I guess "try to hide" means to be posted about all over the news weekly.
AI Companies Are Trying to Hide a Staggering Amount of Debt
51–60 of 407 posts
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#52And? 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.
The thing is they actually pushed the price tags of memory and disks high so we wouldn’t be able to afford it. Unless ofc you rent from them.
If hyperscalers flop, and there’s a good chance they will, memory and disk prices will crater. They are historically the most volatile asset in tech. If Samsung, Micron et al can’t sell to hyperscalers they will switch back to consumer, because they can’t just turn off a memory fab without losing billions.
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#53Do they? Is a company with $200 billion annual revenue and earnings (EBITDA) of $100 billion having $420 billion of off-balance-sheet debt really staggering?
In many other industries that would be a perfectly normal amount of debt to have. It's only unusual because we are used to tech companies having so much cash on hand they don't know where to put it
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#54[dead]
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#55And? 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.
Except this is not how American capitalism works at this scale, and it’s ridiculous to think their debt isn’t your debt when you have the entire country’s history to look back on and count the numerous government bailouts.
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#56As long as this debt does not make it into life insurance and pension funds, we are fine. The trouble is that private credit is taking control of some life insurance companies and off-loads this debt to these. When these fail, it will become everyone's problem.
> Risks to financial stability may also stem from entities with particularly high exposure to private credit markets, such as insurers influenced by private equity firms and certain groups of pension funds. The assets of private‐equity‐controlled insurers have grown significantly in recent years, with these entities owning significantly more exposure to less‐liquid investments than other insurers
https://www.imf.org/-/media/files/publications/gfsr/2024/apr...
https://www.imf.org/-/media/files/publications/gfsr/2024/apr...
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#57Earlier quoted context omitted.
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?
It has nothing to do with the administration. These companies did the same thing with the last, and they will do the same thing with the next.
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#58And? 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 w…
Thats a Elon Musk / Space-X issue thought not a Google and co issue.
How much real impact is this really though?
Re: AI Companies Are Trying to Hide a Staggering Amount of Debt
#59Are 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.
Take-or-pay contracts appear as "contractual commitments" in 10-K. They are not hidden. That's the way they are reported in all industries where take-or-pay contracts exist. There's nothing nefarious about it.