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Why Wall Street is ignoring big tech's debt [video]
- spwa4 2mo ago[dead]
- recursivedoubts 2mo agoto modify sinclair: it is difficult to get a man to understand something, when his bonus depends on his not understanding it
- johnbarron 2mo ago>> when his bonus depends on his not understanding it As he explains here: https://youtu.be/NufJ7g63KSY?t=1233 https://youtu.be/NufJ7g63KSY?t=1233
- gedy 2mo agoTINA, There Is No Alternative
- ProllyInfamous 2mo agoThat's funny because this still tracks when you use the Craiglist-interpretation of "Tina" – still, there is no alternative when you're smoking it [0]... [0] I do not recommend smoking it, with well-over a decade "clean" (currently watching a good neighbor succumb to it, which is awful to witness)
- aurareturn 2mo ago[dead]
- steelkilt 2mo agoIt might be more accurate to say that many retail investors are ignoring big tech’s debt.
- johnbarron 2mo agoThe papers mentioned: 1. — "The Big Market Delusion: Valuation and Investment Implications" - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3501688 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3501688 The paper behind the "big market delusion" he discusses. 2. - "Do Stock Prices Fully Reflect Information in Accruals and Cash Flows About Future Earnings?" - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2598 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2598 This is the "accrual anomaly" paper Boyle describes. 3. - "The ‘Incomplete Revelation Hypothesis’ and Financial Reporting" - https://publications.aaahq.org/accounting-horizons/article/16/3/233/1732/The-Incomplete-Revelation-Hypothesis-and-Financial https://publications.aaahq.org/accounting-horizons/article/1... Paper explains why information can be public yet still not be fully incorporated into prices when extracting it takes effort. 4. - "Limited Arbitrage in Equity Markets" - https://www.hbs.edu/ris/Publication%20Files/Limited%20Arbitrage%20in%20Equity%20Markets_b0527518-7bfb-435b-a926-7a6d235693db.pdf https://www.hbs.edu/ris/Publication%20Files/Limited%20Arbitr... Mitchell and Pulvino work on the "limits of arbitrage." 5. "How Pervasive Is Corporate Fraud?" - https://www.chicagobooth.edu/research/rustandy/social-impact-research/research-papers/2021/how-pervasive-is-corporate-fraud https://www.chicagobooth.edu/research/rustandy/social-impact... The paper on about one-third of corporate fraud is detected 6. "There’s never been a better time to commit financial fraud" - https://www.economist.com/business/2026/07/29/theres-never-been-a-better-time-to-commit-financial-fraud https://www.economist.com/business/2026/07/29/theres-never-b... 7. "Firm Data on AI" - https://www.nber.org/system/files/working_papers/w34836/w34836.pdf https://www.nber.org/system/files/working_papers/w34836/w348... The Bank of England study on executive AI usage and productivity.
- WarmWash 2mo agoI don't know a single white collar worker who isn't using AI for their job. Not like forced, but like "Oh damn, this bot thing can do a lot of tedious leg work for me". To think that people won't pay $60-$80/mo to continue using it is wild to me. In a white collar environment it pays for itself in a few hours of use. If you focus on how much value AI brings to people (mostly in time saved), the bubble hardly looks bubbly. Did Uber die when a trip across town went from $3 to $13? No. It's giving more rides than ever, 10x more than when it was $3. I'm sure there will be some losers, but unlike the dot-com boom, the entirety of the population already has all the tools needed to leverage AI.
- mr-pink 2mo agousing how?
- acivitillo 2mo ago$80 per month in a 5,000 people Enterprise is 400k per month which translates to ~5m per year. That is easily in the 8-16% of their total IT budget. I don’t know you, but companies don’t like to increase recurring cost. Is AI good? Yes. Is it clear how it generates enough ROI to justify a material IT cost increase? No. This is the problem now, not how much white collar workers use AI, but what is the productivity narrative of it. Because AI is so generic, there is no clear specialized use case, like when Salesforce invented the CRM for example.
- generic92034 2mo ago
- amelius 2mo agoIs Sam Altman even allowed to rent a car with his level of debt?
- WhrRTheBaboons 2mo agohe just rings up his microsoft daddy
- igor_nast 2mo agoAs long as the money printer is running...all Quiet on the Western Front
- TacticalCoder 2mo agoIt's a near guarantee that when things shall heat up and the stock market shall crash and people are going to say that "this time it's worse than 1929", we'll hear the brrrrrrrr sound of the money counterfeiters, very likely synchronizing their counterfeiting operations worldwide (US / EU at least) to print ever more money.
- cm2187 2mo agoIs this an AI generated video? The guy didn't blink an eye or moved the head more than one inch in 30 minutes!
- gilleain 2mo agoHah instantly knew it was a Patrick Boyle video. He's a well-known expert in rap music that also does finance on the side.
- tim333 2mo agoTrue. He mentions AI vids and rap here https://youtu.be/Ak4on5uTaTg?t=161 https://youtu.be/Ak4on5uTaTg?t=161
- tim333 2mo agoNo. There's a blink at 11:04.
- mitthrowaway2 2mo agoI think he just cuts a lot of takes together. It's his style.
- johnbarron 2mo agoWe now have several voices saying the same: "Aswath Damodaran: Big Tech Has No Idea How AI Pays Off" - https://news.ycombinator.com/item?id=49229981 https://news.ycombinator.com/item?id=49229981
- yeezyszn 2mo agoWall Street makes money from issuing debt, trading debt, and IPOs. They need to get the last two mega IPOs off before the curtain call on this era. But they can only partially influence the market, they can’t control it. The question is if the market will let them get these IPOs off or if the jig is up. Here’s an exercise for anyone curious: pull up the median stock in the S&P 500. Look at its P/E. Take 15 minutes and look through the company’s financials and figure out what you think about the quality of its earnings. Then decide if that P/E is appropriate. The bubble isn’t in just AI, the bubble is everywhere, and AI is its largest manifestation.
- andrekandre 2mo agoits almost as if we over-financialized our economy...
- arisAlexis 2mo agoCapitalism works with debt for growth. Strange HN doesn't understand this
- TacticalCoder 2mo agoAnd capitalism also works with crashes taking unprofitable companies down. And frauds, eventually, gets companies valuation like Enron and FTX to zero. And people go to jail. Now I'm not saying OpenAI or Anthropic are frauds. What I'm saying is that, eventually, things revert to what is just. The late 90s SV tech-bros behind pets.com or webvan for example faked it for 18 months to 36 months or so. At some point when the expenses outnumber the revenues, capitalism does its thing.
- arisAlexis 2mo agoYes and since there is no fraud there is no reason for this panic they know what they are doing
- boesboes 2mo agohahahahaahahahhahahhaaa
- camillomiller 2mo agoDelulu much? My God some people
- nitwit005 2mo agoA number of famous business leaders have admitted they had no idea what they were doing in their memoirs. A few have even suggested that was an advantage. Everyone running these AI firms is being forced to make educated guesses about the future of the technology and the industry. It's unlikely they're all making accurate predictions.
- wanda 2mo agoSubsets of HN do understand this. Subsets of HN just want to know how long before they need to withdraw their savings, or sell their position. I would say growth is even expedited with high allowances for borrowing/leverage, but at the cost of increasing systemic risk. Obviously the people who will suffer from this are the taxpayers, who don't get a say in the matter, so no one is going to stop and consider whether it's a bad idea to continue issuing more and more debt.
- bnfcl 2mo agoThe creativity of the financial industry is quite insane. Combined with the scale-at-all-cost strategy in AI companies, this is a ticking time bomb, no doubt. I think it is easy to forget that a revolutionary technology does not automatically make a viable business model. I think we are yet to see the real winners in this game.
- Breza 2mo agoI agree with you. Look at railroads, cars, computers, and other technologies that really did end up being world-changing. How many of the original companies are still around? Sometimes I feel like OpenAI will end up like Fairchild Semiconductor: an early innovator that quickly became an historical footnote.
- tim333 2mo agoThere's a kind of inconsistency in that he ends the video talking about overpriced stocks and how it's hard to short them but the title is about the $1.75tn in debt which seems to mostly be from professional investors, apparently: >JPMorgan Chase and Morgan Stanley, private equity and credit giants like Blue Owl Capital, BlackRock, and PIMCO, alongside international commercial banks who probably know what they are doing and read the footnotes. My guess is that the lending is actually ok because there's a lot of real demand for compute. $1.75 tn is about 1.4% of global GDP which doesn't seem that silly in the AI boom.
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