Many years ago, at the Tropicana Hotel & Casino in Las Vegas, I once saw a guy in a Tom Brady jersey, double-down on successive (winning) hands of blackjack (at a $5 table). From my vantage point, after 15 minutes he was up at least $12,000 dollars. I told you that story to tell you this one.

I wrote some time ago that AI was too big to fail and that it wouldn’t matter if OpenAI or Anthropic went bankrupt. Both would be absorbed into MSFT, Google, or Amazon quickly for pennies on the dollar. The collateral damage however could be catastrophic because much of the AI buildout is debt-financed. And now, the institutional investors and market makers who manage your 401k or pension have decided to “Tom Brady” their way to the AI promised land. NVIDIA has announced that it now has partnered with Apollo, BlackRock, Blackstone, Brookfrield, Goldman Sachs, and KKR to establish “independent financing platforms designed to mobilize 3rd party capital to support the buildout of AI infrastructure over time.” The announcement signals two important things:

1. The AI bottleneck is no longer GPUs (called it) or Memory (called it) or Networking (called it) or Electricity (called it), no, the number one bottleneck now is financing (did not call it).

2. If indeed OpenAI goes bankrupt (I bet they will), the second-order effects would be so HUGE (see above) that the the world’s largest bank (and lender of last resort) would have to step in and bail everyone out. Sound familiar? Afterwards, life, for the most part will go back to normal, except for the crippling inflation and lack of funding for many home buyers and small businesses. But otherwise, back to normal.

The moral of the story is to choose your friends wisely. If I had a rack of “High Society” sitting in front of me at a casino table, one of my friends would take half the stack and hide it from me. Tom Brady chose his friends poorly.

RIP Trop in Vegas. Good times.