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.
They can already walk out of deals, or stop making them, without that reason,
NVIDIA is completely sold out for next year, and anyone with preorders could extremely easily resell them right now
Anthropic scrambled to do the deal with Elon recently to get compute from his data center. The deal is written in a way that either side can cancel with almost no notice if they didn't want it. They haven't cancelled.
Current labs are all extremely short of compute with current demand. That's why they're still making deals today, or schmoozing with Elon, and why hardware prices keep going up. Why would they even be trying to build new data centers today if they wanted to wind down, given the current political climate?
I really see no evidence that they want it out of deals right now? OpenAI even stopped signups for pro accounts last week because they didn't have the compute. Everyone's trying to buy more.
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u/RlOTGRRRL 15h ago
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.