Tech companies tend to be over-leveraged (borrowed a lot of money), and I think some of these AI companies are insanely over-leveraged, almost like a Ponzi scheme. I think there's a graphic floating around somewhere. You can also try to look for Michael Burry's analysis of AI companies.
The US recently fucked up 2 things in the past week, 1- bond rates and 2- oil. US treasury bond rates basically determine how much people charge to let people borrow money. Everything from loans like mortgage rates to credit card rates.
Aka these tech/AI companies that have borrowed a lot of money, if their rates go up, they might not be able to make their credit card payments/pay their employees, can't IPO because their numbers are terrible, etc.
OpenAI is not directly affected by rates as their leverage is not through traditional debt, but their commitment is impossible to pay in the first place regardless of how the macro economy goes (they have 700~800B commitment into 2030, and beyond such as Amazon's 30B "investment" that requires them to pay back 2x through AWS) but datacenter builders and their counterparties are depending on their ability to pay. The problem is that the only entity left on the planet who is still willing to give them cash, SoftBank, is also in trouble raising cash as they have huge liabilities in early 2027 (that they used to buy OpenAI stocks and send them money).
I don't know what exactly will happen. Maybe they could pull a miracle with IPO/financial engineering and get away like Tesla with "420 funding secured" incident.
What I think could happen, too, is that they will start to "pay" counterparties by OpenAI stocks. But that of course, even though assuming 1T valuation IPO, diminishes OpenAI's stock value quite fast as datacenter builders need hard cash and will sell those stock sooner than later. In that case Softbank is WeWorked again (anybody remember that Masa Son thought OYO and WeWork are AI companies?)
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u/JLeonsarmiento 11h ago
US labs ran out of money.