Horowitz: Big Tech's startup cloud deals involve illegal roundtripping accounting

“The big tech companies have done this thing which we thought was illegal because we observed it occur at AOL and people went to jail, but what they've done is they invest in startups, you know, huge amounts of money. Microsoft and Amazon and Google are all doing it. You know, like billions of dollars with the requirement, with the explicit requirement that those companies then buy GPUs from them at like not the discount that they'd ordinarily get, but at a relatively high price and then be in their clouds. So that kind of, and then, you know, in the Microsoft case, even more aggressive, give me your source code, give me your weights you know, which is, like, extremely aggressive. So, you know, they're moving money from the balance sheet to their P&L you know, in a way that, at least from an accounting standpoint, it was our understanding, wasn't legal”

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