Know Your Risk Podcast Incestuous AI Capex
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Sep 22, 2025 Chase dives into the concerning circular financing between major AI players like Nvidia and OpenAI. He highlights the risks that heavy vendor financing poses for the future of AI development. The discussion also covers how recent tariffs are complicating U.S. manufacturing efforts and job growth. Additionally, there's a keen analysis of the Argentina crisis, potential defense shifts, and the fragmentation of global alliances, prompting a rethinking of defense spending strategies.
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Incestuous AI Capex Cycle
- Chase Taylor warns the AI capex cycle is "incestuous" with vendors financing their own customers, creating circular revenue flows.
- He argues this vendor-financing model is risky for Nvidia if it must fund customers to sustain chip demand.
Margins Masked By Internal Financing
- Chase Taylor questions whether Nvidia's margins hold if it must effectively rebate customers to buy its chips.
- He calls the approach a poor long-term business strategy and a valid cause for investor concern.
Reconsider Tariff-Driven Manufacturing Costs
- Chase Taylor warns tariffs raise input costs and can derail onshoring and domestic manufacturing projects.
- He implies policymakers should reevaluate tariff structure because higher costs are already canceling factories and jobs.