Is it time to short AI companies?
There's only one mostly AI company you can short right now and everyone's already doing it.
SpaceX is already 3x as expensive to short as the next biggest megacap. Good luck everybody.
AI Companies Are Trying to Hide a Staggering Amount of Debt
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Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#42Would have been nice if the article had any substantive facts in it
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#43And? Its not my debt. If they continue investing in compute, memory, memory bandwidth, network infrastructure, etc. it makes a relevant contribution of progress in all of these fields which I will leverage. A small form factor PC with 100gb fast memory and being able to run something like sonnet or opus level LLM would be massive. I have so many things i want to do and still sitting it out due to cost.
> And? Its not my debt.
Your view seems very myopic.
AFAIK they have heavily relaxed the rules for IPO. Pension funds are practically forced to buy from the top-100 companies, and these companies risk crashing much more than the others.
SpaceX value is already lower than at launch. If this costs are externalized to the common public, this will be your debt.
All these companies are too big to fail, in an environment where you can buy pardons and laws.
Hell, a 3T$ crash will have global repercussion and probably partially crash many other countries, too.
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#44And? Its not my debt. If they continue investing in compute, memory, memory bandwidth, network infrastructure, etc. it makes a relevant contribution of progress in all of these fields which I will leverage. A small form factor PC with 100gb fast memory and being able to run something like sonnet or opus level LLM would be massive. I have so many things i want to do and still sitting it out due to cost.
Is this in practice what's going to happen, or are (1) the prices going to hike (and never go down) for the consumer and (2) the memory companies will just continue doing what they already do because they're still selling their old shovels to the gold diggers? I don't see how this will benefit the consumer, but I might be missing some second order effect?
I read somewhere that the memory companies were massivly pushed for lowest prices especially by companies like apple.
I want to hope that this money will lead to more capacity, more R&D and lower prices in the long term again.
Nvidia would have changed its GPU strategy a long time ago if the demand wouldn't be real. They still can afford the GPU prices. But memory is not a monopoly.
For memory though i do assume a lot more people and companies want a massive amount more memory than ever before. I have 64gb in my pc for a few years now, i was quite happy with that. It became a no brainer. But today? Hey give me 100, 300 and even more. I really want to run bigger LLM models locally.
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#45Are they really "trying to hide" this debt? I think it's pretty common knowledge that a lot of these companies are using debt/bonds for funding. The debt not showing up where the author wants is a reporting formality not an attempt to hide it.
I think the point is that it’s not showing up on the standard financial filings. If you were to pull the annual reports for these companies, you wouldn’t see it. That doesn’t mean it’s impossible to find it. Obviously, it is otherwise the article wouldn’t have been written. But you’re going to have to go the extra mile. To be clear, none of this is illegal. It’s just covered in the advanced CFO accounting class.
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#46And? Its not my debt. If they continue investing in compute, memory, memory bandwidth, network infrastructure, etc. it makes a relevant contribution of progress in all of these fields which I will leverage. A small form factor PC with 100gb fast memory and being able to run something like sonnet or opus level LLM would be massive. I have so many things i want to do and still sitting it out due to cost.
Lots of people didn't invest in mortgage backed securities but still got screwed in 2008. When something is systemic, you don't have to be directly exposed to be effected when it goes sideways.
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#47Really feels like the govt + industry, through protectionism and fear-mongering, are propping up a "Too big to fail" situation.
Long term, I think the best thing the economy could do is to make training on model outputs fair-use, as suggested by Ben Thompson[1]. Short of that, the companies should enter into distillation agreements with other US labs to let them make near-Fable models.
As it stands now, the companies want to hold all the upside. While also being culturally so safety focused - "only we have the right to regulate this" that its IMO counterproductive to US leadership in AI.
A different universe where X.ai, Meta, and everyone were also building Fable competitive open weights models - because they can distill - would probably be better for the US long term. But there's too much capital on the line right now behind OpenAI / Anthropic for them to do this.
They're really in a bind IMO.
1 - http://stratechery.com/2026/whos-afraid-of-chinese-models/
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#48Are they really "trying to hide" this debt? I think it's pretty common knowledge that a lot of these companies are using debt/bonds for funding. The debt not showing up where the author wants is a reporting formality not an attempt to hide it.
> The debt not showing up where the author wants is a reporting formality not an attempt to hide it.
Couldn't you characterize Enron that way? The liabilities are there, you "just" have to look at Raptor II or whatever!
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#49And? Its not my debt. If they continue investing in compute, memory, memory bandwidth, network infrastructure, etc. it makes a relevant contribution of progress in all of these fields which I will leverage. A small form factor PC with 100gb fast memory and being able to run something like sonnet or opus level LLM would be massive. I have so many things i want to do and still sitting it out due to cost.
Exactly, this is how capitalism works. Let them shoot for the moon and let them fail. Worst case their over-valued assets are liquidated and continued on with at a more reasonable valuation. Just make sure they play by the rules and don't make new rules in the name of national security, ie boxing out open source.
Do you think the businessmen who sat on the dais at Trump's inauguration plan to just fail without getting him to put his small thumbs on the scales?
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#50Are they really "trying to hide" this debt? I think it's pretty common knowledge that a lot of these companies are using debt/bonds for funding. The debt not showing up where the author wants is a reporting formality not an attempt to hide it.
If it didn't matter, why would they bother jumping through hoops to keep the debt off their balance sheet?
In the run-up to 2008 a big factor in the bubble forming was that poor quality loans were packaged in a way to hide the risk in those investments. I'm not expert enough in finance to know if it's the case now, but we do know that clever accounting to hide debt can lead to the incorrect valuation of assets, potentially leading to financial ruin.