VCs float 'hardware revenue derivative': fund compute costs via revenue share, not equity
ns123abc · x · 2026-09-12
A discussion on new financing structures for AI compute costs: funding upfront compute with equity makes valuation an output of dilution math, which is backwards. The proposal is a revenue-share product where the lender gets cut into revenue to defray upfront hardware costs, citing Google's recent claim of a 1-year TPU payback and 2-year overall payback. The author suggests standardizing it like the SAFE, jokingly naming it the HRD (hardware revenue derivative).
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