Would that be the most expensive single thing ever built? The ISS cost around $150B and is commonly said to be the most expensive single item, but that does include running costs.
trollbridge 25 minutes ago [-]
Yes, if this thing ever gets built, it will set a whole bunch of new records.
If it doesn't get built, it will still set a bunch of records; some of them probably quite infamous.
It is hard to describe the ridiculous scale they are trying to do there. For comparison, typical electrical demand is 17 GW and peaking to 25, with total generation capacity being 30 GW. That includes us-east-2, which is not a small data centre (consumes probably right around 2 GW, so represents about 10% of the state's power demand).
So they're talking about a project that would increase total power consumption in the state over 50%... in addition to building multiple nuclear power plants to fund it. Predicting 2,500 permanent jobs in a county of 27,000 total people, so that's a lot of people moving in.
cmiles8 3 hours ago [-]
Nvidia is turning into a savings and loan company that happens to design computer chips on the side. What could possibly go wrong.
insaneirish 1 hours ago [-]
As it's said... "Every company eventually becomes a bank."
HDBaseT 3 hours ago [-]
The loans will just take longer to repay. There is a market for Anthropic & OpenAI, it just likely doesn't have the 200B profit each year required for the maths to make sense.
If shit hits the fan, the companies collapse, then Nvidia gets their money from the investors anyways.
jacquesm 3 hours ago [-]
NV might end up owning them.
3 hours ago [-]
asveikau 2 hours ago [-]
I'm hoping when the shit hits the fan, you can get a sick GPU for cheap.
cmiles8 51 minutes ago [-]
More likely is communities will end up with a bunch of half-built abandoned datacenter projects.
fwipsy 13 minutes ago [-]
Isn't that what they said?
gonzo41 2 hours ago [-]
it'll be a rack based GPU without video ports. The only thing getting sick GPU's will be landfill when they all burn out and the data center rationalization happens.
kees99 1 hours ago [-]
More like rack-sized GPU that takes in half-megawatt of power as 800 volts DC, and requires 10 gallons per second of liquid cooling or it'll catch fire.
u1hcw9nx 6 hours ago [-]
I would like to see the numbers.
If Nvidia sells hardware for $100B with 75% cross margin, and provides $50 billion in backstop for that same hardware, it would be still be nicely profitable deal ($25B) if the backstop capacity would be a total write-off recovering $0. Reselling that capacity in some large discount below already low backstop price would increase the profits.
It's all those pension funds, sovereign wealth funds and Softbank getting into that $500 billion deal that will be hurt.
ColdStream 4 hours ago [-]
Pretty much, I have said it for a while now, Softbank and Oracle are the ones I would be worried about. Both of them have put their companies wealth behind this, if it goes down so will they.
Others have played it fairly smart in terms of insulating potential issues.
throwaway27448 4 hours ago [-]
A better world is just a few steps away
pjjpo 4 hours ago [-]
SoftBank has always managed to squeeze by after every mistake selling some early huge wins Alibaba, Nvidia, arm. Wonder if they still have any of those left in the back pocket.
jgalt212 3 hours ago [-]
Indeed, Masa has more lives than a cat.
karlgkk 1 hours ago [-]
Have you seen his investor presentations? He is no longer building his war chest and is now executing on SoftBank’s 400 year plan
That was terrifying. This is representative of who's funding all of this?
ColdStream 12 minutes ago [-]
As soon as you said Goose, I knew exactly what this was going to be.
selectodude 46 minutes ago [-]
That shit looks like something that they’d show in a Netflix cult documentary.
NewJazz 6 hours ago [-]
Businesses aim to make the most profit possible with their resources. If they can make a 25% margin that is good, but if they can turn around sell thr same thing for a 50% margin, that is much better.
Basically what i am saying is maybe there is a better buyer than openai.
Taikhoom10 3 hours ago [-]
This is meaningless in the long run; the broader problem is the constant circular financing and "Fake profits".
It is not the first time, either; the capital cycle will prevail.
All economics is circular financing, that's how it works.
You pay Apple for a MacBook, Apple uses it to develop a better MacBook.
What goes wrong is leverage. We haven't seen much hint of the 10x leverage kind of deals that brought down the house in 2008.
anon7725 31 minutes ago [-]
Shouldn’t the analogy be “Apple lends you money to buy a MacBook. You pay Apple for a MacBook…”
Taikhoom10 2 hours ago [-]
Uh no, NVDIA helping startups get financing so they can buy NVDIA chips is inherently damaging because eventually the debtors will not help with the financing and startups will not be able to buy chips.
fooker 2 hours ago [-]
Again, this is how all of economics works.
A Toyota dealership arranges a loan for you. Through a bank for a used vehicle, sometimes through Toyota itself for new cars.
A house builder will routinely take on part of the loan providing burden to get some of the interest.
Even someone selling you their thirty year old house will often provide seller financing.
You may have ideological opinions against this, which is fine. There are billions of people, for example that are fundamentally opposed to the idea of interest. But like it or not, this is how it has worked for the last ~500ish years.
Taikhoom10 1 hours ago [-]
No, I get this; it is not a problem. It becomes one when they cannot pay back this financing, in the event that they cannot build a sustainable business, which they cannot, because the capital cycle leads to overinvestment, meaning the financiers cannot meet their returns.
It's a problem when there's 10x leverage AND the underlying asset massively deprecates in value.
Neither of those look likely yet.
2 hours ago [-]
senor_digimon 4 hours ago [-]
This is probably a lot more related to the fact they want to make GPUs an asset class. Nvidia is banking on the fact there will be an entire market that will guarantee whatever anyone needs.
trollbridge 22 minutes ago [-]
A rapidly depreciating asset class of something that loses almost all its value in a few years and can't be repaired?
chocolol 1 hours ago [-]
Ed Zitron might be right
behnamoh 5 hours ago [-]
In other words: the investments that were never going to happen are not going to happen.
ColdStream 4 hours ago [-]
While it is true they haven't lost anything, it does signal to shareholders, potential share holders and current VC's the direction of things.
6 hours ago [-]
Noaidi 6 hours ago [-]
The Möbius strip of AI financing continues…
sidewndr46 5 hours ago [-]
it seems much more like Relativity by M. C. Escher where no one is quite sure how to exit without bringing everything down with them?
gymbeaux 5 hours ago [-]
What would happen to Nvidia, Anthropic, OpenAI, if tomorrow someone released an open weights model on HuggingFace that matched performance and accuracy of Opus 5 running locally on an RTX 5070? That won’t happen tomorrow, but it will likely happen someday… what’s the plan beyond “don’t be the one holding the bags?”
trollbridge 19 minutes ago [-]
If I could have shown up somewhere in 2022 with a Mac Studio M1 Max w/ 64GB of RAM running Qwen-3.6-27B or 35B-A3B, I would have pretty much been a demigod - to a degree far more impressive than being able to run Opus 5 locally today.
So yes, I think your scenario is likely to eventually happen, but there will be a much more powerful, capable frontier model then.
jimbo808 3 hours ago [-]
There’s no reason to assume frontier-level intelligence eventually collapses all the way onto a midrange consumer GPU. In fact, there are quite a few reasons not to assume that (information-theoretic constraints, etc).
fooker 2 hours ago [-]
There's no information theoretic constraint we know of that prevents this. You will almost surely win a Turing award if you can prove this.
It's almost a given that whatever is frontier intelligence today will run on a potato in a few years.
jimbo808 2 hours ago [-]
Kinda silly to follow your “prove it” challenge with an absurd claim you most certainly cannot prove, much less support with evidence.
fooker 2 hours ago [-]
It was not a "prove it" challenge.
I'm pointing out that there's no known information theoretic constraint about the impossibility of frontier AI models being improved to fit/run on a small GPU.
Please do not make up plausible sounding science facts.
amazingamazing 2 hours ago [-]
I will not claim a 5070, but there is already evidence in nature that you can get very good general intelligence with an order of magnitude less wattage.
There are constraints of course- training takes way longer.
christophilus 2 hours ago [-]
But, it could happen for a coding-focused model, or an accounting-focused model, etc. most tasks only need a subset of the total model to be done effectively.
jkahrs595 2 hours ago [-]
Workloads will inflate just as they have been. Remember when llm assisted development used to be good only for a function, then a whole file, then a handful of files, then a code base, then a full stack, etc etc etc.
People will claim to have “enough” even though they already have the equivalent of last years capabilities locally.
ColdStream 4 hours ago [-]
Those companies will be quick to copy the tech, inference cost would plummet and there is a greater chance that these companies could make it to solvency. At least in the short term. Long term it might not be so great as consume hardware catches up.
notatoad 2 hours ago [-]
probably not all that much... the market would dip, just like every time a new open weights model gets announced. but hundreds of millions of people aren't going to immediately self-hosting their own models.
the biggest winner in that scenario would be ai providers, who suddenly have a capable model that they can serve much more efficiently. and the incumbents have a whole lot of compute. wouldn't anthropic and openAI just start offering that open weights model at prices that nobody else could compete with?
zhivota 2 hours ago [-]
They could but then their valuation is no longer justifiable, which breaks a lot of things downstream (loans being the biggie). They'd rather lose money than start making money in a non defensible way.
martinald 4 hours ago [-]
Nothing would really change IMO? 99% of users don't have anything like a RTX5070 (mobile especially).
Even if it did, it still doesn't make much economic sense running a model locally vs on a datacentre.
For example, I managed to just about squeeze a Q2 quant of Qwen 3.7 27b on my 9070XT. I get around 60tps decode (slightly faster prefill). _but_ it uses 300W of power to do so. At UK electricity rates of 30c/kWh this works out at something like 42c/MTok. I can get far far better models on openrouter cheaper than that, plus I'm not horrendously constrained on context length.
protocolture 4 hours ago [-]
I dunno a lot of things said about AI economics sound like an IBM executive making reassuring statements about their terminal/mainframe business before the personal computer took off.
Like even if you run it in a datacenter in this scenario, you could do it on a cheap GPU instance in Azure, you still wouldnt need OpenAI or Anthropic specific clouds.
>uses 300W of power to do so.
There are plenty of people with phat electricity pipes in their on prem server rooms that have been vacated for cloud. Companies who want the benefits of AI but dont want the risk of sending their data to foreign API endpoints.
lisplist 3 hours ago [-]
If you could run Opus 5 on a 5070 then the labs must have achieved RSI at that point
fooker 2 hours ago [-]
> on an RTX 5070
RTX 5070 prices go up ~N times. Nvidia makes more money because it's easier to make these things than it's to make a GB300.
nl 4 hours ago [-]
It seems very very unlikely that an Opus 5 matching local model that runs on a 5070 will be released within the next 5 years (I don't want to say "ever").
If it does happen then NVidia will sell a lot of 5070s though!
milkshakes 4 hours ago [-]
inference is the cheap part; training is expensive. what compute infrastructure would train this mythical magic model?
ElProlactin 3 hours ago [-]
Exactly. If OpenAI and Anthropic didn't have to train new models, they'd (probably) be instantly profitable and with good margins.
drivebyhooting 4 hours ago [-]
Inference time scaling means whoever had the most compute has the highest intelligence model.
d_sem 4 hours ago [-]
I guess I'd like to understand the technical reasoning on how you think an how an Opus 5 could over time fit on an RTX 5070.
There's a release from DoE about it: https://www.energy.gov/articles/fact-sheet-department-energy...
That's a horrible amount of gas energy generation.
https://www.datacenterdynamics.com/en/news/openai-in-talks-t... has more details. The whole campus build could be as much as $500B.
Would that be the most expensive single thing ever built? The ISS cost around $150B and is commonly said to be the most expensive single item, but that does include running costs.
If it doesn't get built, it will still set a bunch of records; some of them probably quite infamous.
It is hard to describe the ridiculous scale they are trying to do there. For comparison, typical electrical demand is 17 GW and peaking to 25, with total generation capacity being 30 GW. That includes us-east-2, which is not a small data centre (consumes probably right around 2 GW, so represents about 10% of the state's power demand).
So they're talking about a project that would increase total power consumption in the state over 50%... in addition to building multiple nuclear power plants to fund it. Predicting 2,500 permanent jobs in a county of 27,000 total people, so that's a lot of people moving in.
If shit hits the fan, the companies collapse, then Nvidia gets their money from the investors anyways.
If Nvidia sells hardware for $100B with 75% cross margin, and provides $50 billion in backstop for that same hardware, it would be still be nicely profitable deal ($25B) if the backstop capacity would be a total write-off recovering $0. Reselling that capacity in some large discount below already low backstop price would increase the profits.
It's all those pension funds, sovereign wealth funds and Softbank getting into that $500 billion deal that will be hurt.
Others have played it fairly smart in terms of insulating potential issues.
Goose value 71 here: https://group.softbank/media/Project/sbg/sbg/pdf/ir/investor...
Basically what i am saying is maybe there is a better buyer than openai.
It is not the first time, either; the capital cycle will prevail.
https://s-1.vercel.app/posts/the-capital-cycle-theory/
You pay Apple for a MacBook, Apple uses it to develop a better MacBook.
What goes wrong is leverage. We haven't seen much hint of the 10x leverage kind of deals that brought down the house in 2008.
A Toyota dealership arranges a loan for you. Through a bank for a used vehicle, sometimes through Toyota itself for new cars.
A house builder will routinely take on part of the loan providing burden to get some of the interest.
Even someone selling you their thirty year old house will often provide seller financing.
You may have ideological opinions against this, which is fine. There are billions of people, for example that are fundamentally opposed to the idea of interest. But like it or not, this is how it has worked for the last ~500ish years.
https://s-1.vercel.app/posts/the-capital-cycle-theory/
Neither of those look likely yet.
So yes, I think your scenario is likely to eventually happen, but there will be a much more powerful, capable frontier model then.
It's almost a given that whatever is frontier intelligence today will run on a potato in a few years.
I'm pointing out that there's no known information theoretic constraint about the impossibility of frontier AI models being improved to fit/run on a small GPU.
Please do not make up plausible sounding science facts.
There are constraints of course- training takes way longer.
People will claim to have “enough” even though they already have the equivalent of last years capabilities locally.
the biggest winner in that scenario would be ai providers, who suddenly have a capable model that they can serve much more efficiently. and the incumbents have a whole lot of compute. wouldn't anthropic and openAI just start offering that open weights model at prices that nobody else could compete with?
Even if it did, it still doesn't make much economic sense running a model locally vs on a datacentre.
For example, I managed to just about squeeze a Q2 quant of Qwen 3.7 27b on my 9070XT. I get around 60tps decode (slightly faster prefill). _but_ it uses 300W of power to do so. At UK electricity rates of 30c/kWh this works out at something like 42c/MTok. I can get far far better models on openrouter cheaper than that, plus I'm not horrendously constrained on context length.
Like even if you run it in a datacenter in this scenario, you could do it on a cheap GPU instance in Azure, you still wouldnt need OpenAI or Anthropic specific clouds.
>uses 300W of power to do so.
There are plenty of people with phat electricity pipes in their on prem server rooms that have been vacated for cloud. Companies who want the benefits of AI but dont want the risk of sending their data to foreign API endpoints.
RTX 5070 prices go up ~N times. Nvidia makes more money because it's easier to make these things than it's to make a GB300.
If it does happen then NVidia will sell a lot of 5070s though!