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AI's debt binge can't last, hidden borrowing reaches $1.65T

fortune.com

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Re: AI's debt binge can't last, hidden borrowing reaches $1.65T

#31

Post by gradus_ad »

mschuster91 wrote: post #20
bix6 wrote: post #12

Has anyone seen a definitive mathematical proof of this? I have seen countless articles and exposes about the hidden debt. These are incredibly sophisticated companies so presumably they wouldn’t let themselves get into a company ending bind. But what are the chances this is actually an MBS type situation where the system is truly overloaded and a few sacrificial lambs are needed?

> Has anyone seen a definitive mathematical proof of this? I have seen countless articles and exposes about the hidden debt. There's an old WSB saying: the market can remain irrational longer than you can remain solvent. The AI craze is that but on 'roids. > These are incredibly sophisticated companies so presumably they wouldn’t let themselves get into a company ending bind. The problem is, company C-levels don't ca…

That saying goes back long before WSB

Re: AI's debt binge can't last, hidden borrowing reaches $1.65T

#32

Post by WarmWash »

goatlover wrote: post #25
XenophileJKO wrote: post #17

Earlier quoted context omitted.

It is like being in a city where Edison wired up lights.. and people are like..well I guess electricity has played out! We have only begun to extract the value of commoditized intelligence. Sure there are arguments on local models and pricing power.. but I think we will be compute constrained for the near future.

That doesn't preclude something like a dot-com crash. It also doesn't mean everything in the current hype cycle will come true either. Plenty of people still shop at physical stores, read printed materials, and actually don't like being stuck at home if they can help it. Similarly, majority of people still don't 3D-print stuff they can get cheaply at Walmart or from Amazon. Or use VR/AR as their primary form of inter…

>Plenty of people still shop at physical stores, read printed materials, and actually don't like being stuck at home if they can help it.

I too would use "plenty" rather than look at the horribly depressing stats.

Re: AI's debt binge can't last, hidden borrowing reaches $1.65T

#33

Post by mannanj »

what happens when you mix world wars, potential food and water shortages, and a rising unrest with the local governments? (edit: and a massive inequality in resource distribution). (edit 2: and a drop in jobs).

Any historical precedent for this all occurring together with technological hype/fast growth?

Re: AI's debt binge can't last, hidden borrowing reaches $1.65T

#34

Post by coliveira »

mschuster91 wrote: post #20
bix6 wrote: post #12

Has anyone seen a definitive mathematical proof of this? I have seen countless articles and exposes about the hidden debt. These are incredibly sophisticated companies so presumably they wouldn’t let themselves get into a company ending bind. But what are the chances this is actually an MBS type situation where the system is truly overloaded and a few sacrificial lambs are needed?

> Has anyone seen a definitive mathematical proof of this? I have seen countless articles and exposes about the hidden debt. There's an old WSB saying: the market can remain irrational longer than you can remain solvent. The AI craze is that but on 'roids. > These are incredibly sophisticated companies so presumably they wouldn’t let themselves get into a company ending bind. The problem is, company C-levels don't ca…

> incredibly sophisticated companies

We need to stop thinking that just because they have money they're incredibly sophisticated. We have a few examples like Mark Zuckerberg, who had early success with FB, but he seems to be incapable of investing in profitable products. E. Musk: great at selling his companies, but laughably bad at making profits at the same level of expenses. Sam Altman: never had a real job he did well other than raising money. This is the kind of people that control these companies.

Re: AI's debt binge can't last, hidden borrowing reaches $1.65T

#35

Post by goatlover »

WarmWash wrote: post #32
goatlover wrote: post #25

Earlier quoted context omitted.

That doesn't preclude something like a dot-com crash. It also doesn't mean everything in the current hype cycle will come true either. Plenty of people still shop at physical stores, read printed materials, and actually don't like being stuck at home if they can help it. Similarly, majority of people still don't 3D-print stuff they can get cheaply at Walmart or from Amazon. Or use VR/AR as their primary form of inter…

>Plenty of people still shop at physical stores, read printed materials, and actually don't like being stuck at home if they can help it. I too would use "plenty" rather than look at the horribly depressing stats.

What are the horribly depressing stats that show otherwise? Maybe it's different where you live.

Re: AI's debt binge can't last, hidden borrowing reaches $1.65T

#36

Post by WarmWash »

bix6 wrote: post #12

Has anyone seen a definitive mathematical proof of this? I have seen countless articles and exposes about the hidden debt. These are incredibly sophisticated companies so presumably they wouldn’t let themselves get into a company ending bind. But what are the chances this is actually an MBS type situation where the system is truly overloaded and a few sacrificial lambs are needed?

A lot of people want to see AI fail/collapse.

A lot of publications pay attention to that.

A lot of people love reading things (often only reading things) that make then feel right/correct/justified.

A lot of publications live or die on ad views.

And just like that we have a viable media business model!

Re: AI's debt binge can't last, hidden borrowing reaches $1.65T

#37

Post by rybosworld »

kube-system wrote: post #30
rybosworld wrote: post #23

Earlier quoted context omitted.

Right - black swans are by definition things that the majority didn't see coming. Ever since the 2008 housing crisis, people have been predicting the next bubble-burst/black-swan event. The one that really crushed the markets was the one almost body saw coming: Covid-19.

Not every crash is due to a black-swan event. Many crashes are due to causes with predictable reasons, but unpredictable timing.

You have any examples? Because all of the biggest and most famous crashes were events that only a very small minority of people ever saw coming.

Tulips, 1929, Dotcom, Great Recession, 2010's Flash Crash - none of these were in the public discussion before they happened.

Re: AI's debt binge can't last, hidden borrowing reaches $1.65T

#38

Post by echelon »

scarlehoff wrote: post #22
XenophileJKO wrote: post #17

Earlier quoted context omitted.

It is like being in a city where Edison wired up lights.. and people are like..well I guess electricity has played out! We have only begun to extract the value of commoditized intelligence. Sure there are arguments on local models and pricing power.. but I think we will be compute constrained for the near future.

Internet didn't disappear after the dotcom crash, but a lot of money did. This is what could happen here I think.

The internet remains the biggest singular development of my entire life. The most valuable companies in the world are internet companies.

Journalists have been eager to call AI "over" since 2022, and yet:

- Models just got good at writing code this year

- Models just got good at editing images last year

- Models just got good at cinematic video this year

This hasn't even played out. It hasn't even started.

Why on earth would this be the end?

The robotics story is just getting started, too.

I literally do not write code anymore.

Re: AI's debt binge can't last, hidden borrowing reaches $1.65T

#39

Post by Razengan »

XenophileJKO wrote: post #17
missedthecue wrote: post #5

As a bystander directly immune to the fortunes of AI going up or down, it does feel like there are a lot more people thinking this is inning 9 of the LLM story than there are people thinking it's inning 3. Which makes it tempting to believe it's probably closer to inning 3.

It is like being in a city where Edison wired up lights.. and people are like..well I guess electricity has played out! We have only begun to extract the value of commoditized intelligence. Sure there are arguments on local models and pricing power.. but I think we will be compute constrained for the near future.

It's more likely that we're seeing the limitations of discrete/digital binary computing architectures, and this will speed up the birth of new or the resurgence of hitherto-"exotic" architectures, like ternary, analog, etcetera

One thing's for certain: There's no way anyone who's come close to Sauron's Ring (made actual use of AI) wants to part with it :')

Re: AI's debt binge can't last, hidden borrowing reaches $1.65T

#40

Post by cyanydeez »

scarlehoff wrote: post #22
XenophileJKO wrote: post #17

Earlier quoted context omitted.

It is like being in a city where Edison wired up lights.. and people are like..well I guess electricity has played out! We have only begun to extract the value of commoditized intelligence. Sure there are arguments on local models and pricing power.. but I think we will be compute constrained for the near future.

Internet didn't disappear after the dotcom crash, but a lot of money did. This is what could happen here I think.

unfortunately, the dotcom ate just money; the housing crash ate money and people. This will be some combination of the two; I wouldn't doubt a few pension funds in the deep red states get crushed if it takes money and property with it.
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