Nvidia are going to spend $500 billion on increasing their carbon footprint.

For context, the UN have estimated that it would cost $93 billion per year to end world hunger.

Anyway, hope you're all enjoying the heat wave.

https://www.bbc.co.uk/news/articles/c78gr0jv0mdo

#NVidia #ClimateCollapse #ClimateChange #ClimateCatastrophe #ClimateEmergency

@statsguy From pictures of crap stage mentalists ("Oracle" guy... what is he, the 29 steps?) to bad puppeteer (Nvdia guy) and all the other tropes in between. When is the Sorcerer's Apprentice going to get his comeuppance?

@statsguy In a way, it's not even (entirely) Nvidia's fault - it's their enablers in the institutional investment community and their rapacious greed; the corporate banks who continue to lend to them; and governments who refuse to legislate.

I'm not saying they're innocent - far from it - but the entire support network that allows these bubbles (and the monsters who profit from them) to be created in the first place needs taxing into oblivion.

@MiaMarkTwo @statsguy

NVIDIA has a speedrun of the problem that a lot of companies had.

They started making a fairly niche product: a 3D accelerator for gaming. This was something that was a fairly limited (but high margin) market. They were able to take a lot of the graphics workstation market because their products were not quite as good but a lot cheaper than existing players there, but that had always been a tiny market.

They were lucky because the costs were coming down and the time that they entered the market was about the time it was possible to create something that was just about cheap enough to go from the gamer market that 3dfx targeted to the wider every-computer-needs-one market.

That gave them a load of early growth. The market likes growth.

Then they released programmable shaders and the entire GPGPU movement started. That let them sell parallel compute engines that operated on regular data to a load of places that didn't care about graphics. Not the highest volume, but a larger market than 3D workstations ever were and similar margins.

That gave them more growth. The market likes growth.

When they were starting to reach market saturation, they released cards that were good at cryptocurrency 'mining'. Suddenly there was a path that let people buy NVIDIA GPUs and use them to create money (or, at least, things people were willing to exchange for money).

And that gave them more growth, albeit driven by an obvious bubble. The market likes growth.

But that bubble was going to burst. Augmented reality looked like a possible replacement but the people in that space were mostly building their own low-power chips (and it failed to take off). They needed a new bubble. Fortunately, someone combined the knowledge that you could represent layers in feed-forward neural networks as matrixes and then run them very quickly on a machine that was good at doing independent floating-point operations over regular data structures. And so you could run large feed-forward neural networks on GPUs. Bubble opportunity! So they hyped the hell out of that new use case.

And that led to a load of new orders. And that's growth! The market likes growth.

Unfortunately, none of their customers were actually making money from the GPUs used for running these neural networks. Unlike the previous bubble (where people were making money, though mostly from things that looked a lot like scams), this one needed to be fuelled by throwing more capital in. So they started doing all sorts of exciting deals with this kind of structure:

1. NVIDIA invests in a company, marking it down as capital expenditure.
   
2. The company turns around and promises to spend all of the money on NVIDIA GPUs.
3. NVIDIA reports that money as revenue.
4. The market sees increased revenue and knows that the value of a company is some multiple of its revenue, so the value of NVDA increases by more than the cost of the initial investment.
5. NVIDIA sells enough shares to cover the investment.

Apparently this is legal, but it absolutely shouldn't be. But each new investment loop like this generates more customers, which signals growth, and the market loves growth.

The systemic problem is that the stock market redirects capital to things that have the potential for growth and this gives a huge incentive for any company to demonstrate growth. A company that has saturated its market and is consistently producing good products is less attractive to investors than one that is in a growing area. If you are in a market that is saturated, you need to either keep entering new markets (which, again, should be triggering antitrust laws because cross subsidies are illegal and about the only way you can successfully do this) or provide some rationale to the stock market of why your saturated market can grow.

But I don't think that absolves NVIDIA. They have been doing a lot of deeply unethical things and I hope a future SEC (or European regulators, once they realise Trump's SEC is a waste of space) will determine that they were illegal. And I will absolutely remember the people who were celebrating Huang while he was doing all of this.

@david_chisnall
> the stock market redirects capital to things that have potential for growth

ok, but if you don't have potential for growth, do you have any use for more capital?

Ok I guess the problem is that instead of reaching steady state, you would get less capital, as investors move it to somewhere where it can grow

OTOH, if you're a profitable business, you should be able to pay out dividends, right? Shouldn't that keep some if the investors in?
@MiaMarkTwo @statsguy

@wolf480pl @MiaMarkTwo @statsguy

I didn't say it's an easy problem to solve.

The big issue is that it's very hard to make that transition. While you're growing, you can raise capital by issuing shares without actually selling noticeably more of the company. Rapidly growing companies lower their salary costs by doing this. Moderately senior folks at big tech companies get half or more of their pay as shares. This means that the salary bill (one of the biggest cost centres for most companies) is reduced by around 50% while you're growing: you issue more shares, it doesn't measurably depreciate the stock price, you give them to employees, and a load of the employees hold them because they expect the share price to go up.

But as soon as the perception of growth declines, the stock price dips or remains flat. Now, issuing new shares will lower the price of existing shares. You either need to issue more shares to cover payroll (which causes the price to go down) or start paying real money. And that's a sudden drain and can make previously profitable activities now loss making.

@david_chisnall @wolf480pl @statsguy Well that seems like a very obvious loophole that should be closed - the issuing of shares as salary. Idk how long that's been a thing, or whether it exists outside the tech industry, but it sounds like gaming the system (pardon the pun) to me.

@MiaMarkTwo @wolf480pl @statsguy

It predates the tech industry. But issuing the shares as salary is not very different from issuing shares to pay for salary. There are a few tax reasons for doing it (including some very stupid loopholes in the UK that Palantir exploits) but the overall idea that a growing company can issue some new shares to cover their payroll, whereas a steady-state company can't, can be fixed only if you prevent companies from issuing new shares at all, and that means that you eliminate the utility of the stock market.

If you have a company whose share price is growing at a rate of 10% a year (not huge), and it issues 1% new shares every year, then that will dent the growth rate, but it will still be growing. If the company is worth $1B, that's $10M / year that the company can raise basically for free. That's quite a few people that you can pay entirely out of share issuing. The larger the company is, the more it can raise like this. A $1T company can raise $10B/year with the same scale of stock issue. And that pays for a lot of operational expenses.

You might say 'well, restrict companies to spending money raised from share sales on capital expenditures'. But that ignores the fact that money is fungible.

@wolf480pl @david_chisnall @statsguy And "potential" is the operative word here. The markets are addicted to the idea of the shortest possible timescale between investment and profit, which of course makes sense until you scale it up to where it's led us. They'll literally belive the hype, without any real analysis of the projected timeline for profit, and hollow out other more viable options by chucking all their eggs in a couple of very ropey baskets.

@MiaMarkTwo
although now that I think of it...

how can investors remov capital from a company?

obviously they can sell their stocks at lower and lower prices, but that doesn't remove any money from inside the company...

can the shareholders force stock buybacks?
@david_chisnall @statsguy

@david_chisnall
add EU-fund-style restrictions on how the purchased assets can be used /hj
@MiaMarkTwo @statsguy

@wolf480pl @MiaMarkTwo @statsguy

No, there is no mechanism to do this. They can remove their capital from a company by selling the shares. A company can return capital to shareholders by issuing a dividend or doing a stock buyback.

Stock buybacks were illegal for a long time. They're logically equivalent to dividends (each shareholder gains some capital) but they're taxed in a very different way (dividends are taxed as income, increase in the share price isn't taxed at all until you sell and is then taxed as capital gains).

The rights of shareholders are governed by the company's bylaws. They may include the right to force the company to do buybacks or issue dividends but I've never seen that. The minimum set of accountability that a company has to its shareholders is that they can appoint and dismiss directors. Directors, in turn, can appoint or dismiss the company's senior leadership. So the accountability to shareholders is always at two layers of indirection.

Shareholders can also typically vote to approve or reject motions brought by the board, but most companies are structured to reduce the direct accountability.

That also works in the other direction. Shareholders are not held legally accountable for the actions of a company. The board and management may be. At most, shareholders may lose all of the money they invested in a specific company.

@david_chisnall @wolf480pl @statsguy I don't have a problem with eliminating the utulity of the stock market (/facetious) 😁

Surely the very simplest measure would be to time-limit companies' ability to do this? Or a top limit on how much can be raised in this way? Especially when their CEOs are multi-billionaires. And does it really go to "operational expenditure" in its entirety? Or are there "loopholes" that allow some of it to pay the rent on a £300m yacht?

@MiaMarkTwo @wolf480pl @statsguy

Surely the very simplest measure would be to time-limit companies' ability to do this?

What kind of limit? Once per year is fine (it's what most companies do).

Or a top limit on how much can be raised in this way?

There's a practical limit already: if you issue too many shares, you dilute the existing shares and the value goes down. But, if a company can convince its investors that it has an opportunity to grow, its investors want it to take that opportunity. To give a concrete example:

Microsoft bought GitHub for $7.5B. But they did so by paying in MSFT shares. The day after the acquisition was announced, Microsoft's market cap jumped by about $7.5B. If they'd issued new shares specifically to pay for it (they actually didn't increase their normal share issuing), this would have cost them nothing. If a company can buy something for $1 that increases the value of the company by $1, investors are happy with this.

And does it really go to "operational expenditure" in its entirety? Or are there "loopholes" that allow some of it to pay the rent on a £300m yacht?

Operational expenditure just means things you pay where you don't get some asset in return, contrasted with capital expenditure where you do. Renting a yacht for the CEO is OpEx (buying a yacht for the CEO's use is CapEx, though it will then incur OpEx for maintenance, crew salaries, and so on).

@david_chisnall @wolf480pl @statsguy OK, you're wasting your time here. Capitalism is the problem, no matter how you try to justify it. If there were any chance of the structural problems being solved by regulation (voluntary or otherwise), then global scandals like the Panama and Paradise papers would have had that effect. Regulators and politicians are so invested in or dependent on the status quo that it's futile to mess around at the margins of this broken system.

@MiaMarkTwo
I think even if the system is broken, it's worth spending time trying to understand it, and I think
@david_chisnall is doing a good job explaining it here.

Should I untag you if I later want to continue this discussion?

@statsguy

@david_chisnall @wolf480pl @statsguy I think there's a case to argue that shareholders (especially institutional ones) in some industries - oil and gas, for example - *should* be held accountable in the same way that boards and management (aren't) being at present.

I'll also give you a heads-up here: trying to defend extreme free-market capitalism to a socialist is probably a waste of your time. If there were any intention to fix these things, it would have already happened.

@MiaMarkTwo @wolf480pl @statsguy

To be clear: I'm not trying to defend extreme free-market capitalism. I'm trying to explain when regulations that would prevent this kind of thing are really hard to get right.

The market economies of the '50s with strong regulation worked much better than the ones today but you can't simply reintroduce those regulations because (even before they were completely dismantled) people figured out a load of loopholes in them. You need to think adversarially.

And I don't see market economies as being incompatible with socialism. They're the opposite of a centrally-planned economy.

And that's one of the reasons I'm very hesitant about any restrictions on share issuing as compensation. I want companies to pay their workers in shares so that workers own more of (ideally, most of) the company. Imagine, for example, a worker-owned cooperative that gives employees shares for every year they work there, pays excess profits out as dividends, and, when employees leave, requires that they transfer administration of their shares to the company's pension fund, where dividends will be used to service the pension obligations. How would any regulation you consider affect such a company? Personally, I want to have regulations that give companies like this a competitive advantage.

I thought I'm making up a conspiracy theory around NVIDIA deliberately looking for bubbles to inflate - AI turned out to be a great one - after the crypto bubble bursted. It seems @david_chisnall agrees (sort of):

RE: https://infosec.exchange/@david_chisnall/117075838205635406

@buherator

I don't think they architected it, I think they looked for the next bubble to jump on and, once one of them started paying off, did their absolute best to inflate it.

@statsguy

Nope, we are all out and about "enjoying" evacuating from the wildfires caused by fossil fuel climate change.

The AI industry is funded by the fossil fuel industry.
https://www.wired.com/story/chevron-williams-driving-data-center-boom/

https://www.wired.com/story/trump-energy-industry-ai-fossil-fuels-pittsburgh-summit/

https://www.desmog.com/2025/12/11/the-koch-network-is-pushing-trump-to-accelerate-ai-documents-show/

https://www.wired.me/story/new-gas-powered-data-centres-could-emit-more-greenhouse-gases-than-entire-nations

https://www.washingtonpost.com/technology/2025/05/13/trump-tech-execs-riyadh/

https://www.bloomberg.com/news/articles/2026-07-28/koch-said-to-weigh-15-billion-sale-of-data-center-player-edged

https://www.bloomberg.com/news/articles/2024-11-06/saudis-plan-100-billion-ai-powerhouse-to-rival-uae-s-tech-hub

https://truthout.org/articles/trumps-epa-wants-to-fast-track-construction-of-gas-plants-data-centers/

https://futurism.com/artificial-intelligence/pollution-ai-data-centers-severe

https://www.nytimes.com/2025/10/27/technology/saudi-arabia-ai-exporter.html

https://thediplomat.com/2026/07/nvidias-silent-ai-colonialism-is-trapping-east-asia-in-a-fossil-fueled-hell/

https://www.bloomberg.com/news/articles/2018-04-06/google-thiel-stand-out-in-saudi-prince-s-silicon-valley-tour

@david_chisnall
what if there was a separate stock exchange / index / whatever that is only for companies that do not issue new shares, and pension funds are only allowed to invest in those?
@MiaMarkTwo @statsguy

@david_chisnall Yeah, "architecting" is not the best word here...

@wolf480pl @MiaMarkTwo @statsguy

There are already restrictions on what pension companies can invest in, so you wouldn't necessarily need a separate exchange, you could just make that a rule. But let's think about what it would mean:

If you are open to pension investment, you can't issue new shares, which means your only ways of raising capital are from revenue and loans. Revenue raises capital more slowly, so you'd probably take out loans if you wanted to expand. Because loans are non-dilutive, they cost more to service, so a company with the same starting point as you that could issue shares would be able to offer the same goods or services for a lower cost.

But also, if taking pension-fund investment meant that you couldn't issue more shares, why would you ever want to take pension-fund investment? The only people who would make money from a pension fund investing in you are existing shareholders, the company can't raise more money as a result of this investment. So companies would actively avoid that kind of investment.

So I'm not sure that this would solve any problems.

@david_chisnall
if you're not growing and you're paying dividends, the fund would get dividends... but yeah I agree there's little reason for the comoany to want a fund to invest in it...
@MiaMarkTwo @statsguy