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Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

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Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

#231

Post by darth_avocado »

0xbadcafebee wrote: post #73
darth_avocado wrote: post #3

Well technically they don’t own the debt, the SPVs that own the data centers do. The giants just have long term commitments, but if shit hits the fan, it’s not the tech giants but the banks that lent the money to the SPVs that are at risk. This usually means all of us are on the hook.

> it’s not the tech giants but the banks that lent the money to the SPVs that are at risk Banks have not been loaning AI money for some time. They hit all their regulatory safeguard limits so they can't keep loaning. Half the money being invested in AI is private capital. There is still systemic risk, because private capital is a shadow banking system and you don't know who will be affected when they go kaput. Your u…

Private capital isn’t some dark box, at least half of it is pension funds, endowment funds, insurance companies and non profits. Then there are private credit arms of banks, sovereign wealth funds and family offices of wealthy individuals.

Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

#232

Post by mike_hearn »

justacrow wrote: post #191
mike_hearn wrote: post #133

Earlier quoted context omitted.

Not at all. At this point, a large amount of the work is in reinforcement learning where they are effectively generating their own data.

Ah, so it's okay to copy and distill all human-produced works evee, except for reinforcment-learning data generated by OpenAI/Anthropic etc

I didn't take any position on the morality of it, just pointing out that the data they're training on isn't all taken from the rest of the world.

Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

#233

Post by gtowey »

xtiansimon wrote: post #204
AznHisoka wrote: post #4

Earlier quoted context omitted.

As someone who belongs to “all of us”, i vote to not bail us out if shit hits the fan. No need to ask me when it happens, OK? No really, it’s nice of you but we really dont need to be bailed out. You are welcome :)

> “As someone who belongs to “all of us”, i vote to not bail us out if shit hits the fan.” You have alighted onto an interesting topic: “bail out”. I believe a closely related word on the semiotic chain is “retreat”. I don’t feel that our culture would wish to “retreat” from AI. I know quite a few managers and programmers who absolutely delight in the fruits of the industry. No doubt the titans of the AI industry, wh…

> You have alighted onto an interesting topic: “bail out”. I believe a closely related word on the semiotic chain is “retreat”.

Huh? That's a different meaning of "bail out". In this context its meaning is closer to "rescue" and not retreat.

Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

#234

Post by throwup238 »

harry8 wrote: post #52
throwup238 wrote: post #40

Earlier quoted context omitted.

> Technically, from an economic perspective, it's debt. Isn’t the important difference that it doesn’t trigger bankruptcy on default? Economically it might not be that different but it has some significance legally because the courts have some fast tracks that trigger bankruptcies (IANAL but that’s my layman’s understanding). If they “default” in this case it will lead to lawsuits that they will almost certainly lose…

if you can't meet your obligations as and when they fall due, you're insolvent. Contractual specification from there.

Paying someone a week late (or not at all) on net 30 terms does not trigger insolvency proceedings. The type of obligation matters.

Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

#235

Post by lelanthran »

Tadpole9181 wrote: post #228
lelanthran wrote: post #168

Earlier quoted context omitted.

> The difference I was referring to was economic; I was not making an ethical judgment What is the economic difference? LLMs have been trained on the results of billions of dollars worth of time, research, investment and expenditure. When you ask an LLM a question, they are giving you the results of those billions, or hundreds of billions, effort. Those things weren't free; they cost money to produce! If anything, th…

Can you please stop being coy and intentionally obtuse? Just have a discussion in good faith, I'm so beyond sick of this kind of rhetoric. Yes, AI training uses human data and a lot of it was not compensated. But that has absolutely nothing to do with the thing this thread is about. Distilling models costs less money than a really procuring quality data and training a model yourself. If you disagree, debate that .

> But that has absolutely nothing to do with the thing this thread is about.

That's how this thread started:

>>>> That's the difference between innovating and copying/distilling someone else's innovation.

How is distillation by one party okay but distillation by another not okay, even though in the second case the other party is paying the asking fees?

Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

#236

Post by lefty2 »

vasco wrote: post #44
harry8 wrote: post #34

Earlier quoted context omitted.

>Well technically they don’t own the debt Channelling the 1980s for off-balance sheet financing 101. From an economic perspective there is zero difference between borrowing to buy an asset and entering into a non-cancellable long term (equivalent to its economic life) lease for the asset. The first option causes an asset and a liability on the balance sheet, affecting debt ratios that appear in financing contracts an…

This is not true at all, leases appear on balance sheets. It's not the 80s anymore See Apple's FY2025 10-K, the leases are in page 42 under "Lease-Related Assets and Liabilities", which shows: Operating leases - Other current liabilities: $1,579 million - Other non-current liabilities: $10,911 million Finance leases - Other current liabilities: $538 million - Other non-current liabilities: $692 million Total lease li…

According to the article they don't have to declare leases or GPUs until the datacenter becomes operational

Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

#237

Post by preg_match »

londons_explore wrote: post #100
laughing_man wrote: post #51

Earlier quoted context omitted.

The problem is if large banks fail they take everyone else with them. We should have dealt with this in 2009, but for some reason it didn't happen. But money talks, I guess.

Iceland let it's banks default, and is now doing rather well. In fact, bank failure and then having the government only guarantee ~$50k of funds per person is a good way to hand wealth to the people and take it from corporations and the super wealthy.

We have similar FDIC insurance in the US. The solution is companies have many, many deposit accounts to still get the insurance, mostly for payroll purposes.

Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

#238

Post by rvz »

The 5 horse men of the AIpocalypse.

But this reminds me of 2008. Because when it goes all wrong, the US government is just going to bail them out just like they did with the banks to just keep the scam going.

Because after all, they will be treated as "too big to fail".

Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

#239

Post by JohnFen »

UberFly wrote: post #57
spaceman_2020 wrote: post #41

Earlier quoted context omitted.

They think they’re immune. Even after Luigi, they still think they’re immune

As far-fetched as it sounds, I'd prefer elected officials and the justice system hold people accountable rather than psychotic murderers.

I wish that such systems in the US could be relied on to do that as well. It's pretty clear, though, that they can't.

Re: Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

#240

Post by porridgeraisin »

lemax wrote: post #134
darth_avocado wrote: post #3

Well technically they don’t own the debt, the SPVs that own the data centers do. The giants just have long term commitments, but if shit hits the fan, it’s not the tech giants but the banks that lent the money to the SPVs that are at risk. This usually means all of us are on the hook.

These are relatively contained private credit markets though. We’re not looking at anything 2009 level. For scale, total US mortgage debt peaked at $9.3T ahead of the subprime mortgage crisis, 73% of GDP at the time. We’re talking here about ~5% of GDP.

This is the most relevant comment in this thread.
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