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#money#companies#debt#lot#more#where#investors#inning#don#immune
Discussion (90 Comments)Read Original on HackerNews
Sorry to break it to you but you are neither immune nor a bystander to the fortunes of AI going down. You are part of it all whether you like it or not.
I'd love to live in a world where AI firms bidding these things up doesn't affect me but I'm really struggling to understand how they aren't impacting the market.
We have only begun to extract the value of commoditized intelligence. Sure there are arguments on local models and pricing power.. but I think we will be compute constrained for the near future.
Journalists have been eager to call AI "over" since 2022, and yet:
- Models just got good at writing code this year
- Models just got good at editing images last year
- Models just got good at cinematic video this year
This hasn't even played out. It hasn't even started.
Why on earth would this be the end?
The robotics story is just getting started, too.
I literally do not write code anymore.
Similarly, majority of people still don't 3D-print stuff they can get cheaply at Walmart or from Amazon. Or use VR/AR as their primary form of interaction.
I too would use "plenty" rather than look at the horribly depressing stats.
One thing's for certain: There's no way anyone who's come close to Sauron's Ring (made actual use of AI) wants to part with it :')
Ever since the 2008 housing crisis, people have been predicting the next bubble-burst/black-swan event.
The one that really crushed the markets was the one almost body saw coming: Covid-19.
Tulips, 1929, Dotcom, Great Recession, 2010's Flash Crash - none of these were in the public discussion before they happened.
Although at its peak, CSCO was up ~2500% in a 5-year period, whereas NVDA is “only” up ~1000% in a similar timeframe.
Fiber and railroads don't need tens of billions of dollars in continuing yearly maintenance expenses to keep them from going stale.
For those without accounts, given faded body
Now if the number was ?? and labeled "undisclosed"... that would present a more serious problem.
A lot of publications pay attention to that.
A lot of people love reading things (often only reading things) that make then feel right/correct/justified.
A lot of publications live or die on ad views.
And just like that we have a viable media business model!
FWIW Enron was also a „sophisticated company“ at the time
There's an old WSB saying: the market can remain irrational longer than you can remain solvent. The AI craze is that but on 'roids.
> These are incredibly sophisticated companies so presumably they wouldn’t let themselves get into a company ending bind.
The problem is, company C-levels don't care about the long term health of the company. They only think about next quarter (in a misguided interpretation of "shareholder duty/fiduciary duty") and their bonuses tied to their KPIs.
> But what are the chances this is actually an MBS type situation where the system is truly overloaded and a few sacrificial lambs are needed?
The system definitely is overloaded to hell and beyond after well over a decade of ZIRP. That money never got deflated out of the system in a healthy way and now everything is looking to fall apart.
Unfortunately, such events are already "priced in". VC essentially is built on 1 of 100 investments striking it big and 99 going bust. A market correction won't hurt the big guys, but it will definitely hurt all the small guys.
We need to stop thinking that just because they have money they're incredibly sophisticated. We have a few examples like Mark Zuckerberg, who had early success with FB, but he seems to be incapable of investing in profitable products. E. Musk: great at selling his companies, but laughably bad at making profits at the same level of expenses. Sam Altman: never had a real job he did well other than raising money. This is the kind of people that control these companies.
NVDA had the foresight two decades ago to invest in CUDA. That's not next quarter thinking.
eh trolling for clicks. It's just not on the balance sheet (if i have my terms correct) so you have to look in a different report to find the numbers. If it was truly hidden then discovery of the debt would trigger lawsuits from investors. Major investors know about it already that's why no one is getting upset over it except for laymen. btw, laymen in the stock market (retail investors) just serve as red meat or cannon fodder for actual traders with real money and real information.
edit: there will def. be significant winners and losers, the stakes are very high and the dollar amounts are very large.
Headline doesn't really match the facts in the article. The article seems to say "hyperscalers are borrowing an enormous amount and so far people are lending to them. Other people are worried that this will stop".
You say this as if when "lending stops", it isn't a big deal. What you're describing is a concern for a collapse in finance markets.
My future's so bright I gotta' wear million dollar shades.
The Wall St vs Silicon Valley showdown that’s setting up here looks like it will be quite epic. If last week was any preview, get your popcorn ready.
Pure play companies, startups, and investors are looking a lot less safe. For example there are other pure plays where debt service alone is like 25-30% of revenue, which is just insane numbers. There are also many investors and funds with extremely precarious positions in AI that are at risk of unraveling with a bang like we saw last week.
Still no credible long term solution to the so-called "UBI" for all and the abundance fantasies and the utopia that was supposedly "promised".
chuckle
That setup isnt true for the US, not even close.
Any historical precedent for this all occurring together with technological hype/fast growth?
> And unlike earlier periods of heavy debt, the Federal Reserve is no longer a big buyer of Treasuries, placing a heavy burden on private-sector investors.
You may have seen the headline recently where Sec. Bessent held up a mockup of a bill printed out on a regular sheet of letter paper[0], and there's bill circulating to change the law, but it will not pass[1].
0: https://ichef.bbci.co.uk/news/1536/cpsprodpb/97ed/live/f6126...
1: https://www.congress.gov/bill/119th-congress/house-bill/1761