Ed Zitron
Writes Where's Your Ed At, a newsletter on the AI industry's finances, and hosts the Better Offline podcast covering the same territory in audio.
“It sounds like maybe $150 billion worth of GPUs out of the… 500 billion sold have actually been installed anywhere. … Buying Nvidia GPUs is not actually proof of anything.”
The Tech Report · September 2026
Zitron's argument, built from the "construction in progress" lines in hyperscaler earnings reports, is that a large share of the GPUs Nvidia has sold are sitting in warehouses or in data centers without power. He is explicit that it's his own estimate from incomplete disclosure — Microsoft doesn't report the figure at all. The point he draws from it is that chip sales measure willingness to speculate on AI, not demand for it.
Transcript
…the data centers, Larry? How does it work? It's crazy that this is not all over the finance press and the business press and the tech press. I mean, they're covering the sporce majeure thing, but the brittle state of Oracle and its relationship with OpenAI is going to be the story of the AI bubble.
…this week into the numbers behind how many GPUs there are sitting around. We did a little bit of a React episode, kind of, I guess it was to the story with Microsoft having not brought on as much compute as we thought they did. Since then, what have you found and how many GPUs are being hoarded?
…installed one. Yeah, they installed a server in a building. And when you go and look, it's in the middle of a floor, which is not how data centers look. So it's like, yeah, you plug one of these things in, but it's the key jingling. It's a jingle jingle. Oh, look, we've got a Vera Rubin. Oh, it's so good and fast. And everyone goes, yay, everything's happening. Except nothing's happening. Like, it sounds like maybe $150 billion worth of GPUs out of the 535 billion, maybe 500 billion sold, have actually been installed anywhere. And this is bad for NVIDIA. It's bad for Broadcom. Broadcom estimates they're getting, sorry, analysts estimate that Broadcom's going to make about $300 billion selling TPUs to Anthropic and Google and also chips to OpenAI in the next three years. How's that going to, first of all, how are they going to pay for them, of…
I mean, one of the big questions on the topic of big questions that we came away with last week was: if why are people still buying more GPUs if they're just putting them in a warehouse? Have you gained any more insight on that at all?
I think that it's a combination of things. One, I think the hyperscalers are doing just dim-witted industrial planning. They are saying, okay, I'm going to build expazillion gigawatts of G of AI compute. I need to buy this many GPUs. I also think that Jensen Huang of NVIDIA has made it very clear…
Where does it leave? I mean, GPU bag debt. If I cannot believe that it was sold on the terms or the knowledge or the expectation that there's all these chips just sitting around not being used. And the thing with the depreciation that I kind of get stuck on, which does lead, does connect to this as…
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