At least if the datacenters usage crashes, we'll have cheap power from all the infra that got built.
No, we won't - there's significant capex on all that infra that will have to be paid down, and we won't have datacenters to help pay for it.
Financing the AI boom: from cash flows to debt [pdf]
21–30 of 113 posts
Re: Financing the AI boom: from cash flows to debt [pdf]
#22High growth scenario and medium growth scenario (Graph 2). I feel like an idiot asking - aren't we missing some, or at least one, scenario? Is "medium growth" for the next 4 years really the worst people can think of?
if growth doesn't materialize, then the infrastructure build out plays out exactly like the dot com bubble. the biggest difference this time around is the earnings. if those fall, the rest crubmles.
How are the earnings different this time? Can you add any color to that?
Re: Financing the AI boom: from cash flows to debt [pdf]
#23Usefulness aside, I see little evidence AI is making money (profit, not revenue) for any firm whose profit doesn't come from the AI itself or the infrastructure, including supply chain. I'd love to hear a counterexample. One such example would be of a hypothetical company that does translations for payment, and with AI they now are making more profit because they use AI to do the translation rather than pay a transla…
Translator services usually get paid because they offer an accreditation or certification that the humans doing the translation are trained and are not randos / computers. I could imagine these services becoming marginally more efficient but no dramatically improving profits.
Re: Financing the AI boom: from cash flows to debt [pdf]
#24[flagged]
We don't have to spend it on hardware with such short use-life to spend down those dragon hoards...
The amount of money we are talking about could have given the entire US high speed commuter rail.
Re: Financing the AI boom: from cash flows to debt [pdf]
#25BIS released a larger report in June that identified AI financing/sustainability as one of the biggest risks for the global economy: https://www.bis.org/publ/arpdf/ar2026e.htm
pre-echos of "too big to fail"
I’m not sure I understand these references. The banks were too big to fail specifically because they were banks involved with the finances of every major industry and government, not simply because their (arguably specious) valuations, or even market caps, had a ton of zeroes on them. What’s the argument for OpenAI being so inherently critical and interweaved with the rest of the economy that it can’t be allowed to fail? What’s the argument for how such a bailout would result in greater economic outcomes? The banks that got bailed out continued lending and immediately resumed profitable business, how will the AI companies offer value towards such a proposition?
Re: Financing the AI boom: from cash flows to debt [pdf]
#26At least if the datacenters usage crashes, we'll have cheap power from all the infra that got built.
No, we won't - there's significant capex on all that infra that will have to be paid down, and we won't have datacenters to help pay for it.
Call me overly cynical, but I’m willing to bet we’re already footing the bill in more than a few ways.
Re: Financing the AI boom: from cash flows to debt [pdf]
#27Earlier quoted context omitted.
pre-echos of "too big to fail"
I’m not sure I understand these references. The banks were too big to fail specifically because they were banks involved with the finances of every major industry and government, not simply because their (arguably specious) valuations, or even market caps, had a ton of zeroes on them. What’s the argument for OpenAI being so inherently critical and interweaved with the rest of the economy that it can’t be allowed to f…
“National security! We can’t let China win the AI race!” Or some BS
Re: Financing the AI boom: from cash flows to debt [pdf]
#28At least if the datacenters usage crashes, we'll have cheap power from all the infra that got built.
No, we won't - there's significant capex on all that infra that will have to be paid down, and we won't have datacenters to help pay for it.
+GPUs have significantly shorter useful life spans than say, all the dark fiber laid in the 90s
Re: Financing the AI boom: from cash flows to debt [pdf]
#29Earlier quoted context omitted.
pre-echos of "too big to fail"
I’m not sure I understand these references. The banks were too big to fail specifically because they were banks involved with the finances of every major industry and government, not simply because their (arguably specious) valuations, or even market caps, had a ton of zeroes on them. What’s the argument for OpenAI being so inherently critical and interweaved with the rest of the economy that it can’t be allowed to f…
Who do you think the private credit lenders are exactly?
Re: Financing the AI boom: from cash flows to debt [pdf]
#30Earlier quoted context omitted.
> Is "medium growth" for the next 4 years really the worst people can think of? At this point anything less than "medium growth" will crash the economy. We'll have bigger problems if that happens (think 2000 or 2008)
Right... So since it's a big problem, shouldn't we at least be considering it as a possibility so that we can minimize the impact?
No no no… that’s unecessary. Because it won’t happen.