, one of the twocity shows,except OpenAI is at the center ofall the red strings.>> With OpenAI bringing their total dealto about $22.4 billion. Meanwhile, a UK-based AI infrastructure company NScalecourted others and Nvidia to raise $1.1billion and a bottle of liquor. Feelingleft out, Nvidia and my company runby a cousin of Nvidia CEO Jensen Huang, AMDgot in on OpenAI, allowing OpenAI tobuy up to 160 million shares of AMD.If OpenAI buys AMD GPUs, whichisn't circular at all. Jensen Huangdefinitely wasn't jealous about hispartner's new partner. >> It's imaginative.It's unique and surprising,considering they were soexcited about their next generationproduct. I'm surprised that theywould give away 10% of the company. >> What the hell did you just say? CEOJensen Huang. What the hell is hesaying? Those were a lot of words justTo say no words at all. Okay, so AMD issomewhere in this picture. And it looks like we got ourselves a bitof a 10enter. Dude, Jensen actually justkickstarted his, uh.All right, hold on. We go on the otherside. So AMD gave out 10% to OpenAIand OpenAI gave effectively back lotsof dollars. Okay, that makes no sense. And so, um, anyhow, it's, it's, uh, clever, Iguess. Next, OpenAI Sam Altman returnsand this time wants more Nvidia GPUs,but a week later, OpenAI and Broadcomannounced a deal to make custom AIchips, but there's more. As ChatGPTtold us, quote, "Stand by forstupidity." End quote. Elon Musk says,"XAI isn’t raising capital and it’s fakenews." XAI then raises $2 billion ofinvestment from Nvidia. All right, let's get XAI on this badboy. But two billion is pretty cheap.So, okay. So, as of right now, thatdoesn't seem like much. Right now, thatseems pretty cheap. In Elon Musk’s X AIas part of a $20 billion definitely notcapital raising deal, where oh gosh, okay,oh, okay, so then they go the otherdirection at 20 billion.I don’t think I understand how moneySometimes, I feel like I get it, and then other times this happens, and I go, "I don't know actually how it works."I'm not sure how you get two billion of investment and then agree to 20 billion of paying out. I don't know how that works, but that seems crazy. Money is fake; money feels fake.Which just receives money from Nvidia,will give money to Nvidia to lease Nvidia GPUs from a special purpose pass-through.Except one key thing, which is it didn't just receive the money,because most of these deals haven't actually transacted any money yet, and it's all currently hypothetical in a way that makes the line go up and seem like the money's transacting, but a lot of times it actually isn't. >> We're an investor already.>> The only regret I have is I didn't give him more money. You know, almost everything that Elon is part of, you really want to be part of as well. >> Maybe they bonded over their different methods of cheating at video games. Jensen Juan hand delivers an AI supercomputer.Wait, Jensen also cheats at video games. What does he cheat at? Honestly, Jensen kind of gives me aA little bit of a horse racing game vibes. Why does crypto seem less scummy afterwatching this?How's that possible? Did I just say thatout loud?I don't want any crypto spam. Please,please don't do that. But did I just saythat crypto is less dodgy than AI?I now feel bad for saying that because,you know, here's kind of how Ilook at it. Is that at least with crypto, there'slike a fake coin, we'll call it, I don'tknow, buttcoin or whatever it is, whichnobody thinks is actually going to beused for anything and then everybodyputs money into this, so the value goes up,and then somewhere in here, a rug pullhappens and everybody's a part of tryingto be a part of the rug pull.This is like very one-dimensional. Okay,you are investing into a Ponzi schemeand you're trying to maximize your moneyby exiting the Ponzi scheme correctly.This one feels really much more complicated.It feels a lot more complicated. Buckcoinis real and it's currently valued at0.000042.Okay, this is not a Buckcoinendorsement. Endorsing this, uh, mil token to the moon.Okay, so this feels like the same thing,but this feels way more confusing. I'mmissing lines right now.>> For his lack of cheating at video games.Jensen Juan hand delivers an AIsupercomputer.>> By the way, uh, Elon should have justbeen like this. Honestly, I think Eloncould have had such a W when he, when heuh, did the Path of Exile or Diablo orwhatever it was cheating if he wouldhave been like this. Well, uh, I, uh,I run companies and I have10 zeros, so I paid somebody to grindout the game for me. Sucks to be poor. Iwould have been like, ah, yeah. Okay. Imean, honestly, he's right. Like, Iguess I don't have that. You get thecheat. I don't get a cheat. Okay. Whatever. To the richest man in theworld. Perhaps to make up for his lackof XAI investment. The next day, aconsortium of Nvidia and XAI bought adata center company for $40 billion andalso somehow now black.>> Whoa. Did I just see whoa whoa whoa didwe just see>> a supercomputer to the richest man inthe world? Lack of XAI investment. The next day, aconsortium of Nvidia and XAINvidia, Microsoft, BlackRock, and XAIsignaled another strong round of supportfor growth in the artificial intelligenceinfrastructure industry on Wednesday.The four companies have entered into aconsortium that will be purchasingaligned data centers in a $40 billiondeal. Yahoo.com reported it. Okay, so we alsohave aligned data centers,which apparently is getting attention. We also have BlackRock,which just to make sure everybodyunderstands, we’re going to put BlackRock in here. And then we’ll put littledevil horns on them because they’reprobably going to be the Antichrist. Allright. Like, if we’re real here, they’reprobably going to be the ones that screwit all up. All right, we’re going to putthat in there. And where’s the otherone? Then Microsoft also has one, a datacenter company for $40 billion. And alsosomehow now BlackRock is involved,but that’s okay because BlackRock hasan excellent track record. Next, Oraclesays it’ll deploy 50,000 AMD chipsstarting in 2026, but Oracle alreadyOracle said it will buy $40 billion of chips fromNvidia in May for that. Actually, it seems less scummy to me. That somehow doesn’tseem like a bad thing. So far, Oracledoesn’t seem kind of crazy in thissituation because Oracle is just tryingto buy chips, make their own AI, andobviously to be in on this stuff. Soright now, Oracle doesn’t feelnecessarily scummy in this situation. Okay, here. So apparently Oracleand Nvidia are also in this one withlots of billions. Yeah, Oracle justwants to be a part of it. Like honestly,Larry Ellison just wants to abandonsome people in the ocean. Like that’swhat he’s all about. Uh, 50 millionchips. Did I get that right? It wassomething like that. Or 20. It was 20,right?20. Allegedly. Allegedly. Oracle just hassome FOMO. Open data center. Finally, the mostimportant news of all. OpenAI's Sam Altmandid theunicorn with a rainbow butt. Okay.Interesting.The most profitable possible thing thatadvances any new technology the fastestand said that OpenAI would enable adultContent for verified adults, whichdoesn’t at all seem like a futureblackmail vector. The good news is thatOpenAI already has a user verificationprocess with Persona. The bad news isthat their data retention policy isnon-specific on how long they keep yourdata, aside from vaguely statingbasically until we don’t need itanymore. But don’t worry, that’s neverbeen a problem before. And connecting anID to your AI significant other is agood idea that won’t be abused in anyway and is definitely a healthy thing todo. >> By the way, I’ve been saying thisforever. I feel like I’ve been harpingon the ads or about to drop AI thing. Ifeel right. >> And just to be clear, a lot of thismoney hasn’t actually changed hands yet,and a lot of the stock and shareshaven’t changed. >> Okay, so you should probably watch therest of the video by Gamer Nexus.This was obviously super awesome. Youshould definitely watch this becausejust like this alone, this is reallyconfusing.Just the constant deal making. I don’tEven knowing where the money's at at thispoint. TBPN, there you go. TechbroPodcast Network. That's what it is. Isthat what it stands for? But yes, it'sthat one. You know what? Yeah, that one. They just had George Hotz on yesterdayand George Hotz effectively just saidthat pretty much everything abovetier three AI companies, which isNvidia, is a tier threecompany. Everything above that is goingto be eaten alive. So even OpenAI, evenall these places are all going to bedestroyed. And so it's just down to Nvidia.So it makes sense; like I get why Nvidia is doing whatNvidia is doing, right? Nvidia iseffectively playing the game of handingout funny money to be able to continueto rake in profits and all this. And they just need OpenAI tocontinue to advance because let’s justface it, distillation of models isactually significantly easier. Nvidiaholds all the cards in this situation.Nvidia and AMD, they’re the cardholders. OpenAI does not have the cards,right? Nvidia wants AI companies toexist until they are the AI company.They’re going to keep selling pickaxes. Until they just own the whole mountain,and then they just sell the mountain instead.And then obviously, you haveMicrosoft with this thing right here,which just again makes it all intosome funny business that is all veryconfusing. Somehow, Microsoft spentless money to be able to get back outa bunch of money. OpenAI is, but they'vealready had a profit thing. Now thismakes even more confusion. You know why? Because when OpenAI also makes money,OpenAI also pays out 49% of all profitsto Microsoft, I believe, until 2030.Unless if that's changed with this newdeal. So, I do not know if this new dealhas changed in any sort of way. All thissays to me is just we're ramping up evenmore. This money is getting more andmore confusing. Nobody can tell what thehell is happening. And I thinkeverybody's making this huge bet that ifthey are right,and effectively the entire world cansomehow buy tokens, which by the way,the current cost of AI is just likeliterally unable to even use it due tothe fact that it's pricing itself out ofso many people's hands. So it just feelsit does feel pretty ridiculous to. Assume all these numbers can keep ongrowing forever., OpenAI Is a Ponzi Scheme, YouTube, 01k9cypcrg9cq7e2qhgxxk1fs0.