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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

#131

Post by axegon_ »

archagon wrote: post #121
axegon_ wrote: post #97

Earlier quoted context omitted.

And every time some points all of this out, they are "denier", "left behind" and all the other everything-ai fanatics can come up with. As for the imminent crash - I'm all for it. There's a whole generation that is incapable of thinking for themselves without an LLM telling them what to do or worse still - do it for them. And for much of the tech world, that is becoming the single point of failure. As for China - I t…

Maybe the "left behind" rhetoric stems from the underlying anxiety of this whole thing imploding and taking the economy with it.

I wish that were the case. Unfortunately I know plenty of people who truly believe that anyone that isn't using AI and paying hundreds of bucks for slop subscriptions will be so irrelevant in 2 months and will be begging for food and scraps on the streets and sleeping under bridges: even more fanatical then what we witnessed with Jobs and Musk. Arguably not the sharpest tools in the shed but looking at the news from every corner of the world, the shed is filled to the brim with very blunt tools.

Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

#133

Post by mike_hearn »

lelanthran wrote: post #127
rmunn wrote: post #53

Earlier quoted context omitted.

That's the difference between innovating and copying/distilling someone else's innovation. https://wccftech.com/chinas-kimi-k3-identifies-itself-as-ant...

> That's the difference between innovating and copying/distilling someone else's innovation. Aren't the models from Anthropic and OpenAI simply the distilled work of everyone else who ever put their work online, or in books? Why is their distillation okay, but other distillations not ok?

Not at all. At this point, a large amount of the work is in reinforcement learning where they are effectively generating their own data.

Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

#134

Post by lemax »

darth_avocado wrote: post #3

Well 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.

These are relatively contained private credit markets though. We’re not looking at anything 2009 level. For scale, total US mortgage debt peaked at $9.3T ahead of the subprime mortgage crisis, 73% of GDP at the time. We’re talking here about ~5% of GDP.

Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

#138

Post by dofm »

4ggr0 wrote: post #136
gilfyole wrote: post #132

A bubble in progress waiting for right time (hello 2028) to burst.

why do you consider 2028 to be the right time for a pop?

I personally think it could pop before then if there is not concerted effort to stop inflating it and maybe start to let the air out.

But the main reason 2028 would be a risky year is the systemic risks around Trump. If he makes even more efforts to put his thumb on the electoral scales than he already has, or if it is not clear there will be a free and fair election (from an external perspective it really isn’t), then confidence drains out of the wider system very quickly, and one of the earliest things to go in such a situation is speculative investment.

Even if there is a free and non-controversial election, the market might well see risks for the AI companies: would the Democrats, if they make it into power, be so fully on board with letting these companies operate in a low-regulation environment?

And if the bubble should look like bursting for its own reasons in early 2028, will the by then quite stressed federal government, late in the term, actually have the real authority to do anything about it? It’s not a popular government, or a very organised one, and whatever they do will need confidence, co-ordination and an unprecedented level of buy-in

Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

#139

Post by rmunn »

lelanthran wrote: post #127
rmunn wrote: post #53

Earlier quoted context omitted.

That's the difference between innovating and copying/distilling someone else's innovation. https://wccftech.com/chinas-kimi-k3-identifies-itself-as-ant...

> That's the difference between innovating and copying/distilling someone else's innovation. Aren't the models from Anthropic and OpenAI simply the distilled work of everyone else who ever put their work online, or in books? Why is their distillation okay, but other distillations not ok?

The difference I was referring to was economic; I was not making an ethical judgment. So many people seem to be reading my comment as making an ethical judgment (based on their reactions); maybe I should edit it to clarify.

Nope, seems I'm past the edit window. Oh well.

Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

#140

Post by short_sells_poo »

londons_explore wrote: post #100
laughing_man wrote: post #51

Earlier quoted context omitted.

The problem is if large banks fail they take everyone else with them. We should have dealt with this in 2009, but for some reason it didn't happen. But money talks, I guess.

Iceland let it's banks default, and is now doing rather well. In fact, bank failure and then having the government only guarantee ~$50k of funds per person is a good way to hand wealth to the people and take it from corporations and the super wealthy.

The issue is that major US banks are systematically important to the US and also everyone else. Practically nobody cares about Icelandic banks - not even their depositors if their deposits were protected by the state (which they were).

If a bank like JP Morgan were to fail, the event would be without exaggeration cataclysmic to everyone, even small local banks and credit unions. Even if ultimately the clients of JPM could be made whole, the weeks of uncertainty and frozen funds would single handedly obliterate the financial systems across the globe. It's the age old adage: "if you get margin called and get wiped out, it doesn't matter that you'd have recovered just 2 weeks later". The world as a whole is deeply leveraged. It's that leverage that affords us the ability to supercharge all the growth, from AI to drugs research, insurance, EV... everything. But that leverage comes at a cost, which is that systemically important institutions failing can have disastrous cascading de-leveraging effects.

I'm sure we'd more or less all survive and the world would recover, but it would likely be a 2008 GFC style scenario most likely.

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