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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

#181

Post by red-iron-pine »

vouaobrasil wrote: post #92
boelboel wrote: post #75

Earlier quoted context omitted.

Which type of person is immune to it and where do they live?

I guess if you're older, retired, sufficiently wealthy and have few needs (house paid off, lots of savings, don't care too much about acquiring new tech) then you can easily not be affected.

"sufficiently wealthy" is quite a term -- doin a lot of heavy lifting there.

there are a lot of older folks leaning on 401ks and IRAs that are heavy in big indexes and I suspect many of them may end up eating cat food to get by if/when the bottom drops out.

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

#182

Post by red-iron-pine »

techblueberry wrote: post #63
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.

Maybe inning 9 game 1 of the series.

that is perhaps a better analogy. end of chapter one of a long and complicated book.

what will come out of the crash will likely be terrible for the average person, regardless.

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

#183

Post by red-iron-pine »

KennyBlanken wrote: post #127
afry1 wrote: post #73

Earlier quoted context omitted.

Fiber and railroads don't depreciate after 3 years of use like AI chips. Fiber and railroads don't need tens of billions of dollars in continuing yearly maintenance expenses to keep them from going stale.

> Fiber and railroads don't need tens of billions of dollars in continuing yearly maintenance expenses to keep them from going stale. Congrats, you're as qualified as all the private equity companies that have been piling into railroads! That's precisely the sort of attitude that got us East Palestine (and others.) BNSF (for example) spends billions of dollars a year on maintenance. When trains go over rails enough i…

AAR says that U.S. freight railroads collectively invest approximately $25 billion per year in capital expenditures and maintenance.

By comparison, OpenAI got another $110 Billion alone for their next round of funding. U.S. private AI investment climbed to $285.9 billion in 2025.

the difference here is that we know how the railroads work, and how to make a profit off them -- PE squeezes notwithstanding. the sports car I drive probably came here via train. meanwhile AI uses more electricity than Bolivia to make poorly formatted Powerpoint Presentations for useless meetings.

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

#185

Post by red-iron-pine »

analognoise wrote: post #110
WarmWash wrote: post #42

Raise your hand if you wouldn't pay $60/mo for SOTA LLM access/couldn't get $60 of value out of it monthly.

I'd buy and run an open Chinese model before I ever paid for monthly access to any of these AI assholes.

that means they're foreign AI assholes

they're still not your friends, and you need to buy the hardware from other assholes, who are also deep in this game, e.g. NVDA

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

#186

Post by jdub »

minimaltom wrote: post #177
jdub wrote: post #134

Earlier quoted context omitted.

Are you sure? What is the 401(k) exposure to "AI" related stocks and broader market shocks?

"401(k)" is a class of tax-advantaged account for retirement, theres no one global 401(k). If you are concerned, you can look at your disclosures or ask your provider. All of this is kind of beside the point though, because the issue was leverage not exposure. In south korea ppl were forced to sell at the low point of the market due to margin calls. For a retirement account, you can just choose to take a disbursement…

It's a question about systemic exposure, not my account (I'm Australian).

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

#187

Post by dom96 »

saulpw wrote: post #137
dom96 wrote: post #85

Earlier quoted context omitted.

> Models just got good at writing code this year That's not correct, is it? Opus 4.5 came out in Nov 2025. Some might say models were good at coding even before that.

That's "this year" [the past 12 months].

That's not what "this year" means lol

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

#188

Post by minimaltom »

jdub wrote: post #186
minimaltom wrote: post #177

Earlier quoted context omitted.

"401(k)" is a class of tax-advantaged account for retirement, theres no one global 401(k). If you are concerned, you can look at your disclosures or ask your provider. All of this is kind of beside the point though, because the issue was leverage not exposure. In south korea ppl were forced to sell at the low point of the market due to margin calls. For a retirement account, you can just choose to take a disbursement…

It's a question about systemic exposure, not my account (I'm Australian).

Me too / born in Sydney! A good mental model is that its like super, the kinds of things that super can invest in are equally diverse and it all depends on who you setup with

Systemically i guess thats more a question of 1) is US equities just an AI trade, and 2) how much of all these investment vehicles are just such assets. Regardless of the answers, the nice thing is that unlike debt, there isnt a positive feedback loop here (i.e. margin calls increase volatility)

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