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  • Hacker News
  • Hey guys we're trillionaires now too btw
    by downrightmike
  • Last time this happened Alan Greenspan called it irrational exuberance on TV, then we all lost our life savings...
    by josefritzishere
  • I have a theoretical question. At what point does capitalism become the other side of the coin from communism.

    Like there's communism which is centralized planning and the state owning the means of production.

    Then I think there's Adam Smiths ideal form of capitalism that I think can loosely be described as independent demand signals allocate resources throughout the economy.

    What happens when a capital accumulates in a smaller pool of folks who choose how to allocate those resources. Silicon Valley isn't responding to demand, it's essentially centrally planning where to assign resources to create demand.

    by techblueberry
  • That doesn’t sound right. Silicon Valley is clearly responding to massive demand for AI services. The reason Nvidia has so much money is that people are paying them for something only they can make. It’s not like they’re issuing stock into a meme stock spike or something. They’re selling hardware that companies are demanding in large quantities because those companies need the hardware to provide services that people and companies want so badly that every marginal hardware dollar spent earns a large number of service dollars.

    This is probably the most demand-mediated response of all time. The natural form of that is that the guy who we give lots of money to for his stuff is going to have lots to spend.

    by arjie
  • > Then I think there's Adam Smith's ideal form of capitalism

    People have this idea that Adam Smith "idealized" capitalism or that the Wealth of Nations is some sort of manifesto. It's much more of an empirical research (by the standards of the time) with observations and findings. It's equally useful if you're a communist or a free-market capitalist.

    Adam Smith himself was fairly skeptical of massive corporations capital accumulation:

    > "The directors of such companies, however, being the managers rather of other people's money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own. Like the stewards of a rich man, they are apt to consider attention to small matters as not for their master's honour, and very easily give themselves a dispensation from having it. Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company."

    by legitster
  • > What happens when a capital accumulates in a smaller pool of folks who choose how to allocate those resources. > Silicon Valley isn't responding to demand, it's essentially centrally planning where to assign resources to create demand.

    Silicon Valley is not centrally planned. The people at Microsoft did not go to a committee and ask the people who ran Sun Microsystems if it would be okay to release Windows NT. They mailed the CEO of Sun a coffin (1).

    1. https://www.pcgamer.com/software/windows/the-team-behind-win...

    by balarjin
  • You can do a lot of central planning if you can convince investors to give you a large enough pile of money, but it still doesn't compare to what the US government can do. You're not going to fund social security that way.
    by skybrian
  • The demand signals never allocated the resources, a small number of people always did. Those people react to the demand signals (and they still do).

    IMO a more important question is: what happens when the market power of a segment of society grows much greater than the rest? In a "K-shaped" economy, the top 20% have so much spending power (and even more future spending power) than their demand signals can overwhelm the rest. Then IMO the market won't respond to the demand signals of the bottom 20% and capitalism stops working for all. Add to that the possibility of AI automating more and more work and you have a system that only works for folks at the tops.

    This isn't a resource allocation problem! it's a purchasing power distribution problem.

    by fra
  • Fun fact: Internally all corporations are organized by central planning
    by cousinbryce
  • "....It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it." - Adam Smith, final paragraph of Book I, An Inquiry into the Nature and Causes of the Wealth of Nations

    Warning about companies being able to command regulation on themselves. We're far past anything Adam Smith would have thought was a good idea for how we organize capital and commerce.

    by Avicebron
  • I have a theory that this issue happens because we put money into the stock market for our pension. This creates a concentration of wealth/money into a relatively few organizations. I think money and wealth should be created more locally.

    Of course, this is very idealistic and simplistic.

    However, what did people think was going to happen when the common wisdom is to put your money into an index and then shut up? It simply cannot be true that putting money into the index means you win. There's cost somewhere, a parasite on the system, that is going to come due at some point.

    by anon-3988
  • Archieve link: http://archive.today/98KYg

    Can anyone explain how Nvidia is not shaping up to the modern GE? This plus it's recent entry into making a PAC does not bode well

    by tolugenius
  • So, Nvidia are backstopping $100B for the Ohio project, yet at the same time OpenAI are developing their Jalapeño processor, which will mean it will no longer need Nvidia GPUs for inference. That does not really make any sense to me.
    by lefty2
  • He is baaaack:

    "Nvidia is running on borrowed time" - https://youtu.be/k44OmbYqLzk

    by tcp_handshaker
  • Ohio billionaire Les Wexner (yes, that Wexner) had an early investment in CoreWeave.

    https://www.forbes.com/sites/iainmartin/2024/08/06/how-victo...

    Data centers are being built on his land in New Albany:

    https://www.wsj.com/tech/ohio-intel-chipmaking-investment-st...

    So either Nvidia is dangling a carrot in front of the Epstein people in the Trump admin (Trump, Lutnick, etc.) or it is in on it. I wonder where Wexner got the CoreWeave tip.

    by ad12aBg
  • Even if Jalapeño is successful it will probably take multiple generations until it’s competitive.
    by pier25
  • Mcdonald's famously invested in Chipotle as a risk mitigation strategy. If consumers want healthier fast food, sales at Mcdonald's will go down, and sales at Chipotle will go up. Investing in something anti-correlated with your business lowers risk by paying you when your own business is hurt by a surprise.

    If you can see the future, by all means invest in the one stock that will go up the most. If you can't see the future, diversifying into assets that have negative correlation (one goes up if the other goes down) lowers volatility at the cost of limiting possible upside.

    Nvidia has a massive pile of money. Where should they invest? If they believe in what OpenAI is doing, investing in it makes sense no matter what hardware OpenAI chooses. If OpenAI manages to make something much better than Nvidia hardware, Nvidia's sales will go down as the value of OpenAI goes (way) up. If OpenAI fails to make something as good as Nvidia hardware, they buy Nvidia hardware.

    It is odd how internet commentators seem to think that companies make investment decisions as a way to root for a team. They do not. That is not how finance professionals think!

    by balarjin