Gurley identifies double taxation risk in take-under deals where MAG-seven payments flow through corporate revenue before reaching investors.
“as I understand it, there is a substantial double taxation risk. And if this is not the case, it's a thing I'd love for someone to educate me on.”
Gurley questions Nvidia's contract guaranteeing to buy CoreWeave's excess capacity as abnormal business practice.
“But then they wrote a contract with CoreWeave, which said if CoreWeave ever has extra capacity, we'll buy that capacity, which presumably helps it get more debt financing, that kind of thing.”
Gurley says ChatGPT unprompted compared AI circular deal structures to WorldCom and Enron when he described them.
“And it immediately started talking about WorldCom and Enron unprompted by me. I just said, what do you think about these types of structures?”