hmm, where have I seen this before? 🤔

During the last bank bailout by the Obama administration? Vote establishment Democrat in midterms, they surely wouldn’t do the same thing.

The primaries are over mate.

You think that wanna be tankie knows what a primary is?

A US citizen from Washington State doesn’t know what a primary is? Are you the stupid one? Also, what makes me a tankie? The fact that I don’t believe in kidnapping and beating people to fight on behalf of Zionist-controlled countries?

Read what was typed. Understand what “wanna be” means. Reflect of your “Same sides” comments.

Then politely fuck off.

Were ? Maybe that bizarre land between Mexico and Canada ?

Buckle up kids. It’s gonna be a fun ride.

2008 calling? 📞 ✨

2008 will be a nice memory compared to what’s coming

Don’t worry, the people responsible in 2008 were held accountable. They also didn’t profit massively off the economic collapse. Frodo also got the ring to Mordor. He had some help, but the ring was ultimately destroyed.

One part of that is just a story. As for the other part: I'm glad Frodo made it with help from his friends.

My favorite quote from The Big Short:

In the years that followed, hundreds of bankers and rating agency executives went to jail. The SEC was completely overhauled, and Congress had no choice but to break up the big banks and regulate the mortgage and derivatives industries.

Just kidding. Banks took the money the American people gave them, and they used it to pay themselves huge bonuses, and lobby the Congress to kill big reform. And then they blamed immigrants and poor people, and this time even teachers.

Dr. Burry! If the investors withdraw, what's gonna happen here? Are we done?

Honestly, I don't know! The... the... The bonds aren't going down! They won't move! It's possible that we are in a completely fraudulent system.

Or... you're, you're wrong.

Sure! It's possible, I just don't know how!

You’ll never guess Burry’s current companies he’s shorting lol

So true, and God damn so effective.

Obama’s biggest failures are not going after these fuckers and the W war criminals

I thought his biggest failure was his raining hellfire on whistleblowers, kids protesting, and immigrants, but I’m willing to debate this. The real sting is that we had such high hopes and we got …that, instead, and then Biden after. I was so happy when Obama was elected the first time.

2009 should have been the end of trying to “reach across the aisle.” 2010 should have been the end of the filibuster.

I never had high hopes, sadly I called it.

For the most part, as usual the democrats did even worse than I thought they would, but I also called that, but they did worse than even I knew they would do worse.

HOPE was his campaign slogan, after all…

They blamed all the foreclosees loudly and publicly despite it being their own fault, while they got bailed out on our tax dollars. Insult to injury the rich blaming the foreclosees hardly even pay any taxes.

Who was held responsible? That was a big joke.

Sauron

One brown man faced legal consequences for the 2008 crash. One brown man.

Marge is calling

The Simpsons prove to be good prophets again.

2008 USA had the financial means to avoid the worst. This isn’t the case anymore.

If by fun, you mean existentially bad and the death of the republic in all but name to be replaced ultimately with military rule that will become increasingly despotic while the country burns, then yes, I would agree.

Another once in a lifetime event.

GenZ Literally never having seen a functioning economy (at least while being old enough to meaningfully comprehend its existence) I imagine Generation Alpha is gonna have it even more fucked.

Please oh please let’s get this going already

Why do you want it to happen? What good will come of it?

You mean the shit head leads of tech industry collapsing? The end of the rampant circular investing? The end of the race for AI that doesn’t really do anything? Crashing the current economy?

I mean take your pick, I want all of these.

What about the rest of the country getting mega fucked? Where did you work in 2008? Did you own a home? Do you know what it was like?

I’m not saying these asshole deserve it, but I’m scared of going through 2008-2013 again.

I was very aware of what 2008 was like.

We need some kind of massive reset in this economy, we can’t just keep line going up. The current economy is built on eggshells and even if the tech industry doesn’t implode, there are plenty of other things happening that will cause one anyway. We WILL have a full blown recession/depression again. It’s just a matter of when.

The longer the crash takes to happen, the more malinvestment that is occurring, the more painful the recovery to be. If you want this to be as painless as possible, you want the crash to happen immediately.

Not the country the world.

I can’t wait for PC parts to be super cheap. I saw somewhere that, bubble-pop-notwithstanding, NVME production is projected to hit a level within a year or so that will outpace even the last year’s demand for storage and could even drive prices for storage down to below what they were prior to the bubble. Oh, and that’s even accounting for inflation. So when the bubble does pop, we are going to have an absolute storage glut.

The fact that the rest of the world is going to be miserable and impossible is another matter entirely, but at least I’ll have my hobby.

SanDisk has been through a tech bubble before, and that’s why they fixed their prices to provide data centers with drives at 2026 prices for the next few years. That is not a bet on hardware prices continuing to go up.

There’s gonna be a truly biblical supply glut shortly after the bubble pops.

Okay maybe, and I would love that, but are we going to have the capacity to take advantage of it or will we be busy worrying about rent and food?

Someone said recently to check and make sure wherever we hold our pension funds aren’t using them to invest in the bubble.

Yep, that is indeed a fantastic idea. I don’t have a pension myself, just a 401k and some IRAs, but I’ve diversified most of my investments away from “AI” bullshit, as well as largely away from US things in general, because the US is absolutely going to be the nexus of the coming shitstorm. Amusingly, this has also helped me to more or less beat inflation with my investment accounts, which is a nice perk.

The AI bubble bursting will have a huge effect on the US economy though, so who knows if people will even have the money to afford it. The whole economy is being propped up by AI at the moment.

The problem with solid-state is there is a write max out. I’ve had one drive do it, and luckily, I was smart enough to run RAID-1.

And old spin drives have a limited lifespan as well thanks to wear and tear on mechanical parts. Whichever tech you prefer has its own unique drawbacks.

RAID and backups are the only surefire way to protect any amount of your data long term.

Time to enjoy the bubble burst

You get a fee they get a fee everyone gets a fee!!! To let the boys take over lmao wtf are prime thinking

Oracle might be the first. Watch it closely

If Oracle pops, does this affect the WBD/Paramount/Skydance deal?

I am not one to say

we can only hope, but my guess that the deal is partially an attempt to diversify holdings away from orcl and partially an attempt to drive the narrative via the megaphone they just accepted to get a bailout and other favorable regulation.

deal is already done. UAE/KSA love USA too much to have backed down. Stock value of Skydance has been dropping hard, though.

I have an idea: they could package all the AI debt into securities and then sell it off in small pieces to individual investors. By spreading out the investment over many different loans, the risk of default will be greatly reduced. It’s not like ALL the AI companies are going to default all at once, right? Ha ha.

Probably related to the now three Oracle data center that can’t get electricity.

Wisconsin passed a law that fast tracking large projects requires a high credit rating or collateral, to pay secure costs for building the power plants needed for the data center. In July Oracle’s debt rating was downgraded to near junk levels.

That means Oracle can no longer get Wisconsin to supply power to the data center so it’s a $15 billion dollar paper weight. Thats putting even further downward pressure on their credit rating and ability to secure loans to meet their $500B in obligations.

Now Oracle’s New Mexico data center is stuck due to contract issues with water and gas turbines, so they can’t move foreward. Oracle has a 9% interest rate on the loans to build that, then they raise 2% after construction, because their credit rating is dogshit. So now Oracle is claiming force majeur to get out of their increased debt obligations, which you can imagine, is killing interest in lending to them.

In Texas they just blocked new grid hookups over political backlash to skyrocketing electricity prices. That killed another Oracle expansion they just canceled, and another one is trucking in gas for gas turbines as an alternative to the electrical grid, which you might imagine is expensive.

Which brings us to now. The banks are looking at local opposition blocking these projects (local action is working), states are blocking them to avoid getting voted out, hardware costs are shooting up, and the assets backing these loans are too small for so much investment.

So the level of risk no longer works.

—

My personal theory is that Oracle is a sacrificial lamb. It’s a dead end tech company that lives on licensing fees, and they’ve fucked themselves on these expansions. They’re failing at being a hyper-scaler as margins decrease.

I bet we see someone take Oracle private when their stock collapses, freeing the board of fiduciary duty to the stakeholders with a payout. This move is critical because it blocks other hyperscalers from putting in an offer to acquire their assets to shore up debt.

OpenAI will acquire the now private Oracle through a special funding round and buy up their hardware for pennies on the dollar. This will absolve them of the debt obligations Oracle has to OpenAI that have killed their credit ($500b), and stabilizes the Oracle balance sheet.

OpenAI will write this down and offer Oracle’s creditors equity stakes in lieu of cash, and will have acquired all their next gen hardware far cheaper than their competitors.

This might even fuck over Nvidia, the incestuous funders of the AI circlejerk. If Oracle gets to write off their GPU debts then Nvidia loses a fuck ton of sales, tanking their stock price — they take that OpenAI equity offer and look like they’re playing the game. OpenAI wants to build their own chips anyways, just look at jalapeño.

I don’t think it says anything about specific data center risks: capitalizing loans is standard operating procedure for these banks. It gets the loans off their account books, so they don’t have to hold capital to balance the risk, but they still get to collect management fees on the loans, regardless of whether they default. The big stories back in the 00s were residential real estate loans, but they do the same thing for commercial and industrial property.

this finbabble makes my head spin bois how is all this even allowed

1. be rich
2. write the rules
3. own the lawyers.

4. Own the politicians
5. Get bailouts
6. Avoid any legal or financial consequences

I offer you an IOU. I’m on a good streak, and the IOU is that I’ll pay you back over time with interest.

You accept. You then find 9 other people offering IOUs of varying reliability.

You package up all the IOUs into an asset group. In theory we all pay you back regularly, but some of us will not. With 10 IOUs it’s unlikely we’ll all default, so the asset is safer and your risk models can assess this.

You still have the same amount of debt and risk on your hands.

You turn sell the rights to the payouts from the group, in exchange for cash now, because paying $X for payback of Y% interest over Z years with Q risk is an easy to reason about deal.

But your potential buyers squabble over Q, some don’t want to lose anything, some want to be risky.

So you split that risk level out into groups and say “if the overall goes down, this group pays first, then this group, then this group”, and you’ve created a securitized asset.

You’ve now sold off these assets to various groups, with defined risk levels, and you’ve made back money to offset what you paid out to the initial 10 IOUs.

Now imagine you took IOUs from crack addicts who are talking a lot about the power transformer behind the mall. They say they need money for tools and this will be the big one. You’re intrigued.

Odds are good this will pay off you think, those crackheads were excited and confident.

Later that day you hear sirens. Like, a lot of sirens. It’s coming from the mall area. Huh.

You still haven’t sold off all the slices of your asset, you were maybe hoping for more upside, and selling can take a while. But those sirens… they’re concerning.

Maybe it’d be a good idea to swap out your asset for another one, or offer those slices at a discount for some higher than expected risk. So you go out and start making phone calls hoping someone else isn’t worried about it. The only people who are less worried are a biker gang you normally wouldn’t do business with, but you figure for a discount they’re happy to deal with the crackheads.

(This was more about securities than recapitalizing, but kinda the idea)

My impression is that commercial loan securitization is a little different.

When you’re talking about residential mortgages, you’re talking about loans of a few hundred thousand, which is kind of too small for capital markets to bother. So the banks bundle them, like you say, and sell them in $1e8-1e10 offerings… Pension fund’s gotta park $100,000,000 somewhere, and that MBS is easier than actually managing 500 separate loans.

When you’re talking about commercial real estate - and especially things as big as data centers - it’s the opposite problem. They need such big loans that only a big bank or even consortium of big banks can get all the capital together, then the big bank turns the loan into a bond offering, so investors can buy them in slices as small as $1e4… That bond may only have one or two loans in it, so it can’t necessarily get broken into risk tranches like the MBS.

With 10 IOUs it’s unlikely [they’ll] all default, so the asset is safer and your risk models can assess this.

This is where my spider senses go off. Are we assuming that these IOUs defaulting are independent events? Even though they’re from 10 crack heads talking about stealing the same generator?

Yes, probability gets much messier with correlated events, and most models assume independence. You can vary intensity/hazard in counting processes, but really there’s not much you can do at a certain point.

Yeh and they all hang out with each other and bribe the same police senators and bulk buy their crack dreams from the same dealer 3 AI companies

Literally lol’d at the second half of this post. Good work!

Any sufficiently advanced financial instrument is indistinguishable from fraud

The golden rule: he who has the gold makes the rules.

Isn’t fact they are having a hard time offloading that debt an indication that other investors are shying away from it because they see the data centre risk?

Yes. The banks are there to just be an intermediary for this crap. The part where they unload at a loss was not part of their plan.

Oracle can no longer get Wisconsin to supply power to the data center so it’s a $15 billion dollar paper weight.

Fucking lol

It’s even better because they signed contracts that guarantee that capacity to OpenAI, guarantee payments to their creditors, and Oracle is on the hook for it all with no outs.

Which is why I think it’s all a play, oracle famously is very lawyer heavy, they wouldn’t sign such stupid deals for no reason.

they wouldn’t sign such stupid deals for no reason.

Greed. The reason was greed. They bought into the hype and thought they could print money.

And all the tech companies are doing it, Oracle was just the sick man of the bunch, and will be the first to fall, dragging the rest down with them.

All because they’re offloading trillions in debt to special purpose vehicles, the same thing that tanked Enron, the difference is that Enron, with $400 million in debt, was lying about it, and the current tech companies doing the exact same shit, are disclosing the debt legally, but still hiding it in the fine print of their disclosures.

The debt will still crash the economy, but at least it’s out in the open?

Getting AI FOMO and mortgaging your entire company’s future for it. smh

And tanking the entire economy is the process.

Also, Larry Ellison (who can fuck right off) has leaned on his Oracle stock to fiance the buyout of all the media companies he’s gobbling up to build yet another right wing propaganda ecosystem.

a bit of leverage against the fed never hurt anyone

Also Larry is not nearly as sharp or thorough as he used to be, and he’s turned into a bit of a crumugeonly headstrong dick in his old age. No 82 year old is as sharp as they ised to be, despite how people like to lie about it. No 70 year old feels 40 anymore either. He has made numerous mistakes inside Oracle, and now he has run the whole company straight off a cliff, as aging boomers will tend to do.

isn’t he also personally on-the-hook for debt used in recent ‘media ventures’, too?

At least Wisconsin learned something from the Foxconn scam.

The Foxconn deal was always a scam, I doubt they learned anything from it, other than to deny before the midterms and then cave to them after, which is I presume the plan.

Wisconsin is so heavily gerrymandered they have one of the worst state governments in the country, and they used to have one of the best.

Edit: Although maybe their supreme court ungerrymandered the state part, or was it the fed part? Either way, they are all crooks and will side with big money after the election you better believe they will try.

Wisconsin has a preternatural ability not to learn things tho. They’re up there with Kansas and Florida.

Can’t wait for the austerity measures Congress will say are necessary to bailout banks and “AI” “SI” companies. Because regardless of which party wins in November they will get bailed out and everyone else will get bent over.

You’ll get a one time $1,200 check and 5 years of your employer using it as an excuse to not give you a raise while they rake in record profits.

And unlike student loans, they can discharge in bankruptcy. Fucking disgusting.

student loans have the real excuse that the bank can’t take back the education and that young adults have horrible credit.

Sub prime mortgages on crack with this BS.

hopefully the fed doesn’t bail em out this time

Your comment is at 0% up votes. Did you not even vote it up yourself?

Some of our comments don’t deserve even one upvote.

Well, it’s also at 0 down votes. So, at least they didn’t down vote themselves?

Yep that’s the biggest sign that the bubble is popping I’ve seen after the OpenAI revenue news, and the CoreWeave bonds.

Don’t worry, if we are in the bubble popping, we will have plenty of dominos falling and each one will have a chorus of techbro cheerleaders proclaiming that umm… actually it’s not a bad thing for whatever contrived reasons.

If you have money sitting in a bank account waiting for cheap stocks, every bankruptcy is a winning lottery ticket

Yea I’ve already gotten responses like that, “this was planned” and other bullshit.

So I was looking at some tech stocks that were showing varying amounts of decline for the week, and saw one that was 20% down. So I clicked the ‘why is it down 20%’ button and the AI response included “but as an AI centric company, it should recover and resume new highs”

The dumping scene from The Big Short comes to mind.

That is on top of the $18 billion in bonds it sold in a single day last September

That’s $6.57 trillion in annualized debt using AI bubble math.

The year my paycheck lands on Jan 1, my personal financial projections are gonna look SO AMAZING

Clearly you aren’t a megacorp. Just set your fiscal year to begin on the day of your paycheck. Checkmate, YNAB.

I dont know that we can collectively understand a number that big and what it means to us. People barely comprehend what a billion is.

$40B for banks are pennies. This website writes about $1.5T debt plan trough 2028 axis-intelligence.com/ai-data-center-financing-st…

That’s still not much compared to gross profit for 2025 of the 5 biggest players listed on US stock exchange Google $240B
Amazon $360B
Microsoft $225B
Meta $164B
Nvidia $153B

Sums up to $1.1T

Oracle will get bailout or those investments will be acquired 100% if you think billionaires won’t protect themselves from basically owning this planet you’re stupid.

All of the “here comes the bubble pop!” people are hoping for the worst, but how many of them graduated college in 2009? How many of them worked at a laundromat with a college degree? How many of them made $10 an hour part-time in a market where houses cost $250,000?

Recessions are bad. It’s bad now. Another recession is SCARY.

Last time when lots of people got very poor in europe and whole countries couldn’t pay their debt, world war happened. It was around 100 years ago and all I hope this fucking don’t happen again but well this world is fucked again because of those technology hitlers who don’t share money with people but only accumulate wealth.

Wait, so NVIDIA is not top #1 by profit yet? And where’s apple?

Apple gross profit $195B. Cloud is real cash cow because of enterprise. Cloud companies hope to double their earnings by with ai offering. That’s the business. So all those servers are being build for enterprise offering of not existent products that no consumer want but corporate will force them because they want total power over people and corporatocracy.

I work in commercial real estate. This is a normal common practice in commercial real estate. They honestly do this for pretty much every type of real estate and for as many as they can.

They securitize it in portfolios and sell off interest in those payments to others. They intentionally mix and match properties in portfolios so if one fails, there is less risk to the whole thing.

I’ve seen fast food restaurants, malls, airports, billboards, cell towers, hollywood studios, aerospace firms, law firms, hotels, apartments, everything. And yes, also data centers

That sounds like 2008 crisis waiting to happen again and again and again

which were all caused a republican, starting the cycle, of re-electing the same gop and Dinos.

Well, Oracle will implode and Ellison will be broke. He and his idiot son will probably have to sell off all their media holdings. So, a small silver lining. You cant eat it, but …

probably, I kinda hope Oracle doesn’t fall too much because I like using their free tier as an overcomplicated vpn because my isp has some fucked up network config (maybe CGNAT?)

Actually, I tell people to watch the Big Short because they explain the securitization process really well.

But hopefully rating agencies aren’t lying about the quality of loans and intentionally underwriting bad debt like they did in 2008 but I don’t originate the loans so idk.

They intentionally mix and match properties in portfolios so if one fails, there is less risk to the whole thing.

If AI fails, that is 25% of the US GDP, isn’t it? How can you distribute risk for that?

I can’t advise on other assets. I can only speak to commercial real estate securitizations, which is what the article is referring to.

In commercial real estate, they mix lots of different types of properties up into portfolios and they try to balance it out so if an office building fails, it won’t bankrupt investors.

These types of portfolios are safe because they invoke less risk overall. It’s the same reason why your 401k portfolio has a bunch of different companies and not just Apple or Tesla stock.

It won’t gain value as fast as a single stock, but it is less likely to lose value overall and is a safer risk.

Oh great that makes me feel much better now they’re going to take down the entire economy. Although to be honest the US economy was doomed anyway.

Idk if that will happen or not, all I can say is the portfolios are evenly balanced so that if one property fails, it doesn’t tank the whole investment.

It’s happening!!! Bubble pop is happening!!! article is underplaying it.

Coreweave debt pushed towards 16% yield today. The worst of the AI clusterfuck. Oracle, 2nd worse, move to 8% which is still absurdly low, but was holding 6% a week ago.

Main headline, yes the big banks are selling off debt to losertards. At a discount. Insurance companies are the losertards chasing yield, but have big losses today.

Nvidia, the circular financing backstop for the bubble, signaled today that it is just waiting for bankruptcies to swoop in instead of propping up the fraud. Bond/share holders will get crushed, and bubble dead, but still Nvidia will drive rampocalypse if the datacenters are still alllowed.

yep, adding in open AI’s oopsie accounting - theguardian.com/…/openai-forecast-revenue-gap

burst, baby, burst!

If they bubble can take down oracle on the way out I suppose it will have been worth the cost of entry.

Wait until they bundle the debt.

This is what they usually do. I don’t think there’s much to see here.

I don’t think the article is saying the business tactic is novel. It’s pointing out that they are having trouble executing it. Being stuck for 6 months trying to distribute $38B worth of debt is not a good indicator, especially as the AI world is still full steam ahead on generating more of this type of debt.

Oh NO! We NEED to Raise Taxes to PAY for these things OTHERWISE who’s going to Take Our Jobs while Poisoning Our Water while Killing Our Children while making Subpar Fruit Videos?

-US Politicians!

Dont worry, they will wait for the current tranche of laws to pass cementing that we can never create taxes specifically on the wealthy in the future. Like Californias prop 42

calmatters.org/…/newsom-tax-propositions-november…

Wasington’s IP26-645. Iowa’s comnstitutional ammendment. North Carolinas “constitional taxpayer protections”. Missouri’s ammendment 5.

Protecting the wealthys money is all the rage lately, a brand new booming legislative goldrush.

Then they will let the AI bubble implode-- not before. We have a few months still. Live it up. Play the market like its still the gilded age.

laws tend to stop mattering when the vast majority of people stop believing in a legal system and start rioting and dragging the rich from their homes and bunkers though

The US has been hosting riots for decades. It hasn’t changed anything. It has, if anything, cemented fascist rule.

We NEED to Raise Taxes

Nonsense. We’ll just cut spending, instead. Donnie Deals will try and plunder SS/Medi, after he scours away anything that’s left of public education and transportation.

It’s about time for the ultra-wealthy to create another 2007 so they can wrench the last bits of wealth off anyone who isn’t already a $100Ms-billionaire.

That has been the plan since the oligarchs took off their masks.

they shouldve known like 1-2 years ago.

They made money during those 1-2 years.

Well now, that looks familiar. Rats leaving a sinking ship.

The thing is the boat was very clearly going down when they got on.

Everyone knew it was a pyramid scheme from the start they just thought there were at the top of the pyramid and now they’re worried because it looks like they’re a little further down than that so they’re trying to minimize their losses.

the boat has cheese, and as long as you get off before it sinks too much you come out ahead.

Like when they underwrote the twitter purchase debt…

If theres one thing the US stock market has, its plenty of clueless bagholders with more money than common sense.

I’d love it if it was packaged up into securities and credit rating agencies gave those securities an A+++ would buy again rating so my wallstreet-managed 401k knows where to steal my money.

I HATE this part. I have no power to just not invest, because Vanguard or whoever owns the portfolio and they think this stuff is just going up-up-up, but they are playing with my money since I only have 4 flavors of their choosing for my 401k.

They might be right in the short term, and this used to be a thing (I think, in my parent’s age) where you could assume that number-goes-up over time and you could ignore minor dips, and maybe it’s still true for a long enough duration… but:

In this thread, I think we all see that this isn’t sustainable, but we, normal people just hoping to retire someday, don’t have the ability to disconnect from the bubble even if we want to. There are too many public companies involved and they’re all interconnected.

I despise that I’m probably invested in spacex, nvidia, oracle, etc. I’d sacrifice short term gains to let other people take this risk if I could.

Stop contributing. Once the spigot turns off the casino collapses.

If things are going to collapse in a year, is the employer match even worth it?

Is the bailout going to be because of national security or is it going to be a to big to fail situation.

ALTboth

If they get a bailout, are we ready to drag recipient ghouls through the streets?

Free enterprise, privatize profits, socialize the losses

Ooo I know this one! I won’t give out any spoilers.

Apparently they’ve spent 10 trillion in commitments that soan to 2032… And have to get AI earning to 3 trillion a year to avoid a crash.

…and there’s 8 billion people on earth. So I assume they’re hoping for some lucrative corporate/government contracts and bailouts.

So how would a (by now inevitable) government bailout not trigger an untenable treasury yield?

Print more money lol, although that’s sometimes referred to as a “soft default”

Quantitative easing.

The same shit that put us right here after the GFC

Banks are in the business of underwriting debt and reselling it to private investors.

We’ve been reading this “End is Near” shit since COVID. Put something more on the table.

Owning a debt from the AI industry is a fairly insane amount of risk

Is it? They’ve been outperforming every other debt class for five years running.

Do you think they can maintain that for another 5 years? Another 20? Is the product AI companies providing worth the valuations?

Are 5 AI companies providing more value than every other tech company in the last 50 years? Thats what the valuations are trying to say. Im still waiting on ChatGPT to cure cancer.

Do you think they can maintain that for another 5 years? Another 20?

I think expecting NVIDIA to fail inside the next five years is a wild reach. You might expect Oracle to take haircut in the next five years, based on their atrocious debt load. But even then, the idea that they’ll miss a credit payment?

Twenty years out, these firms are an even safer bet. Long term demand for compute and hosting services is only going up. And they’re so heavily consolidated. Too Big To Fail in every sense of the word. Are you going to bet against JP Morgan and Goldman Sachs on the eve of the financial crisis, even? Twenty years later, how are they doing?

Are 5 AI companies providing more value than every other tech company in the last 50 years?

It’s not a question of value, it’s a question of earnings growth. Will these top 5 AI companies be seeing stratospheric earnings growth in the next ten years? All signs point to “Yes”. The race to cement these data center footprints is a scramble for limited resources. The Capex budgets won’t be inflated to this degree forever.

Dismissing them for their rapid expansion would be like betting against New York and Chicago real estate markets because you didn’t trust skyscrapers to be profitable in another 20 years. Or betting against U.S. Steel and Standard Oil at the apex of WW2, because the resource demand from the conflict can’t go on forever.

I’m not saying they will fail I’m saying they will not maintain their rate of growth. Very, very different things but i guess you can pretend i said something else and argue against that or whatever idk dude lol

I’m not saying they will fail I’m saying they will not maintain their rate of growth.

They’ll hit a saturation point eventually, sure. But demand for capacity continues to outstrip supply.

I don’t see it happening; Copilot was a failed proof of concept that crippled the Windows ecosystem and permanently tarnished Microslop’s reputation as the premier operating-system developer; the Linux community doesn’t openly embrace AI much at all, and gamers couldn’t care less about it… All the LLM services have been running at a consistent loss/debt, and CoreWeave is propped up by the only 2 companies that couldn’t even successfully launch a finished product. They need to cut their losses and pack it in; call it a day!

So did .com in the early 00’s and houses in the late 00’s

If you bought into Microsoft in '01 and have owned a REIT since '07, you’ve made oodles of money.

What about pets.com?

In the end, Chewy.com was the better investment.

I’d argue that Microsoft really didn’t do anything .com-ish. Amazon would have been a better choice for your argument.

And noone’s arguing that no companies flourished during those years. Just that a fuckton of them drug the market back to hell with their overpriced evaluations. (people laying fiber and buying 1.2M sock puppet ads in the super bowl)

I’d argue that Microsoft really didn’t do anything .com-ish.

They’ve been the pack leader in the tech sector for decades.

And noone’s arguing that no companies flourished during those years.

The MAG7 have been outperforming the rest of the market since COVID, often by 5+%

This is very different than betting on some small cap IPOs

They’ve been the pack leader in the tech sector for decades.

So what did they do that was crazy long bad bet .com? Them existing in the .com days leaves nothing to the discussion at hand.

Amazon was at least standing up storefronts and cloud at that point.

The MAG7 have been outperforming the rest of the market since COVID, often by 5+%

What does this have to do with Tech bubble vs AI bubble? Are you interested in being on topic or just arguing?

So what did they do that was crazy long bad bet .com?

Windows ME leaps to mind. Internet Explorer giving up enormous market share to Chrome and Netscape. Fumbling Search for twenty years. Take your pick

What does this have to do with Tech bubble vs AI bubble?

The Tech Bubble was largely small cap startups. AI is prevailing B2B and SaaS.

Also “bubble” only means something in hindsight. You keep saying AI is going to crash. Where’s the crash? I’ve been reading this prediction for half a decade

bye!

Do you have any statistics?

Sounds like movable mortgage debt from 2008

that’s kinda illegal, isn’t it?

The part nobody prices in is the stranded-asset scenario. These underwritings assume a demand curve that keeps rising for a decade. If inference efficiency improves the way training efficiency did — and there’s real pressure in that direction now — a lot of this capacity gets repriced hard.

The bank behavior is the tell: debt that gets packaged and sold on right after underwriting is the classic ‘we have concerns but we’re not holding the bag’ move.

I would say there are definite advances for inference. Custom backends built by AI for specific models, such as Strata, makes efficient leveraging of hardware much easier. Engrams, such as those in Qwen Next-Flash, allows for using more parameters via SSD, rather than memory alone.

These and other things over the past few years have allowed me to use bigger models, faster. Given another year of such progress, I think the value of subscribing to big American companies would start drying up.

My youtube algorthim is filled with AI-skeptics (Eli the Computer guy, Ed Zitron, Prof G Markets) so this has been the slowest car crash I’ve ever gotten to watch happen. If Donald had actually focused on inflation all of these debt-sensitive AI plays could’ve continued to whistle through the graveyard. The skeptics have called out coreweave as being potentially the first domino to topple and their 6 year debt is trading at 15% right now. Thanks to plummeting token costs, they need to double their token sales every 90 days.

Stop using YouTube. The algorithm is not good for your mental health, nor to learn anything of substance.

The algorithm is dog ass. YouTube is still full of plenty smart people with something to say, though. It’s a video sharing platform; that doesn’t inherently mean every content creator who uses it is also dog ass.

I have to second that, yeah, YouTube’s Algo is insidious and drives my binge-watching, but I’ve been able to curate a subscription list of solid content creators.

Each one of the content creators ais subject to the same forces that the algorithm creates. No matter where you start, the content plus the algorithm slowly pushes you as well as the content creators into one direction. It may be a weak force, but it’s always there. content creators who want to grow their views do not have the liberty to evade it.

The direction is always towards divisive positions and decreasingly evidence based arguments, generally anti institutional, anti science, anti journalistic media.

YouTube as a feed is poison for a healthy mindset.

It’s true, disable YouTube feed and only look at subscription.

You can do it at myactivity.google.com/myactivity

I don’t use the algorithm

I would love it if people just did the bare basics and posted to multiple sites but they refuse to.

I mean, maybe they do with shorts + Tiktok or some of that shit

I watch more perfect union and the good liars. They’re not good at pointing out major issues? They bring receipts.

Ignore pretty much anything farming related from More Perfect Union - they tend to provide farm lobby propaganda without actually fact checking it. I’ve become much more sceptical of their other coverage based on how bad that segment of it seems to be.

Is this similar to the Dot.Com bubble burst?

I think we’re getting close to a pop.

People always say that, never happens

Steve Eisman has entered the chat

??

I’ve been hearing that since LLMs started gaining popularity. Doesn’t seem any closer today than, say, 2 years ago. But someone always makes this comment.

I’ve also been expecting a general stock market crash for a decade+. Somehow still hasn’t happened.

Doesn’t seem any closer today than, say, 2 years ago.

Have you seen what small, open-weight models from Chinese labs are capable of doing on consumer-grade hardware? They’re much more advanced than any flagship LLM running on VERY expensive hardware, 2 years ago.

I have no idea how close we might (or might not) be to the bubble bursting, but surely it’s closer than 2 years ago.

It’s fairly clear that the big ai companies are trying to get some form of general artificial intelligence because that’s basically a pot of infinite money, if they find it the rest of the economy is fucked and they skyrocket in value if they don’t find it the rest of the economy is fucked from debit and they go belly up.

Also like the 2008 housing crash.

Pin incoming…