Jon Keegan, of Robinhood’s Sherwood News:

A Sherwood News analysis shows that the breaks afforded to Meta on just the sales tax of GPUs would come out to more than $3.3 billion — enough to build 33 new high schools, pay the salaries of all the state’s public school teachers for more than a year, or pay for more than seven years of the Louisiana State Police budget. (The secretary from the Parish committee that approved the financing plans declined to comment, and the chair of the committee didn’t respond to requests for comment.)

This is the very same project where Jonathan Weil, of the Wall Street Journal, found “aggressive accounting” that “strains credibility”. Neither of these advantages would be possible for a less-resourced competitor. Meta is a company so rich it benefits immensely without carrying nearly as much risk as the scale of this project would imply.

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Tabby Kinder in New York and George Hammond, Financial Times:

OpenAI has signed about $1tn in deals this year for computing power to run its artificial intelligence models, commitments that dwarf its revenue and raise questions about how it can fund them.

Emily Forgash and Agnee Ghosh, Bloomberg:

For much of the AI boom, there have been whispers about Nvidia’s frenzied dealmaking. The chipmaker bolstered the market by pumping money into dozens of AI startups, many of which rely on Nvidia’s graphics processing units to develop and run their models. OpenAI, to a lesser degree, also invested in startups, some of which built services on top of its AI models. But as tech firms have entered a more costly phase of AI development, the scale of the deals involving these two companies has grown substantially, making it harder to ignore.

The day after Nvidia and OpenAI announced their $100 billion investment agreement, OpenAI confirmed it had struck a separate $300 billion deal with Oracle to build out data centers in the US. Oracle, in turn, is spending billions on Nvidia chips for those facilities, sending money back to Nvidia, a company that is emerging as one of OpenAI’s most prominent backers.

I possess none of the skills most useful to understand what all of this means. I am not an economist; I did not have a secret life as an investment banker. As a layperson, however, it is not comforting to read from some People With Specialized Knowledge that this is similar to historically good circular investments, just at an unprecedented scale, while other People With Specialized Knowledge say this has been the force preventing the U.S. from entering a recession. These articles might be like one of those prescient papers from before the Great Recession. Not a great feeling.

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