Not really. Or rather I think we both agree and disagree. Dysfunction is always possible (that's why we have regulation) and if you want to make a case that what happened between OpenAI and Nvidia ought to be against the rules that could certainly make for an interesting discussion.
However it's not at all uncommon for large sales agreements to come with additional strings attached. On its face I don't see how this example is any different.
If my company wanted to barter with another company to exchange equity for infrastructure how would you expect that to be reported? Did this situation differ from that expectation?
> What if Nvidia paid more for the stock than the chips were worth?
I'm not sure. It's an interesting question. Were the unit prices (ie chip and stock quantities) made public?
>If my company wanted to barter with another company to exchange equity for infrastructure how would you expect that to be reported? Did this situation differ from that expectation?
As I mentioned, I would have no problem if that's what happened. But it isn't. Nvidia recorded the cash as ordinary income. They did NOT record the stock as income. Cash has a clear value; stock does not. You keep reducing the transaction to its effective outcome, which is not where the problem lies, as I outlined above.
I haven't reduced it rather I've asked you why you think it shouldn't be reduced.
So your objection is the way in which they did the accounting? This is not an area I'm particularly familiar with. Does the way they went about it fall outside of the norm for the US? Or is your objection a more general one regarding the US regulations on the matter?
I understand you object but I don't quite follow why. When it comes to manipulating the OpenAI valuation couldn't Nvidia have intentionally overpayed for the stock in cash? Wouldn't that have provided the exact same quantity of capital, the exact same investment, the exact same valuation?
Maybe it would be different if their GPUs weren't in such demand but they are. Even in such a case, they could have structured the transaction as a series of smaller independent ones. Same ultimate outcome.
>So your objection is the way in which they did the accounting?
Yes, the accounting is the problem. As I said from the outset, if they actually just traded chips for stock, it would not be an issue.