Big Tech is borrowing like never before • Hacker News Board

Re: Big Tech is borrowing like never before

#51

Post by rchaud » Sat, Jun 20, 2026, 10:59 PM UTC

chrismorgan wrote: post #47

thewebguyd wrote: post #24

Earlier quoted context omitted.

Yes, because of play services. Eventually the world would adapt, but the immediate effect is that nearly every major commercial app that is increasingly requiring play integrity, play services will stop working. Push notifications will also break, as will the payment network. Google Pay, Apple Pay, Samsung Pay etc are essentially shadow banks now. The real impact of Google going dark though is less Android and more a…

You almost make me hope, that the web can be saved.

We shouldn't be needing native apps at all to do things like banking. If it works in the browser on a laptop, why shouldn't it do so on a phone?

Re: Big Tech is borrowing like never before

#52

Post by rchaud » Sat, Jun 20, 2026, 11:08 PM UTC

paulddraper wrote: post #13

smrtinsert wrote: post #9

Is it me? I feel like we are entering an era where it has become possible for one of the big companies to fail.

Yahoo failed. AOL failed.

Both of those companies were essentially expendable in terms of keeping the economy running. AOL didn't own any cell towers and Yahoo didn't have any Pentagon contracts.

Re: Big Tech is borrowing like never before

#53

Post by mikewarot » Sat, Jun 20, 2026, 11:23 PM UTC

zer00eyz wrote: post #39

dmoy wrote: post #19

$500B is a lot of debt, it's comparable to the three largest car companies' debt. It's still not super huge compared to the amount of debt in other industries, but I guess the thought is it's riskier?

500B on software would be a lot. On infrastructure, it really isnt. We spent this much (without adjusting for inflation), in 5-10 years on telecom build out in the lead up to the dot com crash. I'm fairly sure that there is still leftover capacity in the ground (dark fiber) today that we can leverage. Smell like a bubble yet? Looking back to that pre 2000's era, SUN was running on 50% margins, Cisco at 68% Nvidia, 70…

>the sooner it happens the sooner we can move on to actual (sane) innovation, that leverages this build out.

Unlike dark fiber which retained value, GPUs and compute hardware rapidly becomes obsolete. It won't make sense to use anything more than 4 years old, as performance and especially energy efficiency will have improved in that time.

I wouldn't count on getting significant value out of the debris of the coming data center implosion.

Copper thieves are likely the only ones who might, but there will likely be a glut and the risk likely won't be worth it for even them.

Re: Big Tech is borrowing like never before

#54

Post by esseph » Sun, Jun 21, 2026, 6:06 AM UTC

mikewarot wrote: post #53

zer00eyz wrote: post #39

Earlier quoted context omitted.

500B on software would be a lot. On infrastructure, it really isnt. We spent this much (without adjusting for inflation), in 5-10 years on telecom build out in the lead up to the dot com crash. I'm fairly sure that there is still leftover capacity in the ground (dark fiber) today that we can leverage. Smell like a bubble yet? Looking back to that pre 2000's era, SUN was running on 50% margins, Cisco at 68% Nvidia, 70…

>the sooner it happens the sooner we can move on to actual (sane) innovation, that leverages this build out. Unlike dark fiber which retained value, GPUs and compute hardware rapidly becomes obsolete. It won't make sense to use anything more than 4 years old, as performance and especially energy efficiency will have improved in that time. I wouldn't count on getting significant value out of the debris of the coming d…

Compute, ram, storage are still plenty useful.

Re: Big Tech is borrowing like never before

#55

Post by zer00eyz » Sun, Jun 21, 2026, 4:12 PM UTC

mikewarot wrote: post #53

zer00eyz wrote: post #39

Earlier quoted context omitted.

500B on software would be a lot. On infrastructure, it really isnt. We spent this much (without adjusting for inflation), in 5-10 years on telecom build out in the lead up to the dot com crash. I'm fairly sure that there is still leftover capacity in the ground (dark fiber) today that we can leverage. Smell like a bubble yet? Looking back to that pre 2000's era, SUN was running on 50% margins, Cisco at 68% Nvidia, 70…

>the sooner it happens the sooner we can move on to actual (sane) innovation, that leverages this build out. Unlike dark fiber which retained value, GPUs and compute hardware rapidly becomes obsolete. It won't make sense to use anything more than 4 years old, as performance and especially energy efficiency will have improved in that time. I wouldn't count on getting significant value out of the debris of the coming d…

> GPUs and compute hardware rapidly becomes obsolete. It won't make sense to use anything more than 4 years old

Historically this would be (somewhat) accurate for CPU's. However there are already companies that "unrack" at the 10 year mark for CPU based compute.

The problem is that performance per watt isn't going to go UP, and that matters. More power means more cooling, and harder to maintain (liquid over air).

I suspect that much of the hardware installed today, is going to be running almost unchanged in a decade.

Re: Big Tech is borrowing like never before

#56

Post by mathattack » Sun, Jun 21, 2026, 6:34 PM UTC

spwa4 wrote: post #48

mathattack wrote: post #21

Earlier quoted context omitted.

It’s not just yield. Its debt gets paid first. And if you miss the interest payments the debt holders get the company.

If you mean that taking out any kind of debt is fundamentally a bet that whatever is being put up as collateral will grow faster than the interest rate? Because if it doesn't the risk that suddenly debt holders control you grows by a lot . Yes, absolutely. So, applied to GOOG, Alphabet Management is betting they will grow more than 4.5% per year at least until 2030. There is also some weirdness, like Alphabet making…

Sort of. They can use the debt to grow, in which case they’re betting that they will get more profit than the principal plus interest payments. (Beating a 4% return on the loan, not the whole company)

They could also use it to change the capital structure buying back shares. This simultaneously increases risk and share price, unless the reissue more shares.

In both cases, if they can’t pay the interest payments, the company gets handed over to the creditors. Not an issue for Google, but a lot of startups struggle with venture debt.