Nvidia, OpenAI & The Risk No One’s Talking About

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Okay, Nvidia.com deja vu. Yeah, a little bit. A little bit here, people. Again, you got some youngsters out there working for some of these big investment firms. I got a kick out of this one here from Goldman Sachs. He said, I’m not old enough to been around during the tech bubble.

And let’s level set multiples that are now we’re near that point in time. But vendor financing was a feature that era when the telecom equipment makers, Cisco, Lucent, Nortel, what was the other ones global crossing. That was a bunch extended loans, equity investment or credit guarantees to their customers who then use the cash credit to buy back the equipment. It didn’t work out well. And then

Again, this is from Goldman Sachs. kid’s not wrong. That did happen back at that point in time. This is how it worked. Company A, whether it be a software company, a hardware company, a service provider would invest in company B, which was a startup or a dot com.

Company B would commit to purchasing company A’s products or services often under long term contracts. These deals inflated both companies perceived growth. Many of these purchase contracts were non-binding or contingent. They didn’t always materialize. And again, a lot of these startups bought stuff that they didn’t need nor could afford. Again, it was kind of

Well, for lack of a better phrase, you want to call it circular logic. Some people today are calling it one big, how shall I put it, circle jerk. Again, Nvidia right now, compared to where they were just a few short years ago, as far as their cashflow is concerned, it’s quite extraordinary. The $100 billion investment into open

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AI, it’s interesting. It’s interesting. It’s the way it’s structured. It’s not like the deals that were structured back during the dot com era. MeanVidia is in a position right now based upon the strength that they have. They’re also facing regulatory issues when it comes to whatever acquisitions

they may make. They’ll get blowback from regulators in particular in China. It’s a place they want to do business in. know, some people saying, well, why don’t they just go out and buy their own AI company? It gets a little bit tricky when it comes to that. Am I watching this? Yes, I am. Sam, that’s my job, okay, as a money manager.

to be extraordinarily cautious and look at everything. Again, vendor financing, conversations now in play when it comes to this. There’s that character in a television show from the 1980s called Hill Street Blues. I he was the, I don’t know, the shift commander, whatever it may be, before they went out. said, let’s be careful out there. That’s the type of attitude that we always take at Markowski.

investments. AI is here to stay. Companies are all in when it comes to purchases. Again, what the multiples will end up being, I don’t know. I don’t know. Yeah, is it still a bit of a wild west? It is. but it’s nowhere near the excesses of

the dot coms when we were talking, you know, online retailers and other things that quite frankly, you looked at what the possibilities were. You know, kind of saw right through that. As far as AI is concerned, I use it to a certain degree. More and more people are actually going to AI for searches. It most certainly helps me out.

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with I pump out so much content and summarize and things and making sure that they’re there in the right places. Does it have its limitations? Absolutely. But my take from the people that I speak to, again, I deal with small business owners around the country, they’re thrilled with it.

They’re thrilled with it as an example, you know, speaking with, you know, guy involved with trades, gentlemen that actually helps various different trade plumbers, electricians, landscapers, pool companies, whatever it may be, and how they go about using AI to create greater efficiencies and, you know, structuring their day and how time is spent over the course of the week. And, you know, some of the things that he was, you know, showing me, it’s,

It’s extraordinary. And it’s helping these companies become more efficient. So no, do I think it’s going anywhere? No, it’s not. It’s not. Do we still know who the big winners are gonna be? No, we don’t. again, vendor financing, because it is vendor financing. And again, it’s not as bad as it was back.

during the late 1990s by any stretch, we will be keeping our eyes on. Watchdogonwallstreet.com.