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What specifically is the bubble you're talking about? Like which asset is seeing a runaway increase in valuation detached from fundamental value?
by jdm2212 29d ago
What specifically is the bubble you're talking about? Like which asset is seeing a runaway increase in valuation detached from fundamental value?
- tobinfekkes 29d ago... All of it? Does a bubble need to be confined to one vertical? It seems like The Bubble is just the sum of a bunch of other individual bubbles.
- jdm2212 29d agoA bubble is a debt-fueled run-up in asset prices driven by over-optimistic projections of future fundamental value. The housing bubble was people borrowing money (debt-fueled) to buy ever more expensive houses (rising asset prices) on the assumption home values would always keep going up (projection of future value). '90s tech bubble was similar. Where are you seeing that now? Which asset is over-valued?
- adammarples 29d agoSpacex for one. An AI company they say.
- cdrnsf 29d agoTheir debt load and infrastructure costs compared to their relatively meager earnings and widespread public distrust is concerning, no?
- jdm2212 29d agoWho is "they"? NVIDIA? Google? Anthropic?
- cdrnsf 29d agoOpenAI, Anthropic, Google selling equity for the first time since their IPO, all of the downstream consumers of the frontier labs. NVIDIA is perhaps the only one profiting from actually selling something. Who hits a liquidity event before the house of cards blows over?
- jdm2212 29d agoThe original claim was "Their debt load and infrastructure costs compared to their relatively meager earnings..." which is just obviously not applicable to Google and NVIDIA, which both crank out more than $100 billion per year in profits. They can literally take on almost a trillion dollars each in debt to finance data centers and still be in reasonably good financial shape. OpenAI and Anthropic are not very profitable (yet!), but rely mostly on equity financing, not debt. So no debt load issue there either.
- cdrnsf 29d agoOh, wonderful! OpenAI and Anthropic's structural inability to earn a return for there investors should be no problem. What is NVIDIA's outlook should their customers' funding run out? Or what's the long tail outlook on Google killing its search product?
- jdm2212 29d agoGoogle search only dies if AI wins, in which case there's no shortage of demand for tokens. NVIDIA's revenue just doubled year-over-year; even if token demand cools off and they slow to say 25% growth, they'll be fine. OpenAI and Anthropic not making money would be sad for their shareholders, but that's sort of a different topic from whether the "debt load" you originally cited will be any kind of a systemic problem (it won't).
- cdrnsf 29d agoOnward to robot god nirvana, the dead red rock in the sky and all that then.