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AI Companies Are Trying to Hide a Staggering Amount of Debt
- lardosaurusrex 2mo ago"No you guys it isn't actually an issue because it isn't." Why? "Because it isn't; okay?!" oh ok.
- serial_dev 2mo ago“You found it didn’t you?, then we weren’t actually hiding it, so please stop looking into our finances too much”
- mvdtnz 2mo ago[flagged]
- yesitcan 2mo agoWouldn’t want to have any fun over here.
- HDThoreaun 2mo agoMeta makes $60 billion profit a year and is still crazy bloated. $420 billion in debt legitimately is not an issue for them. The only companies with actual problems are oracle and spacex
- HDBaseT 2mo agoMeta making 60B a year doesn't make this any less scary. If Meta put every cent towards their debt, it would take at least 6 years, assuming 0 interest and 0 new debt. The interest alone in the next 5-10 years likely would push it close to 1T debt. How on earth are they meant to pay for this?
- pixel_popping 2mo agoMeta will realistically live for decades, that's how they'll pay, don't forget that those companies got some of the best financial teams in the world, it's not even at a scale that regular people can comprehend.
- HDThoreaun 2mo agoTheyre gonna pay for it over the course of a decade. Meta revenue is still increasing 10% every year, a $50 billion lease payment on datacenters that are only worth $10 billion is annoying but they can handle it. Also this isnt actually debt, there is no interest. Its commitments theyve made to lease datacenters. A lot of the money here is a $10 billion dollar payment they owe a decade from now.
- elmer2 2mo agoIt won't pay off if LLMs efficiency gets good enough to make those data centers obsolete. It's a huge gamble.
- brainwad 2mo agoOr: increasing resource efficiency may encourage even more usage, as happened with coal, oil and photovoltaics.
- Insanity 2mo agoGiven how heavily subsidized it is at the moment, the efficiency isn’t as important. Typically efficiency would give you more at lower cost, but with token prices so removed from actual cost that plays less of a role here.
- brainwad 2mo agoIf the inference gets an order of magnitude cheaper, labs can afford to subsidise an order of magnitude more usage for the same marketing cost. So that part of usage will, if not accelerate with efficiency, at least still grow linearly with it. And there is a substantial amount of usage at or above true costs - everyone using a 3P harness, everyone on enterprise contracts, and everyone self-hosting an open weights model in a 3P cloud.
- metalman 2mo agoThe (any!) comparrison to photovoltaics is not acurate.Photovoltaics (PV) are primary energy producing infrastructure that produces its own fuel and is now verticly integrated into it's own supply chain, nothing other than life itself posseses this atribute. AI, is exceptionaly likely to work in exactly the opposite fashion and take its host out as it goes down.
- inigyou 2mo agoWhen PVs got cheaper, more of them were sold.
- ChrisArchitect 2mo ago[dupe] Discussion on source: https://news.ycombinator.com/item?id=48987863 https://news.ycombinator.com/item?id=48987863
- roschdal 2mo agoIs it time to short AI companies?
- Veliladon 2mo agoThere's only one mostly AI company you can short right now and everyone's already doing it.
- xur17 2mo agoWhat is that company?
- Noaidi 2mo agoOracle.
- marcosdumay 2mo agoI don't think the GGP meant that one. But yeah, that is one too.
- Biologist123 2mo agoUmmm, whose that?
- selectodude 2mo agoSpaceX is already 3x as expensive to short as the next biggest megacap. Good luck everybody.
- Ekaros 2mo agoMarket can remain irrational longer than you can remain solvent... Simply choosing not to get involved might be most reasonable action.
- the__alchemist 2mo agoIn mice! It's already factored in to the price.
- chasd00 2mo agoAre they really "trying to hide" this debt? I think it's pretty common knowledge that a lot of these companies are using debt/bonds for funding. The debt not showing up where the author wants is a reporting formality not an attempt to hide it.
- Xalutiono 2mo agoYeah I think it went through the press on mass eh? And even if you look at the debt, even companies like meta make 200 billion revenue in 2025 alone. Isn't it good that these companies with these massive massive deep pockets invest?
- dofm 2mo agoOne of Meta's SPVs building a data centre for them, Meta own only 20% of it; 80% is owned by other investors. That's the issue here; the market thinks that only these handful of money-go-round FAANGs/Mag7 companies, are exposed but analysis shows that SPVs are spreading really significant risk to many more investors.
- drob518 2mo agoI think the point is that it’s not showing up on the standard financial filings. If you were to pull the annual reports for these companies, you wouldn’t see it. That doesn’t mean it’s impossible to find it. Obviously, it is otherwise the article wouldn’t have been written. But you’re going to have to go the extra mile. To be clear, none of this is illegal. It’s just covered in the advanced CFO accounting class.
- dmitriy_ko 2mo agoTake-or-pay contracts appear as "contractual commitments" in 10-K. They are not hidden. That's the way they are reported in all industries where take-or-pay contracts exist. There's nothing nefarious about it.
- drob518 2mo ago
- ck2 2mo agowith US Government owning huge chunks now "too big to fail" bailout incoming will make subprime crash seem like child's play sure you won't be able to ever afford a home but we'll have tons of cheap super-hardware barely used
- bigfishrunning 2mo agoThe housing market, which is backed mostly by the mortgage interest rate, will crash right along with the stock market. Houses will become much more affordable!
- Xalutiono 2mo agoAnd? Its not my debt. If they continue investing in compute, memory, memory bandwidth, network infrastructure, etc. it makes a relevant contribution of progress in all of these fields which I will leverage. A small form factor PC with 100gb fast memory and being able to run something like sonnet or opus level LLM would be massive. I have so many things i want to do and still sitting it out due to cost.
- markus_zhang 2mo agoThe thing is they actually pushed the price tags of memory and disks high so we wouldn’t be able to afford it. Unless ofc you rent from them.
- Xalutiono 2mo agoYes that is unfortunate for sure don't get me wrong this affects me but the overall benefit will still be bigger i assume. 10 years ago i watched a talk about the problem of compute vs. memory. Compute increased significantly while memory speed did not. This gigantic investment will solve this problem. So either this blows and we will have way too much capacity which will lead to cheap and mass amount of memory for everyone + cheap GPUs again OR AGI. So win - win.
- tedggh 2mo agoIf hyperscalers flop, and there’s a good chance they will, memory and disk prices will crater. They are historically the most volatile asset in tech. If Samsung, Micron et al can’t sell to hyperscalers they will switch back to consumer, because they can’t just turn off a memory fab without losing billions.
- cowl 2mo agoonly that is not so. disk prices maybe, the memory will not be available to consumers because it's a tech that makes sense only for datacenters full of GPUs and massive power/cooling. by now all fabs have converted to it, there might be a lot of HBM capacity freed but no consumer devices that can use it. retooling all fabs to produce consumer level memory will take a lot of time if they even do it at all instead of just pushing for consumers to rent datacenter capacity directly. all three major remaining players in the mem sector have already tried in the past to collude for memory price fixing. this is the first time I'm rooting for chinese chip tech to reach more or less parity.
- deleted 2mo ago[deleted]
- Havoc 2mo agoWould have been nice if the article had any substantive facts in it
- sulam 2mo agoThe article is a very shallow restatement of the conclusions in this paywalled piece: https://asia.nikkei.com/business/technology/five-us-tech-giants-hidden-debts-soar-to-1.65tn-on-opaque-ai-funding https://asia.nikkei.com/business/technology/five-us-tech-gia...
- LetsGetTechnicl 2mo agoHere's the un-paywalled version: https://archive.is/20260722205736/https://asia.nikkei.com/business/technology/five-us-tech-giants-hidden-debts-soar-to-1.65tn-on-opaque-ai-funding https://archive.is/20260722205736/https://asia.nikkei.com/bu...
- toss1 2mo agoYup, at least a table of the on-books and off-books debt of the top 5 AI-building companies would be nice
- nylonstrung 2mo agoI counted all 27 stories on Futurism's frontpage and every single one was "AI bad" "Elon bad" except for 1. a story about Trump's diarrhea 2. a story about lettuce at Whole Foods Pretty much Buzzfeed level doomscroll slop
- softwaredoug 2mo agoReally feels like the govt + industry, through protectionism and fear-mongering, are propping up a "Too big to fail" situation. Long term, I think the best thing the economy could do is to make training on model outputs fair-use, as suggested by Ben Thompson[1]. Short of that, the companies should enter into distillation agreements with other US labs to let them make near-Fable models. As it stands now, the companies want to hold all the upside. While also being culturally so safety focused - "only we have the right to regulate this" that its IMO counterproductive to US leadership in AI. A different universe where X.ai, Meta, and everyone were also building Fable competitive open weights models - because they can distill - would probably be better for the US long term. But there's too much capital on the line right now behind OpenAI / Anthropic for them to do this. They're really in a bind IMO. 1 - http://stratechery.com/2026/whos-afraid-of-chinese-models/ http://stratechery.com/2026/whos-afraid-of-chinese-models/
- delecti 2mo ago> Long term, I think the best thing the economy could do is to make training on model outputs fair-use AI outputs have been ruled as not even copyrightable, isn't that even better than fair use?
- softwaredoug 2mo agoProbably - The issue is more about terms-of-service and whether any company wants to go to bat on a years-long legal battle over this issue
- delecti 2mo agoWell that's a big of a separate issue. You aren't violating copyright law to use the output of one LLM to train your own, but that doesn't mean they need to let you do it. You likewise aren't violating Apple's copyright if you use iTunes to make a missile, but Apple doesn't have to let you do it. (Example chosen because that carveout is/was in their EULA)
- dude250711 2mo agoI guess "try to hide" means to be posted about all over the news weekly.
- deleted 2mo ago[deleted]
- wongarsu 2mo agoDo they? Is a company with $200 billion annual revenue and earnings (EBITDA) of $100 billion having $420 billion of off-balance-sheet debt really staggering? In many other industries that would be a perfectly normal amount of debt to have. It's only unusual because we are used to tech companies having so much cash on hand they don't know where to put it
- Noaidi 2mo agoIt is not just that they have the debt, it. is they are trying to hide the debt. Why would a legitimate company try to hide their debt?
- ch4s3 2mo ago> is they are trying to hide the debt. They aren't hiding it though. The contracts are recorded in regular filings.
- Noaidi 2mo agoRope a doped with cope. Maybe you should buy some $ORCL? https://asia.nikkei.com/business/technology/five-us-tech-giants-hidden-debts-soar-to-1.65tn-on-opaque-ai-funding https://asia.nikkei.com/business/technology/five-us-tech-gia... "Companies disclose such future debt not in their balance sheets, but in annotations to their quarterly financial statements. This is a legitimate practice under accounting rules, but may make it difficult for retail investors to recognize risks." "Today's AI industry is partly supported by demand generated by circular investment. Nvidia and tech giants invest in data center operators and AI companies, with that money then turning into GPU and cloud usage fees. Actual demand is difficult to see, increasing the likelihood of over investment in data centers."
- ch4s3 2mo agoRetail investors shouldn’t be investing in individual stocks outside of industries they understand well. Following GAAP is the definition of not hiding the obligations.
- roymasad 2mo ago[dead]
- senshan 2mo agoAs long as this debt does not make it into life insurance and pension funds, we are fine. The trouble is that private credit is taking control of some life insurance companies and off-loads this debt to these. When these fail, it will become everyone's problem. > Risks to financial stability may also stem from entities with particularly high exposure to private credit markets, such as insurers influenced by private equity firms and certain groups of pension funds. The assets of private‐equity‐controlled insurers have grown significantly in recent years, with these entities owning significantly more exposure to less‐liquid investments than other insurers https://www.imf.org/-/media/files/publications/gfsr/2024/april/english/ch2execsum.pdf https://www.imf.org/-/media/files/publications/gfsr/2024/apr... https://www.imf.org/-/media/files/publications/gfsr/2024/april/english/ch2.pdf https://www.imf.org/-/media/files/publications/gfsr/2024/apr...
- skohan 2mo agoCouldn't it be a problem given the concentration of the S&P in these companies? At this point these companies make up a huge portion of 401k's for a huge chunk of Americans. How would it affect retirees if they dropped 40-50%, likely taking the market with them?
- tyleo 2mo agoIt’s an interesting thought. The growth is so extreme that if the S&P 500 fell 50% today it would reach levels last seen in 2022. Given that the timespan is so short, I’m honestly not sure it would be as bad for 401ks as people expect unless all of your investment was concentrated in the last 4 years. I suppose it’s worse if your calculation is, “I’ll retire when my 401k hits $X absolute value,” but I think most people just retire at a certain age instead with risk spread across decades.
- Imustaskforhelp 2mo agoDuring the dot-com crisis. Nasdaq fell around 78% from its peak and S&P by around 49% so it isn't unprecedented (ironically has both aspects of being both tech and are within the same time-era) It created an actual recession albeit thankfully short one for the case of dotcom (sadly not for 2007) and a really recessionary environment which causes unemployment and just straight up fear and panic. I do understand what you are talking about and overall in long term, perhaps things flatten out but atleast speaking financially so, its better to be on a smooth sailing road rather than insane ups and downs with retirement money if preferable. > I think most people just retire at a certain age instead with risk spread across decades. The issue in my opinion is with people near that certain age you mention and who retire in the time during boom just before bust. They would then get the 50% hit on their savings instantly with an recession/inflation/unemployment environment which in my opinion might be genuinely devastating. (supposing that they had their investments in stocks, I wouldn't consider that any retiree would have all their money in stocks but there have been some other comments which show a sizable amount, @kipchak's comment shows 50% stock for retirement. so a 50% shock on top of that could lead to a wipe out of 25% of your retirement fund which is honestly still pretty crazy.)
- u1hcw9nx 2mo agoOnly Oracle is in any kind of danger from their debt load, though. I have not checked SpaceX situation. Meta, Google, Amazon, .. they can take the hit and go on.
- Noaidi 2mo agoIt would be better if you all read the article this article was referring to: https://asia.nikkei.com/business/technology/five-us-tech-giants-hidden-debts-soar-to-1.65tn-on-opaque-ai-funding https://asia.nikkei.com/business/technology/five-us-tech-gia...
- tmp10423288442 2mo agoBut it's behind a paywall, so not that easy
- simonw 2mo agoSomething doesn't quite smell right about this story. Here's a key paragraph from the Nikkei story that this Futurism story re-tells: > Companies disclose such future debt not in their balance sheets, but in annotations to their quarterly financial statements. This is a legitimate practice under accounting rules, but may make it difficult for retail investors to recognize risks. Does that justify a "tries to hide" headline? This is also one of those cases where the headline is free but the details are behind a paywall. I do think the story itself is notable, but I expect the discussion is going to lack some nuance.
- xhkkffbf 2mo agoGosh it would be ironic if they were hiding the nuances behind the firewall in a way that makes it difficult for retail investors to read.
- npilk 2mo agoIt's cute they think 'retail investors' are reading balance sheets in the first place.
- enraged_camel 2mo agoFuturism has a pretty strong anti-AI bias. Both article titles and the articles themselves tend to be editorialized. On a scale of zero to Ed Zitron, they're somewhere around the middle. I don't treat it as a reliable publication when it comes to anything AI related.
- aphysically 2mo agoPurchase commitments aren’t even future debt, they’re a future asset
- martinbfine 2mo ago[dead]
- __natty__ 2mo agoIs the bubble bursting? Amount of the news about bad shape of companies highly invested in AI in the past days are quiet alarming or is it just bias?
- HDBaseT 2mo agoThe market can remain irrational longer than you can remain solvent.
- DenisM 2mo agoThis media frenzy can go on forever tho. A Bear Sterns moment would be more solid. Oracle might ge the first to collapse if things go south, so we might be fine until then(?).
- TacticalCoder 2mo ago> Oracle might ge the first to collapse if things go south ... Truth be told ORCL already kinda went south: they're down 65%, at $120, compared to their all-time high.
- DenisM 2mo agoNot quite a Bear Sterns scale event.
- mrbluecoat 2mo agoAlternative title: Memory, GPUs, and SBCs are about to become affordable again :)
- 1970-01-01 2mo agoThe crux of the problem is models are not evolving anymore, they're iterating. Cheaper, faster, better. We're only seeing better, and that's because there is fierce competition with massive debt behind it. The "cheaper and faster" part is all taking place with local models. All of this adds up to a big red flag for a bubble.
- JohnMakin 2mo ago> Meta alone has amassed around $420 billion in off-balance-sheet debt, according to Nikkei, Isn't this an existential type of bet?
- kingjimmy 2mo agoyes and no. With 82 billion in cash and 22billion profit per year, they can easily service it for a while even if AI consumption takes a downturn.
- Marsymars 2mo agoThat's their quarterly profit.
- LearnYouALisp 2mo agoAbsolutely disgusting.jpg
- danny_codes 2mo agoDealing drugs is highly profitable
- dnnehgf 2mo agoyeah my read is that this industry was for a long time underlevered; these companies were generating so much cash that the only meaningful candidates for investment were in effect moonshots with highly unpredictable returns, and you can't fund those bets with debt. but now the story is different. while the effects of ai on other industries and classes may be unpredictable, (a) the tendency toward ai itself (the market demand for economically useful intelligence) seems plausibly more inevitable than any tendency in the history of capitalism (certainly more inevitable than any in the history of these big tech companies) and (b) the technical scaling laws have been eerily steady (intelligence as log of compute). taken together, (a) and (b) make it much easier to finance than anything meta or google or microsoft have ever worked on. there are risks, but there is at least also a model, a projection; that model did not formerly exist, for these companies. anything outside their core business was literally a guess. the upshot of these stabilizing patterns is that the industry is in a certain sense just maturing. that is, its financial profile is starting to look more like other mature industries that are mostly juggling around known quantities to try to get a small edge that they can, with financial leverage, magnify enough to M&A the competition away and thereby secure the only relief possible in a well-delineated, well-populated niche: monopoly by scale/consolidation rather than by differentiation. (which is not to say that these mature industries are less competitive! they are actually more competitive; the intensity of the competition is what drives the "anti-competitive" behavior.)
- luciana1u 2mo ago[flagged]
- logicallee 2mo agoThey're obviously not taking on enough debt because I'm paying $200 per month for one AI, $100 per month for a second, a $20 "donation" to Gemini[1] paying for a service I never use just to fund its development, and yet here I am doing my own laundry, making my own damn breakfast, lunch, and dinner and manually tracking my Calories and macros, I'm putting my own damn dishes away, racking and unracking my own damn weights at home, and taking minutes to set up and record my exercise form and then take screenshots of it of key frames that I manually ask the AI's to form check (they don't consume video natively as an input) rather than have a robot do any of the above (including act as a fitness coach) because where's my household robot I can rent on a monthly payment? Can't be that expensive, servos and pressure sensors and cameras are cheap, what's missing here is that here we are and AI can't do shit for me day to day other than knowledge work and software engineering. I'd like these companies to take on as much debt as possible and rent me a robot that can do stuff for me. I have a petition for this that you can sign here if you want: https://www.change.org/p/create-a-physical-embodiment-for-claude https://www.change.org/p/create-a-physical-embodiment-for-cl... [1] I don't use Gemini for anything ever, I pay just to put my vote to them making a useful model (I know my $20 isn't much but I apply Kant'e categorical imperative - if everyone did it they'd take their AI seriously and not be in last place behind OpenAI, Anthropic, and even open-weight models).
- jraph 2mo agoYou are donating money to Google, one of the richest companies in the world? It really doesn't need your help, and it's already way too powerful. If you have money to spare, can't you give to good causes instead?
- logicallee 2mo agoI also give to good causes.
- LetsGetTechnicl 2mo agoThis is probably bad right?
- daishi55 2mo agoArticle appears to be conflating big tech companies that print money with AI startups like OpenAI and Anthropic. After the opening paragraphs about the accounting practices of meta, Microsoft, alphabet, etc - which, it should be noted are not “houses of cards” and earn plenty of money - the article quietly transitions to > Experts continue to warn of an AI bubble, noting the enormous and widening gulf between company valuations and their comparatively measly profits. I think hoping people will apply the “house of cards” logic by that analyst they quoted to the startups, when instead the analyst was talking about the megacorps’ accounting.
- songhonglei1985 2mo ago[flagged]
- emberagentic 2mo ago[flagged]
- jimnotgym 2mo agoIf I were nearing retirement and had a decent pension pot where I could control it in fine detail...I would be diversifying away from tech stocks and holding some cash for immediate needs. There probably won't be much time when it unravels...I wouldn't be over exposed to the Nasdaq 100, for instance. Although you could probably pick some AI safe companies out of it. The real problem will be figuring out where all this debt is
- cj 2mo agoThe problem is 1) the Nasdaq 100 is where the majority of gains are coming from, and 2) it very well might be another 3+ years before anything unravels, if it unravels at all. If you're truly at retirement, absolutely cycle out. But if you're still young and trying to maximize portfolio growth, it's not obvious that a non-tech strategy would yield better returns.
- Analemma_ 2mo agoYou should have at least some money outside of tech to hedge though. There are "everything but tech" mutual funds and ETFs, and I keep about 15% of my investments in there.
- jimnotgym 2mo agoIt's a really good point, and you will have time for the recovery. But counterpoint, the S&P 100 gained over 24% this year. FTSE gained nearly 18%. Still good gains vs inflation!
- godwinson__4-8 2mo agoAnother thing to remember - rebounds are highly compressed. If you try to get out ahead of a downturn, you will not only likely mistime your exit but also miss the rebound. It can keep going down or stay flat for sometime. But when it rebounds, it does so quickly [1]. Don't try to be too smart. Especially if this is not your full time job. The market is not rational. Dollar cost averaging and proper risk allocation is the way. [1]https://www.hartfordfunds.com/practice-management/client-conversations/managing-volatility/timing-the-market-is-impossible.html https://www.hartfordfunds.com/practice-management/client-con... & https://www.fidelity.com/learning-center/wealth-management-insights/3-reasons-to-stay-invested https://www.fidelity.com/learning-center/wealth-management-i... (if you prefer an additional source)
- rvz 2mo agoThis is the tech industry's version of 2008.
- abernard1 2mo agoIt is. A predictable reset schedule with refinancing ("valuations"). Loose money leading to debt obligations to be paid in the future. Circular financing. And what's funny, is it's precisely the off-book debt that will make the compression happen slowly. There's no bailouts this time.
- beloch 2mo agoGiven that AI exec's have been careful to lavish praise (and cash) on Trump for the last few years, I suspect bailouts will not be off the table.
- abernard1 2mo agoI suspect bailouts will be off the table. Simply because the people who support OpenAI and the tech industry are on the same side of the political aisle as the people protesting data centers. "Big Tech" as a pejorative started on the Right. That never changed. Remember the hubbub about companies having "free speech" while they deplatformed and censored critics? That never sat well with a certain group of people. And they're the kind of people with long memories, that might have guests entertained as a visible sign of submission, and not as friends. The more interesting revelation will be if certain persons can psychologically come to admit the people they are against are politically aligned with them, and their opponents are more intelligent than they are willing to let on.
- lacoolj 2mo agoThis post should probably get removed by now See here https://news.ycombinator.com/item?id=49027426 https://news.ycombinator.com/item?id=49027426 Your lease agreement with your landlord isn't debt (though if you don't pay it, you will get a hit on your credit report)
- aphysically 2mo agoThe lease agreement does become a financial liability and corresponding asset when it commences. In this case the article is adding leases that haven’t started yet, so GAAP accounting rules prohibit it from being listed as a liability. As a result it’s disclosed in the notes. nb the typical US investor way to analyze it is to still not treat operating leases as debt, since the rent is already reducing the EBITDA (a proxy for cash flow before debt items are paid). The other way to do it is you add back the rent to your cash flow proxy and count the leases as debt. You end up in a similar place.
- FabHK 2mo agoIf you're talking about dodgy accounting at hyperscalers, a larger worry might be that they are overstating profits by depreciating their assets (such as datacenters and CPUs/GPUs) too slowly. Estimates are that this could overstate profits by tens of percent. (However, this only allows earnings to be "pulled forward" - sooner or later the servers must be written off and the accounting catches up.) See e.g. https://deepquarry.substack.com/p/depreciation-of-gpus-between-useful https://deepquarry.substack.com/p/depreciation-of-gpus-betwe... https://www.ft.com/content/0dbfe94f-2136-432c-b075-4587092dee58 https://www.ft.com/content/0dbfe94f-2136-432c-b075-4587092de... Michael “The Big Short” Burry: > Understating depreciation by extending useful life of assets artificially boosts earnings -one of the more common frauds of the modern era. https://x.com/michaeljburry/status/1987918650104283372 https://x.com/michaeljburry/status/1987918650104283372
- aphysically 2mo agoThey’re talking about accounting at big tech and not hyperscalers
- polski-g 2mo agoH100 rental costs are increasing. If anything those GPUs should not be marked down at all. Burry is wrong.
- 6thbit 2mo ago[dead]
- andreygrehov 2mo agoIs that why China pushing for open weight models? If these models are on par with the quality of the proprietary ones, the US stock market will go south fairly fast, imho.
- trhway 2mo agoFor the last 20+ years i was really relaxed about tech industry - the fat cash positions maintained by the companies as a lesson from the early 2000-s crash (when companies were running out of cash and failing or severely downsizing, etc.) almost guaranteed that the tech will easily weather any trouble times - and that was clearly demonstrated in 2008 and in 2020. Now i'm starting to get scared - these cash positions are basically gone if matched against the new debt and various creative financing taken on for the AI buildouts. That looks a lot like 2000 - very promising tech everybody is piling money in. And i'm sure that several years later it will provide several decades of tremendous success like Internet did in the last 20 years. It is just those few initial choppy years of the hockey stick trough that we may be coming upon and that many may not survive not having that fat cash position anymore, and thus those years may happen to be very painful for the tech and for the whole economy. 25 years ago there were a lot (estimates put even as high as 95%) of dark fiber left as a result of the dotcom buildout and crash. It was successfully put back into action several years later. I wonder whether we will have similar dark datacenters in a few years.
- neuroelectron 2mo agoOh, that's crazy when you buy every single piece of computing hardware that's ever been made in the last five years, for inflated prices to preempt competition, then sit on it because there isn't enough electric in the entire world to power it, do you think that would be pure profit?
- jnyst1985 2mo ago[dead]
- PeterStuer 2mo agoWhat if Enron and CDO's had a baby ...
- MikeDods 2mo agowhat ppl in this thread dont realize is: you gotta spend money to make money
- mark_l_watson 2mo agoI am repeating myself: at least a partial solution is enforcing anti-dumping laws, that is, make money losing subscriptions illegal. If businesses and individuals pay actual token costs, then they will naturally only use tokens in ways that make business sense. Usually I applaud optimism, but the current approach in the USA will probably adversely affect most non-rich people, and I would like to see more public well grounded in reality pessimism.
- ghtbircshotbe 2mo agoThe article is light on details. Presumably the original Nikkei article has more details but it's behind a paywall. Recently watched Enron: The Smartest Guys in the Room. I still don't know how Enron made money which remarkably seems like it was also true at the time.
- casey2 2mo agoExperts say that they aren't.