Better Offline Monologue: OpenAI and NVIDIA's Deal Is BS
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Sep 26, 2025 The discussion kicks off with skepticism towards NVIDIA's $100 billion investment claims, revealing hidden conditions. Ed breaks down the shaky economics behind OpenAI's need for $600 billion, emphasizing the struggles with real data center costs and leasing models. Concerns arise about the opaque structure of GPU leasing and potential risks akin to past financial debacles. The conversation warns of a looming bubble in AI investments, highlighting the dangers of overconcentration of capital on a company facing significant losses.
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Confusing Early Coverage Of The Deal
- Zitron recounts confusion over press reports claiming NVIDIA would 'invest $10 billion with the first gigawatt' then flip-flopping.
- He uses this to show the announcement lacked clarity and likely wasn't finalized.
Big Numbers, Little Immediate Cash
- The NVIDIA–OpenAI announcement is mostly conditional PR and not an immediate $100B cash injection.
- Ed Zitron shows most funding is gated on OpenAI building gigawatts of data-center capacity they haven't constructed yet.
Data Centers Are Enormously Expensive
- Building one gigawatt of compute currently costs billions and takes years to complete.
- Zitron calculates OpenAI needs roughly $125B for data centers plus about $200B for GPUs, making the public math implausible.