Five US tech giants' hidden debts soar to $1.65T on opaque AI funding
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Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding
#2Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding
#3Well technically they don’t own the debt, the SPVs that own the data centers do. The giants just have long term commitments, but if shit hits the fan, it’s not the tech giants but the banks that lent the money to the SPVs that are at risk. This usually means all of us are on the hook.
Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding
#4Well technically they don’t own the debt, the SPVs that own the data centers do. The giants just have long term commitments, but if shit hits the fan, it’s not the tech giants but the banks that lent the money to the SPVs that are at risk. This usually means all of us are on the hook.
As someone who belongs to “all of us”, i vote to not bail us out if shit hits the fan. No need to ask me when it happens, OK? No really, it’s nice of you but we really dont need to be bailed out. You are welcome :)
Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding
#5Well technically they don’t own the debt, the SPVs that own the data centers do. The giants just have long term commitments, but if shit hits the fan, it’s not the tech giants but the banks that lent the money to the SPVs that are at risk. This usually means all of us are on the hook.
"U.S. energy company Enron, though fundamentally different from tech giants, collapsed in 2001 due to off-balance-sheet debt hidden behind multiple shell companies. Even with proper accounting practices, an increase in joint ventures with low transparency could raise concerns in the market."
Remember the vendor financing model which got a lot of technology companies into trouble at the same time? It took some years, almost all those companies disappeared. Motorola, Nortel, Lucent ...
Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding
#6On the one hand, these debts may be off the balance sheet, but institutional investors certainly know about them and can reason about the company's valuation. Retail investors may be caught out slightly more.
But on the other hand, these companies are essentially paying for the service of taking the debt off books (by paying the leasing premium to the SPV partners). I guess I'm wondering what they really gain from doing so, if again sophisticated investors can see through the games?
Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding
#7Well technically they don’t own the debt, the SPVs that own the data centers do. The giants just have long term commitments, but if shit hits the fan, it’s not the tech giants but the banks that lent the money to the SPVs that are at risk. This usually means all of us are on the hook.
As someone who belongs to “all of us”, i vote to not bail us out if shit hits the fan. No need to ask me when it happens, OK? No really, it’s nice of you but we really dont need to be bailed out. You are welcome :)
Replace you with AI, and when the AI math falls apart, use your tax money to bail out AI
And they’ll get away with it too
Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding
#8Well technically they don’t own the debt, the SPVs that own the data centers do. The giants just have long term commitments, but if shit hits the fan, it’s not the tech giants but the banks that lent the money to the SPVs that are at risk. This usually means all of us are on the hook.
If I owe the bank $750,000 and can't pay, it's my problem.
If I owe the bank $1,750,000,000 and can't pay, it's the bank's problem.
Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding
#9Well technically they don’t own the debt, the SPVs that own the data centers do. The giants just have long term commitments, but if shit hits the fan, it’s not the tech giants but the banks that lent the money to the SPVs that are at risk. This usually means all of us are on the hook.
If I owe the bank $750,000 and can't pay, it's my problem. If I owe the bank $1,750,000,000 and can't pay, it's the bank's problem.
If the bank is owed $1,650,000,000,000 and isn't paid, then it becomes the tax payers problem apparently
Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding
#10To quote the Big short: "I have five houses and a condo."