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Premium Newsletter: The Hater's Guide To NVIDIA Part 2, the story of how it became the AI Bubble's GE Capital, propping up unsustainable companies and conning hyperscalers into buying GPUs to restart growth in the post-ZIRP economy. www.wheresyoured.at/premium-the-haters-guide-to-nvidia-part-2/

With concerns about NVIDIA’s circular financing growing, we’ve seen the company insist it’s nothing like Enron, Worldcom, or Lucent. Perhaps not, but it’s still engaged in some weird indirect vendor financing shenanigans. www.wheresyoured.at/premium-the-haters-guide-to-nvidia-part-2/

NVIDIA has become far more of an asset manager or a bank than a technology company, with AI and GPUs existing only as tools to manufacture demand from customers who increasingly can't afford to pay for them, if they ever could. www.wheresyoured.at/premium-the-haters-guide-to-nvidia-part-2/

This is all very reminiscent of GECAS — GE’s airplane leasing wing, which, under Jack Welch, became the largest purchaser and lessor of airplanes for thousands of airlines that couldn't afford them, often backstopping their companies. www.wheresyoured.at/premium-the-haters-guide-to-nvidia-part-2/

GECAS took money from investors, which it then used to buy planes (often with GE engines), which it would then lease to airlines that couldn’t afford them — many of which couldn't survive without its bailouts. www.wheresyoured.at/premium-the-haters-guide-to-nvidia-part-2/

Obviously, this wasn’t sustainable, and in 2008 things came to a head. The problem was that GECAS was artificially holding up the aerospace industry by manufacturing demand. It couldn’t do this forever. www.wheresyoured.at/premium-the-haters-guide-to-nvidia-part-2/

NVIDIA is smart, and worked out a way to do vendor financing without being the bank, using the FOMO around AI to con financial institutions into funneling billions into neoclouds by guaranteeing them revenue and funding. www.wheresyoured.at/premium-the-haters-guide-to-nvidia-part-2/

NVIDIA's greatest con is that it operates as the vendor, customer and financier-by-proxy for every neocloud, all without having to hurt its credit. Financial institutions are ignorant, and see circular financing as a good thing. www.wheresyoured.at/premium-the-haters-guide-to-nvidia-part-2/

NVIDIA doesn’t have to prove that AI is an industry with distinct demand that will exist long-term, it just has to show that it has some long term customers right now. Ratings agencies have failed to protect investors from neoclouds. www.wheresyoured.at/premium-the-haters-guide-to-nvidia-part-2/