AI's debt binge can't last, hidden borrowing reaches $1.65T • Hacker News Board

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

#71

Post by nemothekid » Mon, Aug 03, 2026, 9:59 PM UTC

cmiles8 wrote: post #61

It completely unclear where this 1.65T is going to come from to pay the bill. Revenue from people buying AI doesn’t even come close to covering it, even with crazy aggressive assumptions about the cashflow that could be generated from that. The Wall St vs Silicon Valley showdown that’s setting up here looks like it will be quite epic. If last week was any preview, get your popcorn ready.

The number is large - but I'm not quite sure it's existential. The hyperscalers have been making a ton of money and I'm not quite convinced that 200B of debt for Amazon is "world ending".

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

#72

Post by cavemandaveman » Mon, Aug 03, 2026, 9:59 PM UTC

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's cynical nonsense that executives don't look past the next quarter. There would be none of this AI investment if that were true. It's all a long-term play with huge investments and minimal revenue by comparison in the short run.

NVDA had the foresight two decades ago to invest in CUDA. That's not next quarter thinking.

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

#73

Post by afry1 » Mon, Aug 03, 2026, 10:02 PM UTC

mapping365 wrote: post #70

The people who made money on fiber and railroads were the inheritors after the timeline mismatch bankrupted the original players who did the investment. Even if AI turns out to be everything it promises, you can mistime the investment and lose everything.

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.

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

#74

Post by buredoranna » Mon, Aug 03, 2026, 10:02 PM UTC

I get the sentiment, but providing an actual number stretches the word "hidden" beyond its breaking point.

Now if the number was ?? and labeled "undisclosed"... that would present a more serious problem.

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

#75

Post by boelboel » Mon, Aug 03, 2026, 10:03 PM UTC

bdangubic wrote: post #69

darth_avocado wrote: post #59

Earlier quoted context omitted.

> As a bystander directly immune to the fortunes of AI going up or down Sorry to break it to you but you are neither immune nor a bystander to the fortunes of AI going down. You are part of it all whether you like it or not.

you can 100% and totally be immune to it

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

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

#76

Post by rvz » Mon, Aug 03, 2026, 10:03 PM UTC

It appears that it is more likely that AI will cause the next financial crisis than crypto will.

Still no credible long term solution to the so-called "UBI" for all and the abundance fantasies and the utopia that was supposedly "promised".

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

#77

Post by msandford » Mon, Aug 03, 2026, 10:04 PM UTC

bdangubic wrote: post #69

darth_avocado wrote: post #59

Earlier quoted context omitted.

> As a bystander directly immune to the fortunes of AI going up or down Sorry to break it to you but you are neither immune nor a bystander to the fortunes of AI going down. You are part of it all whether you like it or not.

you can 100% and totally be immune to it

How do I get zero direct and indirect stock market exposure, no electricity price impact, no RAM or GPU price impact, etc?

I'd love to live in a world where AI firms bidding these things up doesn't affect me but I'm really struggling to understand how they aren't impacting the market.

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

#78

Post by billywhizz » Mon, Aug 03, 2026, 10:04 PM UTC

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?

the fact fortune magazine is the one ringing the alarm bell here is arguably more useful information than any attempt at a "mathematical proof".

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

#79

Post by runarberg » Mon, Aug 03, 2026, 10:05 PM UTC

rybosworld wrote: post #37

kube-system wrote: post #30

Earlier quoted context omitted.

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.

I was there for the Great Recession, and they were indeed in the public discussion. I remember the year 2007, as a 20 year old anti-capitalist, I was counting days until the economic crash. As predicted by plenty of left-wing economists at the time.

The only people who didn’t see it coming were the capitalists who were invested in the inflated market, and had bought into pseudo-scientific economic theories that served the single purpose of affirming what the capitalists already believed.

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

#80

Post by billywhizz » Mon, Aug 03, 2026, 10:06 PM UTC

seizethecheese wrote: post #8

> AI’s insatiable need for debt has so far been matched by investors’ appetite for it, but they may turn nauseous on the belly-busting volumes coming from tech giants. Headline doesn't really match the facts in the article. The article seems to say "hyperscalers are borrowing an enormous amount and so far people are lending to them. Other people are worried that this will stop".

"people are lending to them" is doing a lot of heavy lifting here. e.g. https://prospect.org/2026/08/03/ai-bailout-could-be-baked-in...