Part One: NVIDIA Isn't Enron - So What Is It?

In part one of this week's three-part NVIDIA series, Ed Zitron walks you through why NVIDIA is specifically nothing like Enron, WorldCom or Lucent, and why investors might be thinking that’s the case anyway. Thank you to Ben Cahn of the Ben and Emil show for voicing "NVIDIA" - listen here - https://www.youtube.com/@benandemilshow This series took a lot of work, so if you want to support me, why not subscribe to my premium newsletter? Get $10 off a year’s subscription today: https://edzitronswheresyouredatghostio.outpost.pub/public/promo-subscription/p94my1c5ya YOU CAN NOW BUY BETTER OFFLINE MERCH! Go to https://cottonbureau.com/people/better-offline and use code FREE99 for free shipping on orders of $99 or more. --- LINKS: https://www.tinyurl.com/betterofflinelinks Newsletter: https://www.wheresyoured.at/ Reddit: https://www.reddit.com/r/BetterOffline/ Discord: chat.wheresyoured.at https://discord.com/invite/QUUQUP9szv Ed's Socials: https://twitter.com/edzitron https://www.instagram.com/edzitron https://bsky.app/profile/edzitron.com https://www.threads.net/@edzitron Email Me: [email protected] mailto:[email protected] See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  This is an iHeart Podcast. Guaranteed Human.

• 0:04Speaker 01

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• 1:09Ed Zitron?

  Hello and welcome to this week's Better Offline. I'm Ed Zitron.

• 1:24Ed Zitron?

  Now, at the end of November, Nvidia put out an internal memo that tried to, well, get ahead of a few things, is how I'd put it, that had been bubbling up in the news, specifically comparisons to Enron, the massive energy trading giant that imploded in the early 2000s after, well, a lot of fraud, also with some other concerns about its earnings. Said memo was leaked to Barron's reporter Takeem, who is one of the largest Nvidia boosters in the known universe. He posts constantly about how Nvidia is going to be the biggest, most hugest company in the world. He's meant to be like an analyst and a reporter, but he mostly just seems like a cheerleader. And it's kind of embarrassing. Now, nevertheless, he was leaking a memo that was quite worrisome, so... I don't know. Nvidia chose to disseminate it through him, but also to short sellers.

• 2:10Ed Zitron?

  The actual providence of this, or is it providence? I don't know, but someone will correct me. It's kind of confusing. Anyway. Long story short, people have a few concerns about Nvidia and, well, you shouldn't though. You shouldn't have any concerns at all because Nvidia's very secret, not to be leaked immediately document, spent thousands of words very specifically explaining how Nvidia was fine and most importantly, by the way, nothing like Enron. Now, why did I need to say all of this? And why did Nvidia need to say all of this? Well, Nvidia wrote this note as a response to both short seller Michael Burry, famous of course from the Big Shore, and Cion Capital. There's a whole bunch of other stuff there, but putting that aside. But also because of another thing, a guy called Shinaka Anslem Pereira,

• 2:54Ed Zitron?

  who wrote a piece called, and I quote, "The algorithm that detected the $610 billion fraud, how machine intelligence exposed the AI industry's circular financing scheme", and I've now been sent this about 11 times, maybe more since it came out. Now, the reason I'm not gonna link to Pereira's piece in the show notes or in the companion newsletter to this episode is simple, it's full of bullshit. And I've had some very good reporters link to this thing. I've heard from a lot of people say, "Oh, this scared me", and the fact that it scared Nvidia really pissed me off too. Because it's straight up got lies in it, like made up stuff. I'm not even talking just misstatements, I'm talking about really specific things it's made up. For example, in one part Pereira talks about major semiconductor distributor Arrow Electronics

• 3:39Ed Zitron?

  stating things in its Q3 2025 earnings about Nvidia. Let me be fucking clear about this, really pissed me off. Arrow makes no statements of any kind about Nvidia on its earnings calls, in its 10Q, or its earnings presentation. You can go and look, he doesn't link to anything, by the way. And if you need another example, Pereira claims that when Nvidia launched the Hopper H100 Architecture in Q2 Fiscal 2023, also amid reported supply constraints and strong demand, inventory declined 18% quarter-over-quarter as the company fulfilled backlog orders. If you bothered to go and look at Nvidia's inventory from that period, which is public by the way, you can see that inventory increased. Now, I'm not pissed off at anyone listening to this.

• 4:23Ed Zitron?

  I'm pissed off at any financial media that gave this any kind of attention, and I'm kinda pissed off at Nvidia for doing it too. It's AI slop. And I've not heard of Pereira before, but his LinkedIn says he is, and I'm not shitting you, the CEO at Pet Express Sri Lanka. I would suggest getting your financial advice elsewhere and at a minimum making sure that you read outlets that actually source their data. Anyway, as you're probably working out, all of this is fine and normal. This happens normally all the time. Companies do this all the time, especially successful ones, and there's nothing to be worried about here. Because after reading all seven pages of this document, we can all agree that Nvidia is nothing like Enron.

• 5:07Ed Zitron?

  No, really though, Nvidia is nothing like Enron, and it's kind of weird that anyone, especially you by the way, is saying that Enron and Nvidia have any similarities at all. They just put out a very long document. By the way, and it says they're not Enron, why do you keep asking about Enron? Alright? Why are you being weird? Okay, well now Nvidia said something about Enron. But that's because fools and vagabonds keep suggesting that Nvidia was like Enron, and very normally Nvidia has decided thousands of words at a time to set the record straight. And I genuinely, no jokes, do agree Nvidia is nothing like Enron. Putting aside how I might feel about the ethics or underlying economics of generative

• 5:48Ed Zitron?

  AI, Nvidia is an incredibly successful business that has incredible profits, holds an effective monopoly on CUDA which powers the underlying software layer to running software on GPUs, specifically generative AI, and not really much else that has any kind of revenue potential. Now, I talked a bit about CUDA in the haters guide to Nvidia, which I've linked to in the show notes. And yes, while I believe that one day this will all be seen as one of the most egregious wastes of capital of all time, for the time being Jensen Huang is potentially the greatest salesperson of all time. Nevertheless, people have somewhat run away with the idea that Nvidia is Enron in part because of the weird circular deals Nvidia's built with Neo Clouds, but dedicated AI-focused cloud companies like Callweave, Lambda, and Nebius who run data centers full of GPUs

• 6:33Ed Zitron?

  sold by Nvidia, which they then use as collateral for loans to buy more GPUs from Nvidia. I can see why people are a little concerned, but as dodgy and weird and unsustainable as this all is, it isn't illegal and it certainly isn't Enron because Nvidia, as I've been trying to tell you, is nothing like Enron. Now, you may be a little confused. I get it, that Nvidia is bringing up Enron at all. Nobody seriously thought that Nvidia was like Enron. Not even the pseudonymous and analyst Just Dario, who has been questioning its accounting practices for years, because Enron was genuinely one of the largest criminal enterprises in history, and Nvidia is at worst, I believe, a bit dodgy, and doing whatever it can to

• 7:18Ed Zitron?

  survive through various forms of accountancy alchemy. Wait, wait, you still think Nvidia is Enron? What's it gonna take to convince you? I just told you that Nvidia isn't Enron. Nvidia itself has explained at length, as I'll explain by the way, it's not Enron, and I'm not sure why you keep bringing up Enron all the time. Stop being an asshole. Enron and Nvidia are nothing alike. Look, look, Nvidia's own memo said that, and I quote, "Nvidia does not resemble historical accounting frauds because Nvidia's underlying business is economically sound, its reporting is complete and transparent, and it cares about its reputation for integrity." Now I know what you're thinking.

• 8:00Ed Zitron?

  Why is the largest company on the stock market having to reassure us about its underlying business economics and reporting? One might immediately begin to think Streisand effect style, that there, there might be something up with Nvidia's underlying business, but nevertheless, you know what? Fuck it. Nvidia, grab your coat, we're going out. Let's forget how all of this ever happened. Wait, what? What was, what was that?

• 8:23Speaker 04

  First, unlike Enron, Nvidia does not use special purpose entities to hide debt and inflate revenue. Nvidia has one guarantee for which the maximum exposure is disclosed in Note 9 of $860 million and is mitigated by $470 million in escrow. The fair value of the guarantee is accrued and disclosed as having an insignificant value. Nvidia neither controls nor provides most of the financing for the companies in which Nvidia invests.

• 8:51Ed Zitron?

  Oh, okay, I'm, I wasn't really thinking about all of that. I was literally just, I was just saying how you were nothing like Enron. We're good, come on, let's, let's go, let's, let's.

• 9:01Speaker 04

  Second, the article claims that Nvidia resembles WorldCom but provides no support for the analogy. WorldCom overstated earnings by capitalizing operating expenses as capital expenditures. We are not aware. ...of any claims that Nvidia has improperly capitalized operating expenses. Several commentators allege that customers have overstated earnings by extending GPU depreciation schedules beyond economic useful life. Rebutting this claim, some companies have increased useful life estimates to reflect the fact that GPUs remain useful and profitable for longer than originally anticipated, in many cases for six years or more. We provide additional context on the depreciation topic below.

• 9:43Ed Zitron?

  Um, uh, okay, I mean, I wasn't even thinking about WorldCom. I wasn't thinking about WorldCom at all. I genuinely hadn't thought about WorldCom in a while. You're nothing, you're nothing like them. Listeners, for context, WorldCom was a telecommunications company that collapsed in the early 2000s, in part because it had a tendency of overstating its earnings by billions and billions of dollars, in total 11 billion dollars. This followed a failed merger with Sprint, which was blocked for antitrust reasons, essentially forcing the company to grow its stock through customers rather than mergers. You know, normal way, kind of. The telecom sector was pretty saturated back then, making this a pretty tall ask, and

• 10:26Ed Zitron?

  so we ended up with a bunch of dodgy accounting, which all fell apart when the company filed for bankruptcy. Hmm. Nvidia, you, you're not doing anything WorldCom-y, are you? Why are you bringing up WorldCom?

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• 11:17Ed Zitron?

  All right, everyone, I'm back talking about Quince, one of my favorite clothing brands. And as we speak, I'm currently wearing one of their excellent cotton knit overshirts. They're a wear like a jacket. Nice pre-fall piece to wear as things cool off a bit. I've also been eyeballing one of their heritage water-resistant Harrington jackets too for later in the year to pair with their Mongolian cashmere sweaters I bought, and I have several of them and I really can't recommend Quince's stuff enough. I love Quince because they focus on high-quality wardrobe staples made with premium materials, jackets, pants, fitted tees and polos, activewear and even travel gear. Everything at Quince is priced 50 to 80% less than similar brands, and because they work directly with ethical factories and cut out the middlemen, you're getting more for less. Find the four pieces you'll reach for most at Quince.

• 12:00Ed Zitron?

  Download the Quince app for app-exclusive offers or go to quince.com. Get free shipping on your order and 365-day returns. Now available in Canada and the UK too. And when Quince asks where you heard about them, let them know it was on Better Offline. It's the best way to support the show.

• 12:17Speaker 02

  Empower is all about helping you invest well so you can go out and live a little. And their Free Empower Personal Dashboard shows you your full financial life in one place. You'll be able to see your net worth, monitor budgets, analyze your portfolio, set retirement goals and more. Whether you're saving for something big, want to treat yourself, friends or family, or meet long-term goals, Empower helps you see where you stand. You've worked hard for your money and Empower can help you make the most of it. Download the Empower Personal Dashboard or visit empower.com. Not an Empower client paid or sponsored.

• 12:49Speaker 06

  Hi, I'm Jenna Oshkowitz. You might know me from Glee. This is At the Table, the food allergy podcast, a show about food, connection and what it really looks like to live with food allergies. Each episode, we hear stories from real people like Daniel. People would always think I was lactose intolerant, so I just kind of shortened my explanation to I'm deathly allergic, in a big way that defined a lot of my childhood. And while there are challenges, there are moments that remind you you're not alone.

• 13:20Speaker 07

  One of the best guys that I dated, he made a point to memorize all my food allergies.

• 13:25Speaker 06

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• 13:48Ed Zitron?

  To be clear, by the way, WorldCom was doing capital F fraud and its CEO Bernie Ebers went to prison after an internal team of auditors led by WorldCom VP of Internal Auditing Cynthia Cooper reported $3.8 billion in misallocated expenses and phony accounting entries. That is just straight up fraud. So, okay, look, Nvidia, you were really specific about saying you didn't capitalize operating expenses as capital expenditures. You're not doing that. Okay, that's, that's great. Great stuff. I literally never thought you'd done that before. I genuinely agree. You're nothing like WorldCom. Nvidia, nothing like WorldCom. Anyway, glad to hear about the depreciation stuff. Looking forward to hearing more about...

• 14:32Speaker 04

  Third, unlike Lucent, Nvidia does not rely on vendor financing arrangements to grow revenue. In typical vendor financing arrangements, customers pay for products over years. Nvidia's DSO was 53 in Q3. Nvidia discloses our standard payment terms with payment generally due shortly after delivery of products. We do not disclose any vendor financing arrangements. Our customers are subject to strict credit evaluation to ensure collectibility. Nvidia would disclose any receivable longer than one year in long-term other assets. The 623 million other balance as of Q3 does not include extended receivables. Even if it did, the amount would be immaterial to revenue.

• 15:20Ed Zitron?

  All right, uh, all right, man. If anyone asks whether you were like Fame.com crash out Lucent Technologies, I'll be sure to correct them. Oh, God, I'm gonna have to explain another business that failed around the millennium right now, aren't I? After all, Lucent's situation was really different. Well... Sort of. Lucen was a giant telecommunications company that one, one that was for a time extremely successful, really, really successful in fact, turned around by the now infamous Carly Fiorina. Fiorina, who joined Lucen from AT&T, had a strong start, and in her first few years at the company before she left to join HP, Lucen saw revenues grow by fifty-eight percent to thirty-eight billion dollars, and net income grow from a small loss to a four-point-eight billion-dollar profit.

• 16:05Ed Zitron?

  Nvidia, this all sounds great. Why wouldn't you want to be compared to Li... Oh, oh, yeah, yeah, sorry. You see, in nineteen ninety-seven, Fiorina took over the group responsible for selling gear to telecoms providers, and within one year, that business unit grew by just shy of a quarter. In two years, it jumped from fifteen-point-seven billion dollars when Fiorina took over to twenty-three-point-six billion dollars in nineteen ninety-nine. Lucen did this by lending money to its customers, with its loans appearing on its balance sheets as, quoting CNN here, "an allegedly sold asset." Now, Lucen was classifying debt as an asset, and did something called vendor financing,

• 16:47Ed Zitron?

  which means you lend somebody money to buy something from you. It turns out Lucen did a lot of this. And in a very simple way, this is like giving someone a ten-dollar loan to buy ten dollars of bricks from you. It's just handing the same ten dollars back, and no one's really doing well here. Look, these loans were also very generous, with telcos, small fledgling telecommunications companies with minimal assets and revenue, by the way, and often mountains of high interest there, often paying nothing up from. The loans themselves were often bigger than the company itself, and far beyond what the company could hope to repay. Okay, Nvidia. Look, we're, we're friends, okay? Look, I hate to say this, but I kind of get

• 17:31Ed Zitron?

  why somebody might say you're doing Lucen's stuff. After all, rumor has it that in your supposed deal with OpenAI, a company that burns billions of dollars a year, will maybe involve leasing your GPUs to them, which sure sounds like you're doing vendor finance.

• 17:46Speaker 04

  We do not disclose any vendor financing arrangements.

• 17:50Ed Zitron?

  Oh, all right. Okay, you're not disclosing any vendor financing arrangements. Okay, I, I, I got it, man. Anyway, back to Lucent. Lucent really did fuck up big time though, indulging in the dark heart of circular vendor financing, the likes of which Nvidia has not, kind of. In 1998, it signed its largest deal, a $2 billion deal, an equipment and finance agreement with telecommunications company Windstar, which promised to bring, I shit you not, $100 million in new business over the next five years, and build a giant wireless broadband network, along with expanding Windstar's optical networking. I quote the Wall Street Journal, "Windstar was one of the scores of standalone startup companies created in the late 1990s to compete in the market for local telecom services.

• 18:35Ed Zitron?

  These firms, known as competitive local exchange carriers, or CLACs, raised billions of dollars in debt and equity financing and embarked upon ambitious plans to compete with incumbent carriers. For a time in the late 90s, their stocks were hot properties, outpacing even internet stocks." In December 1999, Wired would say that Windstar's small white dish antennas heralded a new era and new mindset in telecommunications, and included this awesome quote about Lucent from CEO and founder Will Ruhana, "On one level, we are a customer and they are a supplier. On another level, they're a financier and we are a borrower. On yet another level, they are providing services around the world to accelerate our development. They also want to use our service and have guaranteed $100 million in business."

• 19:20Ed Zitron?

  Hell yeah. I also love this because you can read this, or hear this, or what have you, and go and read current magazines talking about these companies and see them do the same things. Just, look, oh my god. There's actually another great quote I might want to share with you. "Windstar is a publicly traded company and has more than 4,000 employees and reports more than $300 million in annual high score revenues." We love annualized revenues, don't we folks? We love them. Just do month times to wherever you get the biggest numbers we've ever seen. They're beautiful, we love them.

• 19:57Ed Zitron?

  A company making about twenty-five million dollars a month. Twenty-five million dollars a month in revenue, signed a two-billion-dollar loan. Two billion dollars in financing. For business that would make them a hundred million dollars across five years. They aren't teaching you this in business school, do they? Weirdly, Windstar's Wikipedia page says that revenues were four-hundred-and-forty-five-point-six-million dollars for the year ending nineteen ninety-nine. Around thirty-seven-point-one-million dollars a month. These numbers don't line up so good, and probably because Windstar was kinda crooked. Now, Windstar, they loved raising money.

• 20:36Ed Zitron?

  Two years later in November two thousand, it would raise one-point-oh-two-billion dollars, for example, and it raised a remarkable five-point-six-billion dollars between February nineteen ninety-nine and July two thousand and one, according to the Wall Street Journal. Nine-hundred-million dollars of that came in December nineteen ninety-nine for an investment from a bunch of investors, including, of course, Microsoft, with analyst Greg Miller of Jefferies and Co. saying, "The Microsoft investment is a significant endorsement that the technology will be used more aggressively in the future. Windstar can use the capital." They sure fucking can, can't they? Now, another fun thing happened in November two thousand and two. Lucent would admit it overstated its fourth-quarter profits by improperly recording a hundred-and-twenty-five-billion dollars in sales, reducing that quarter's revenue from profitable to break-even.

• 21:21Ed Zitron?

  Things would eventually collapse when Windstar couldn't pay its debts, filing for Chapter eleven bankruptcy protection on April eighteenth, two thousand and one, after failing to pay seventy-five-million dollars in interest payments to Lucent, which had cut access to the remaining four-hundred-million dollars, not four-hundred dollars, four-hundred-million dollars, of its one-billion-dollar loan to Windstar as a result. Windstar would file a ten-billion-dollar lawsuit in bankruptcy court in Delaware the very same day, claiming that Lucent breached its contract and forced Windstar into bankruptcy by, well, not offering to give it more money that it would not pay off. Elsewhere, things have begun to unravel for Lucent.

• 21:57Ed Zitron?

  A January two thousand and one story from the New York Times titled "Strange Story of Lucent," a company that made over thirty-three-billion dollars in revenue in its previous fiscal year, asking to defer the final tranche of payment, twenty-million dollars, for an acquisition due to, and I quote, "accounting and financial reporting considerations." Now, why would they do that? Well...

• 22:18Ed Zitron?

  Lucent needed to keep that money on the books to boost its earnings as its stock was in the toilet and was about to announce it was laying off 10,000 people and a quarterly loss of over a billion dollars. Over the course of the next few years, Lucent would sell off various entities and by the end of September 2005, it would have 30,500 staff and a stock price of $2.99, down from a high of 75 bucks a share at the end of 1999 and 157,000 employees. According to VC Thomas Tungus, and that is his name, Lucent had $8.1 billion of vendor financing deals at its height. Lucent was still a real company selling real things, but it had massively overextended itself in an attempt to meet demand that didn't really exist, and when Lucent realised

• 23:01Ed Zitron?

  that, it decided to create demand itself to please the markets. To quote MIT Tech Review and author Lisa Endlich, "It believed that setting and meeting the expectations of Wall Street subsumed all other goals and that Lucent had little choice but to ride the wave." To be clear, Nvidia is quite different from Lucent. It has plenty of money and the circular deals it does with CoreWeave and Lambda don't involve the same levels of risk. Nvidia is not, to my knowledge, backstopping CoreWeave's business or providing it with loans, though Nvidia had agreed to buy $6.3 billion of computers, the buyer of last resort of any unsold capacity, and did mention an unnamed partner it had agreed to backstop the leases of in its most recent earnings.

• 23:43Ed Zitron?

  Nevertheless, Nvidia can afford this and it isn't illegal, though it is obviously propping up a company with lacking demand. Nvidia doesn't appear to be taking on masses of debt to fund its empire either, with over $56 billion in cash on hand and a mere $8.4 billion in long-term debt. Okay, we got through this, man. Nvidia is nothing like Lucent either. Okay, maybe there are some similarities, but it's different. No worries at all. I know, I'm chill, I'm relaxed, and I'm most importantly, normal. You still seem nervous, Nvidia. I promise you, if anyone asks me if you're like Lucent, I'll tell them you're not. I'll be sure to tell them you're nothing like Lucent. Are you okay, dude? When did you last slip?

• 24:25Speaker 04

  Okay, so about inventory growth indicating waning demand. People are claiming that growing inventory in Q3, which was above 32% quarter over quarter, suggests that demand is weak and chips are accumulating unsold, or customers are accepting delivery without payment capability, causing inventory to convert to receivables rather than cash.

• 24:48Ed Zitron?

  Whoa, whoa, okay. Slow down, slow down. Who's been saying this? Oh, everybody? Did Michael Burry scare you? Did you watch The Big Short and say, ah, Christian Bale's playing Pantera again? Ah. Anyway, now you've woken up everybody else in the house and they're all wondering why you're talking about receivables. Shouldn't that be fine? Nvidia is a big business. Your business is pretty big, man, and it's totally reasonable to believe that a company planning to sell $63 billion of GPUs in the next quarter would have ballooning receivables. $33 billion in receivables, up from $27 billion last quarter, and growing inventory. $19.78 billion up from $14.96 billion in the last quarter. That is, that is pretty big up. But nevertheless.

• 25:34Ed Zitron?

  Nvidia is a big asset-heavy business, which means Nvidia's clients likely get decent payment terms to raise debt or move cash around to get them paid. Okay, everyone, calm down. You can go back to bed, like my buddy, who is nothing like Enron, by the way, just said.

• 25:48Speaker 04

  First, growing inventory does not necessarily indicate weak demand. In addition to finished goods, inventory includes significant raw materials and work in progress. Companies with sophisticated supply chains typically build inventory in advance of new product launches to avoid stockouts. Nvidia's current supply levels are consistent with historical trends and anticipate strong future growth. Second, growing inventory does not indicate customers are accepting delivery without payment capability. Nvidia recognizes revenue upon shipping a product and deeming collectability probable. The shipping reduces inventory, which is not related to customer payments. Our customers are subject to strict credit evaluation to ensure collectability.

• 26:33Speaker 04

  Payment is due shortly after product delivery. Some customers prepay. Nvidia's DSO actually decreased sequentially from 54 days to 53 days.

• 26:45Ed Zitron?

  Nice dude, you're totally right. It's pretty common for companies, especially large ones, to deliver something before they receive cash. It happens. I'm being sincere. Sounds like companies are paying great, but you know, can you just be a just a little more specific, like the whole shipping things before they're paid thing?

• 27:04Speaker 04

  Nvidia recognizes revenue upon shipping a product and deeming collectability probable.

• 27:09Ed Zitron?

  Yeah, okay, I thought I heard you about the first time. What does deeming collectability probable mean? You could have just said, we get paid like ninety ninety-five percent of the time within two months or whatever. Unless it's not like ninety-five or ninety percent. How often? How often are you paid within two months? Most companies don't break this down, by the way, but then again, most companies are not Nvidia, the largest company on the stock market. If I'm honest, nobody else has recently had to put anything out that says, I'm not Enron. And I want to be clear that Nvidia is not like Enron. For real, though, it really isn't like Enron. And jokes aside, bits aside, they were very different businesses. They were very different indeed. It is it is very strange, though, that Nvidia wants

• 27:54Ed Zitron?

  somebody to think about how it's nothing like Enron. This was technically an internal memo, and thus there is a chance its existence was built for only Nvidia's or short sellers or something worried about the value of the stock. And we know it's definitely written to try and deflect Michael Burry's criticism as well as that of a random AI slop substacker. It it's just it's just weird. It's weird. I don't really know what's going on. And I really want to know, why does Nvidia need you to know it's nothing like Enron? Did it do something like Enron? Is there a chance that you or I may mistakenly say, hey, is Nvidia doing Enron?

• 28:46Speaker 01

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• 29:16Ed Zitron?

  All right, everyone, I'm back talking about Quince, one of my favorite clothing brands. And as we speak, I'm currently wearing one of their excellent cotton knit overshirts that wear like a jacket. Nice prefall piece to wear as things cool off a bit. I've also been eyeballing one of their heritage water-resistant Harrington jackets, too, for later in the year to pair with their Mongolian cashmere sweaters I bought. And I have several of them, and I really can't recommend Quince's stuff enough. I love Quince because they focus on high-quality wardrobe staples made with premium materials, jackets, pants, fitted tees and polos, activewear, and even travel gear. Everything at Quince is priced 50 to 80% less than similar brands, and because they work directly with ethical factories and cut out the middlemen, you're getting more for less. Find the fall pieces you'll reach for most at Quince.

• 30:00Ed Zitron?

  Download the Quince app for app-exclusive offers or go to quince.com. Get free shipping on your order and 365-day returns. Now available in Canada and the UK, too. And when Quince asks where you heard about them, let them know it was on Better Offline. It's the best way to support the show.

• 30:16Speaker 02

  Empower is all about helping you invest well, so you can go out and live a little. And their Free Empower Personal Dashboard shows you your full financial life in one place. You'll be able to see your net worth, monitor budgets, analyze your portfolio, set retirement goals, and more. Whether you're saving for something big, want to treat yourself, friends, or family, or meet long-term goals, Empower helps you see where you stand. You've worked hard for your money, and Empower can help you make the most of it. Download the Empower Personal Dashboard or visit empower.com. Not an Empower client paid or sponsored.

• 30:48Speaker 06

  Hi, I'm Jenna Oshkowitz. You might know me from Glee. This is At the Table, the food allergy podcast, a show about food, connection, and what it really looks like to live with food allergies. Each episode, we hear stories from real people like Daniel. People would always think I was lactose intolerant, so I just kind of shortened my explanation. I'm deathly allergic. In a big way that defined a lot of my childhood. And while there are challenges, there are moments that remind you you're not alone.

• 31:19Speaker 07

  One of the best guys that I dated, he made a point to memorize all my food allergies.

• 31:25Speaker 06

  So join us and hear their stories and more because living with food allergies isn't just about what you can't eat. It's about still having your seat at the table. Brought to you by Genentech and Novartis. Listen to At The Table, the food allergy podcast on America's number one podcast network, iHeart. Follow At The Table and start listening on the free iHeart radio app today.

• 31:48Ed Zitron?

  Hey Nvidia, how you feeling? Yeah, yeah, you had a rough night. You were saying all this crazy stuff about Enron. Are you doing okay? No, no, I, I get it. You're nothing like Enron. You said a lot of that last night. So while you were sleeping, yeah, you've been asleep 16 hours, by the way. You were pretty messed up. You brought up Lucent, then puked in my sink and tried to scream at my cat. I did some digging though, and like, I get it. You're nothing like Enron. Enron was breaking the law and Nvidia is definitely not doing that. But you said you didn't use special purpose vehicles recently. You did though. You are, you're not using them like Enron. Enron moved the debt around on the SPVs, but you're investing $2 billion in Elon Musk's special purpose vehicle

• 32:31Ed Zitron?

  that will then use that money to raise debt to buy GPUs from you, from you Nvidia, that will then be rented to Elon Musk. And this is very different to what Enron did. I am with you, dude. Don't let the haters keep you down. No, I, I don't think a t-shirt that says Nvidia is not like Enron for these specific reasons will help you either. Wait, wait, okay, look, one thing though. You have this theoretical deal lined up with Sam Altman to invest $100 billion in OpenAI. And yes, you said in your latest earnings that it was actually a letter of intent with the opportunity to invest, which doesn't mean anything, got it? And the plan was you would lease the GPUs to OpenAI if the deal happens. Now theoretically, how would you go about doing that Nvidia?

• 33:14Ed Zitron?

  You'd probably need to do exactly the same deal you did with XAI. You would, you would buy the GPUs from yourself and then rent them to OpenAI. That's, that's a little Lucent to you. Kind of sounds like vendor financing and.

• 33:31Ed Zitron?

  Oh, you mentioned that already.

• 33:32Speaker 04

  Look, man, unlike Lucent, Nvidia does not rely on vendor financing arrangements to grow revenue. In typical vendor financing arrangements, customers pay for products over years. Nvidia's DSO was 53 in Q3. Nvidia discloses our standard payment terms with payment generally due shortly after delivery of products. We do not disclose any vendor financing arrangements.

• 33:55Ed Zitron?

  Let me stop you right there. Let me stop you right there for a second. You were on about this last night, and you scared my cats when you were crying about something called two nanometer. I don't know. First of all, why are you bringing up specifically typical vendor financing agreements? Do you have atypical ones? Also, I'm jazzed, I guess I'd say, to hear you disclose your standard payment terms, but um, what standard payment terms? What exactly? Where can I find those, by the way? Because you didn't link them. You didn't, didn't mention them. Where are those? And also, look, you're saying the words, "You don't disclose any vendor financing arrangements." Those are the exact words. Those words are very different to, "I

• 34:38Ed Zitron?

  do not have any, we do not have any vendor financing arrangement." "I do not disclose when I go to the bathroom, but I absolutely do use the toilet." Let's not pretend that Nvidia doesn't have a history in helping getting its business buddies funding. Nvidia has deals with both Lambda and CoreWeave to guarantee that they will have compute revenue, which they in turn use to raise debt, which is then used to buy more Nvidia GPUs. You've learned how to feed the debt into yourself, Nvidia. I'm genuinely impressed. This is great stuff. I'm having the time of my life with how not like Enron you are, and I'm serious, I 100% do not believe you are like Enron, but what exactly are you doing, man? What are you, what

• 35:21Ed Zitron?

  are you doing to get Wall Street what it wants?

• 35:28Ed Zitron?

  I'm serious though. Seriously folks, and thank you Ben for being Nvidia there. Nvidia really isn't like Enron though. It really isn't, and I hear a lot of people saying things like even about Sam Altman. I want to, this is a brief rant here, saying people are gonna go to jail, people are gonna go to prison, there's fraud, there's fraud here, Corweave's doing fraud, this, that and the other. None of these companies are doing fraud. That's the world we live in. They are doing accountancy alchemy, they're moving stuff around, they are, there are ways that Nvidia could be doing all of this, and I'm very sure that this is the case, perfectly legally. Sam Altman, not breaking the law either, assuming he's been honest with his investors. Nevertheless, for real though, Nvidia is nothing like Enron.

• 36:11Ed Zitron?

  Enron was a criminal enterprise and Nvidia is not. More than likely Nvidia is doing relatively boring vendor financing stuff and getting people to pay them on 50 to 60 day time scales, probably net 60, and like it said, it gets paid upfront, sometimes. Nvidia truly isn't like Enron. After all, Meta, Microsoft and Apple are the ones getting into energy trading, to the point that I actually think it's time that someone explained what exactly happened to Enron with a more modern twist, or at least as much as it's possible within the confines of a podcast that isn't exclusively about Enron. But I'm gonna explain next episode what the fuck Enron was, and you can have some fun listening to it.

• 37:00Ed Zitron?

  Thank you for listening to Better Offline. The editor and composer of the Better Offline theme song is Matt Osowski. You can check out more of his music and audio projects at mattosowski.com. M A T T O S O W S K I dot com. You can email me at [email protected] or visit betteroffline.com to find more podcast links and of course my newsletter. I also really recommend you go to chat dot where's your ed dot app to visit the discord and go to r slash better offline to check out our reddit. Thank you so much for listening.

• 37:32Speaker 06

  Better Offline is a production of Cool Zone Media. For more from Cool Zone Media, visit our website, coolzonemedia.com, or check us out on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

• 38:05Speaker 02

  Empower is all about helping you invest well so you can go out and live a little. And their Free Empower Personal Dashboard shows you your full financial life in one place. You'll be able to see your net worth, monitor budgets, analyze your portfolio, set retirement goals, and more. Whether you're saving for something big, want to treat yourself, friends, or family, or meet long-term goals, Empower helps you see where you stand. You've worked hard for your money, and Empower can help you make the most of it. Download the Empower Personal Dashboard or visit empower.com. Not an Empower client paid or sponsored.

• 38:36Speaker 05

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• 39:20Speaker 05

  Zolair 150mg is a prescription medication used to treat food allergy in people one year of age and older to reduce allergic reactions due to accidental exposure to one or more foods. While taking Zolair, you should continue to avoid all foods to which you are allergic. Don't use if you are allergic to Zolair. Zolair may cause a severe, life-threatening allergic reaction called anaphylaxis. Tell your doctor if you ever had anaphylaxis. Get help right away if you have trouble breathing or if you have swelling of your throat or tongue. Zolair should not be used for the emergency treatment of allergic reactions, including anaphylaxis. Zolair is for maintenance use to reduce allergic reactions, including anaphylaxis, while avoiding food allergens. Serious side effects such as cancer, fever, muscle aches and rash, parasitic infection, or heart and circulation problems have been reported. Please see zolair.com for full prescribing information. Ask an allergist

• 40:02Speaker 05

  about Zolair. This is an advertisement for Zolair, paid for by Genentech and Novartis.

• 40:07Speaker 00

  This is an iHeart Podcast. Guaranteed Human.