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Politics : Sam's miscellany -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (1927)	12/26/2025 2:25:31 PM
From: Sam	Respond to of 1928

more on rental rates and hyperscalers financing Usta Stockman New: Today, 8:52 AM @bubbleking the problem isn’t whether rental rates should come down everyone agrees inference needs to get cheaper. The issue is why they’re coming down and what Jensen’s move actually signals. Rental rates are collapsing because the Nvidia Tax has pushed hyperscalers into a debt spiral. They financed H100/B200 refresh cycles at peak pricing, and now the revenue from inference doesn’t cover the debt service. That’s why we’re seeing H100 rates fall from $8/hr to $2/hr and B200s already under $3/hr. This isn’t healthy price discovery - it’s forced deleveraging. If Jensen were truly trying to reduce rental rates for customers, he’d be lowering margins. But he isn’t. The Groq deal doesn’t eliminate the tax - it repackages it. Nvidia is absorbing a cheaper inference architecture not to pass savings on, but to prevent that architecture from commoditizing inference outside Nvidia’s control. So yes, rental rates need to fall. But the fact that Jensen had to spend $20B to manage that fall tells you the real story: The current GPU economics don’t work, and Nvidia is pivoting to protect margins, not reduce them. bubbleking New: Today, 9:06 AM @Usta Stockman isn’t this simply the natural progression of the business model? When a new more powerful platform comes along the older one is less valuable. What is happening with respect to pricing on the leading edge? Usta Stockman New: Today, 9:15 AM @bubbleking I think we may be talking past each other. Your question assumes that the only way to interpret the data is through the lens of your thesis, which is exactly the dynamic I’m analyzing. I’m not defending a position so much as pointing out that the underlying economics don’t change just because we frame them differently. If rental rates are collapsing, debt loads aren’t clearing, and hyperscalers can’t service the hardware they already financed, then the cause - effect chain stands on its own. Whether we call it a “cycle,” a “bubble,” or something else doesn’t change the math. So, I’m not refuting your point - I’m saying the pattern you’re describing is the same pattern I’m describing. We’re just drawing different conclusions from the same signals. bubbleking New: Today, 9:18 AM @Usta Stockman I don’t have a thesis. But if what you say is true then there is no reason for these companies to buy more, so we should see evidence of that almost immediately. wboz New: Today, 1:26 PM \| @Usta Stockman well, nvidia is up and micron is down today, so i guess market is not any slower than me :) december puts options for MU $100 out of the money ($185) are about $20 this morning. I'll keep an eye on that. Feels too expensive to buy those puts though. as I learned from Nvidia - even if you get the short timing almost right like I did - the option price collapses anyway as you go along.