Deep dive on Nvidia circular funding
17 comments
·December 8, 2025kart23
The critiques of 'circular funding' don't really make sense to me. If you invest 20 billion and you get back 20 billion, your profit is the same. Sure your revenues look higher but investors have access to all that information and should be taking that into account, just like all the other financial data.
Michael Burry is betting against AI growth translating into real profits as a whole, not the circular funding.
mvkel
The problem is that stocks are often valued and traded on revenue growth, not profit (consider pagerduty, incredibly profitable with little revenue growth. Trading at 1.5X revenue). So circular funding generates stock price bumps when, as you said, there's no inherent value underneath. Creates a recipe for a crash.
Jare
Just because it's legal and in the open doesn't mean it's sound or not creating perverse incentives. Investors that "should be taking that into account" probably are, and hoping that they come out on top when the bubble bursts. That means pain for many people. Those are very valid reasons to point the finger and criticize.
myhf
It's certainly a problem when circular investment structures are used to get around legal limits on the amount of leverage or fractional reserve, or to dodge taxes from bringing offshore funds onshore.
londons_explore
Plenty of sneaky ways of using different accounting years offshore to push taxes forward indefinitely too, since the profit is never present at the year end.
biggoodwolf
if you invest 20 and get 20 then you got 0% profit
strangescript
Its so wild to me that people that should know better pretend that this kind of stuff doesn't happen in every industry.
tokai
At this scale? Why don't you give some examples.
shadowgovt
Pull our POV back far enough, and isn't "circular funding" just "The economy?"
Money circulates; it's what it does. The real question is to what extent circulation among a small group of firms is either collusion in disguise (i.e. decisionmaking by only one actual entity falsely measured as multiple independent entities) or a fragile ecosystem masquerading as a healthy one (i.e. an "island economy" where things look great in the current status quo, but the moment the fish go away the entire cycle instantly collapses).
doctorpangloss
> quietly arming themselves for a breakout.
If I wanted to read Gemini's opinion about this issue with the voice of a crank technical analysis, I would
Morizero
I appreciate the disclosures about Gemeni and Nano Banana, but does that start to feel a little like a conflict of interest or something similar in an article discussing their competition?
fwip
- **The Cash Flow Mystery**: ...
- **The Inventory Balloon**: ...
- **The "Paper" Chase**: ...
pinkmuffinere
I agree it's poorly written, but I'm _much_ more interested in whether it is correct, or incorrect. Do you believe it is incorrect?
givemeethekeys
Isn't news of Bury or Pelosi, or anyone else's investments usually 3 months old?
> However, Groq’s architecture relies on SRAM (Static RAM). Since SRAM is typically built in logic fabs (like TSMC) alongside the processors themselves, it theoretically shouldn't face the same supply chain crunch as HBM.
It's true SRAM comes with your logic, you get a TSMC N3 (or N6 or whatever) wafer, you got SRAM. Unfortunately SRAM just doesn't have the capacity you have to augment with DRAM which you see companies like D-Matrix and Cerebras doing. Perhaps you can use cheaper/more available LPDDR (NVidia have done this themselves with Rubin CPX) but that also has supply issues.
Note it's not really about parameter storage (which you can ammorotize over multiple users) it's KV cache storage which gets you and that scales with the user count.
Now Groq does appear to be going for a pure SRAM play but if the easily available pure SRAM thing comes at some multiple of the capital cost of the DRAM thing it's not a simple escape hatch from DRAM availability.