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Sep 07, 2025
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The Information Forum Digest
The top posts from The Information's subscriber only community.
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Featured posts
Posted by Brian Demsey · Founder 3 hours ago
The $500 Billion Bug: How AI's Hallucination Economy Turns Failure Into Profit
Anthropic's $1.5 billion copyright settlement is...
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Top comments
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Josh Bersin
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Benioff has been a terrific cheerleader for AI but now reality sets in. All the hard work is in redesigning jobs, business processes, and customer experiences - it's not as easy as "buying a tool and turning it on." So it's not surprising that Salesforce's AI-centric revenues are lagging (much of their tech is quite dated).
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John Collins
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The Apple iPhone analogy reveals a fundamental misunderstanding of AI infrastructure complexity: an iPhone is a complete consumer product while an H100 GPU is a specialized component requiring billions in supporting infrastructure to be operationally useful. Martin's assertion that there's "surely a simpler way" for NVIDIA staff to use their own product misses that Lambda's infrastructure services (and CoreWeave's) ARE the simpler way, providing extreme power density management (100kW+ per rack), specialized InfiniBand networking, direct-to-chip liquid cooling, and orchestration software that would require massive capital misallocation for NVIDIA to replicate internally. NVIDIA isn't engaging in financial engineering; they're following sound technical strategy by outsourcing non-core infrastructure operations to specialists while focusing on chip design R&D. Building competing cloud infrastructure would force NVIDIA into utility-scale data center operations, a
completely different business model that could create channel conflicts with major customers like Microsoft and Amazon who buy billions in NVIDIA hardware. The dismissal of operational necessity overlooks that these partnerships solve real capacity constraints (the same bottlenecks causing months-long GPU wait times at major cloud providers) through legitimate division of labor between component manufacturing and infrastructure services, not the "round-trip" financial manipulation suggested.
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Stephen Lerner
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The "backstop" shows Google using their balance sheet to spur demand. Under GAAP, this contingent liability doesn't show up as a liability on the balance sheet unless it's probable and reasonably estimable... which they'll no doubt argue it isn't. $3.2 billion is nothing to Google, but this shows an interesting trend worth keeping an eye on as GOOG and NVDA fight for share. It could mean increased leverage invisible from the balance sheet.
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