Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

AI Companies Are Trying to Hide a Staggering Amount of Debt

futurism.com

Post reply on HN
Print view View original

191–200 of 407 posts

Re: AI Companies Are Trying to Hide a Staggering Amount of Debt

#191

Post by MattGrommes »

duzer65657 wrote: post #179
rwmj wrote: post #171

Earlier quoted context omitted.

Which is why you keep 3-5 years of spending money in cash (or a bond ladder if you want to be fancy).

most don't even have 3-5 years "spending money" (whatever that is) in total savings; if you're keeping that in cash you're getting 2-3% annually while the market has doubled.

When you're headed into retirement, one possibility is to shift to saving more in cash-like options instead of a 401k (or whatever). It's should just be part of your retirement plan to account for possibilities like this.

Re: AI Companies Are Trying to Hide a Staggering Amount of Debt

#192

Post by [deleted] »

rwmj wrote: post #184
duzer65657 wrote: post #179

Earlier quoted context omitted.

most don't even have 3-5 years "spending money" (whatever that is) in total savings; if you're keeping that in cash you're getting 2-3% annually while the market has doubled.

Sure, but we're not talking about people who have no savings. FIRE people have huge investment portfolios while being frugal with their spending, and understand the risk of keeping 5-10% of their total net worth in cash equivalents (not dissimilar to having insurance).

[deleted]

Re: AI Companies Are Trying to Hide a Staggering Amount of Debt

#193

Post by d5lt5 »

senshan wrote: post #56

As 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 e…

> As long as this debt does not make it into life insurance and pension funds, we are fine.

Already happened: https://finance.yahoo.com/markets/stocks/articles/michael-bu...

Re: AI Companies Are Trying to Hide a Staggering Amount of Debt

#194

Post by LetsGetTechnicl »

sulam wrote: post #85
Havoc wrote: post #42

Would have been nice if the article had any substantive facts in it

The article is a very shallow restatement of the conclusions in this paywalled piece: https://asia.nikkei.com/business/technology/five-us-tech-gia...

Here's the un-paywalled version: https://archive.is/20260722205736/https://asia.nikkei.com/bu...

Re: AI Companies Are Trying to Hide a Staggering Amount of Debt

#197

Post by daishi55 »

Article appears to be conflating big tech companies that print money with AI startups like OpenAI and Anthropic.

After the opening paragraphs about the accounting practices of meta, Microsoft, alphabet, etc - which, it should be noted are not “houses of cards” and earn plenty of money - the article quietly transitions to

> Experts continue to warn of an AI bubble, noting the enormous and widening gulf between company valuations and their comparatively measly profits.

I think hoping people will apply the “house of cards” logic by that analyst they quoted to the startups, when instead the analyst was talking about the megacorps’ accounting.

Re: AI Companies Are Trying to Hide a Staggering Amount of Debt

#198

Post by bell-cot »

duzer65657 wrote: post #179
rwmj wrote: post #171

Earlier quoted context omitted.

Which is why you keep 3-5 years of spending money in cash (or a bond ladder if you want to be fancy).

most don't even have 3-5 years "spending money" (whatever that is) in total savings; if you're keeping that in cash you're getting 2-3% annually while the market has doubled.

Look back at the grandparent comment. If someone doesn't have 3-5 years in total savings, then they had better not try to retire.

Re: AI Companies Are Trying to Hide a Staggering Amount of Debt

#199

Post by Karrot_Kream »

Imustaskforhelp wrote: post #137
tyleo wrote: post #73

Earlier quoted context omitted.

It’s an interesting thought. The growth is so extreme that if the S&P 500 fell 50% today it would reach levels last seen in 2022. Given that the timespan is so short, I’m honestly not sure it would be as bad for 401ks as people expect unless all of your investment was concentrated in the last 4 years. I suppose it’s worse if your calculation is, “I’ll retire when my 401k hits $X absolute value,” but I think most peop…

During the dot-com crisis. Nasdaq fell around 78% from its peak and S&P by around 49% so it isn't unprecedented (ironically has both aspects of being both tech and are within the same time-era) It created an actual recession albeit thankfully short one for the case of dotcom (sadly not for 2007) and a really recessionary environment which causes unemployment and just straight up fear and panic. I do understand what y…

This kind of metric is always used to shock and awe in pop media when talking about the GFC, but it's not how actual investment works. In practice most investments are DCAed.

No person puts all of their retirement savings into QQQ or SPY at the peak and sell it off at the trough. Instead folks drip their savings into their weighted portfolio and withdraw money from their weighted portfolio as expenses accrue. Now obviously the GFC was a huge deal, but this sort of facile understanding of stock markets always leads to big misunderstandings. There's a reason Monte Carlo analyses of these events are used to model these scenarios.

(Though I imagine there were many people who tried to re-balance their portfolio into a less equity-heavy model abruptly during the GFC and based on equities performance at the time, it was probably the right move as long as taxes were taken into account.)

Re: AI Companies Are Trying to Hide a Staggering Amount of Debt

#200

Post by staticman2 »

rwmj wrote: post #171
MattGrommes wrote: post #166

Earlier quoted context omitted.

One of the big issues with this is sequence of returns risk. If you retire and rely on your portfolio but the market dives for a year or two right after you leave the workforce, your total portfolio value is screwed because you were selling at a low point.

Which is why you keep 3-5 years of spending money in cash (or a bond ladder if you want to be fancy).

3 to 5 years of cash or a bond ladder won't help in a 1970s stagflation scenario.
Post reply on HN