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387 points reaperducer | 2 comments | | HN request time: 0.433s | source
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crazygringo ◴[] No.45772276[source]
This is such a strange article -- there's nothing particularly unusual going on here.

The first example basically stands in for all of them -- Microsoft invests $13B in OpenAI, and OpenAI spends $13B on Azure. This is literally just OpenAI purchasing Microsoft cloud usage with OpenAI's stock rather than its cash. There is nothing unusual, illicit, or deceptive about this. This is entirely normal. You can finance your spending through debt or equity. They're financing through equity, as most startups do, and they presumably get a better deal (better rates, more guaranteed access) via Microsoft than via other random investors and then buying the cloud compute retail from Microsoft.

This isn't deceiving any investors. This is all out in the open. And it's entirely normal business practice. Nothing of this is an indicator of a bubble or anything.

Or take the deal with Oracle -- Oracle is building data centers for OpenAI, with the guarantee that OpenAI will use them. That's just... a regular business deal. What is even newsworthy about this? NYT thinks these are "circular" deals, but by this logic every deal is a "circular" deal, because both sides benefit. This is just... normal capitalism.

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1. jpollock ◴[] No.45772338[source]
The last time this hit the news, it was the dotcom bubble, and Nortel was in a similar position with startups, taking equity for equipment.
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2. crazygringo ◴[] No.45772388[source]
No, that's not the last time this hit the news. This happens literally all the time. Again, this is just business as usual. It's not specific to AI, it's not specific to tech, and it's nothing to do with bubbles.