All debt is money. Anybody can create money, the trick is getting other people to accept it.

Nvidia is vendor financing its output.

An ai company order $100m of GPUs. Nvidia delivers and holds onto that debt as an asset - like a bank loan.

The production company uses AI to create better plant and purchases $100m of AI tokens to do so. The ai company hold that debt like a bank loan

Nvidia requests $100m of production based on its $100m of orders. The production company holds that debt like a bank loan.

You now have a monetary loop. Take a single $10 bank deposit and Nvidia pays the production company, who pays the ai company who pays Nvidia. Run that round the circle a few million times and everybody has been paid.

Rinse and repeat.

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ElProlactin an hour ago | parent | next [-]

You should educate yourself about accounting.

First, under US GAAP rules (ASC 606), you cannot recognize revenue from a vendor-financed sale unless it meets certain criteria, the biggest one of which is: it has to be probable that the buyer will actually pay you. If a default is likely, revenue recognition is deferred until cash changes hands.

Nvidia's massive revenue is therefore not from a bunch of dubious vendor-financed sales to counterparties who don't have the money to pay and need a fraudulent scheme to make the arrangement work. Furthermore, Nvidia, by its own disclosure, indicates that when it extends financing to customers, they pay, on average, within 2 months (53 days to be exact). So these are not years-long extensions of credit.

	▲	YokoZar 9 minutes ago \| parent [-]
		"Create money" here doesn't mean literally fluffing the balance sheet like when the fed prints money (which would have accounting differences), it means spending the same money more rapidly than otherwise. This is NVidia's personal contribution to increasing the economy's Money Multiplier [https://en.wikipedia.org/wiki/Money_multiplier], which effectively increases the money supply from the broader economy's perspective.

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creativeSlumber 6 hours ago | parent | prev [-]

If the debt cancels out doesn't this mean that there was no debt ?

	▲	JumpCrisscross an hour ago \| parent \| next [-]
		> If the debt cancels out doesn't this mean that there was no debt ? No. For the same reason that oxygen being transported into and out of the body doesn't mean there was no oxygen.
	▲	msdz 5 hours ago \| parent \| prev [-]
		I’m guessing it doesn’t “cancel out” due to interest.