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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

#81

Post by superze »

AznHisoka wrote: post #4
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.

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 :)

Always remember kids. Socialism is bad, it's only good if we bail out banks with billions. While you lose your house, and your job, they get bonuses.

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

#82

Post by ItsBob »

It's hard not to be fatalistic about all of this now: In my mind, it's crystal clear that the investments will never be paid back. The revenue streams from all the companies involved don't add up. It must fail at this point.

That means losses. Big losses for some.

I assume that these off-the-books companies can quite literally be pinched off and the debt becomes the banks' problem, so the primary company, i.e. Meta, Oracle, can walk away but the banks will be left holding the bag.

We know what happened the last time the banks played their stupid games!

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

#83

Post by dofm »

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.

So would those guys in the boats in the Caribbean and the girls in that Iranian school, but the purpose of a system is what it does.

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

#84

Post by spwa4 »

fancyfredbot wrote: post #69
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.

Things have changed since 2009. It would be private credit which fails this time, not the banks. Private credit is not supposed to be systemically important and it's not supposed to need bailing out. Maybe we'll find out how true that is in practice.

Why would you think that? You think pension funds and governments didn't invest this time? Because that's the problem, governments either investing everyone's money directly (to fund their own loans and expenditures, or should I say fund their own expenses using pension money without admitting that's what they're doing to pensioners) or indirectly force investments (you'll find pension funds worldwide are legally only allowed to invest in loans to the government and specific things the government allows (like politicians' charities). "For safety", of course, no other motivations there)

We can check if governments went back to their own tricks or not after 2008. What were the interest rates after 2008? Quick check ... yep, they went back to the old tricks.

When "shit hits the fan". Either governments really cut spending, leave pensioners without income and see their new loan interest spike to 10%+ (if they're lucky) ...

OR they do a massive cash injection saving the banks, and increase spending.

Which would you chose? It doesn't even matter. If you were the government and chose the first option, you would quickly find suddenly everyone across the political spectrum uniting to depose you. A decent chunk of people would literally not have any other choice but to do that.

(of course, as per usual governments aren't behaving "correctly" according to economic theory. If you take the old "government as spender of last resort" governments should have radically cut spending in the last 10 years, because there was no need for extra spending. If you take the new "government invests pensions", then of course government spending needs to be investment. In other words, governments only allowed to spend like a normal investor, expecting and demanding a return. Ie. no social spending increases. In practice governments increased spending at any cost, and so we're in trouble again)

Oh and should I mention that for any other entity investing pension money in loans to yourself is a very unique thing in law. It is THE ONLY financial crime where corporate structures do not protect management. You're the worldwide president of ExxonMobil? Doesn't matter. You do with employee pension money what government does with it? (ie. loan it to yourself, in this case ExxonMobil). You go to jail. Directly and long-term. In America. In Spain. In Japan. In fucking Vatican city.

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

#85

Post by walrus01 »

ItsBob wrote: post #82

It's hard not to be fatalistic about all of this now: In my mind, it's crystal clear that the investments will never be paid back. The revenue streams from all the companies involved don't add up. It must fail at this point. That means losses. Big losses for some. I assume that these off-the-books companies can quite literally be pinched off and the debt becomes the banks' problem, so the primary company, i.e. Meta,…

For anyone old enough to remember attending bankruptcy/liquidation auctions of "dotcom 1.0" companies in 2000, 2001 or so and buying an Aeron chair, or similar, I really wonder what it will look like this time around. There was one point in time where only very slightly used datacenter cooling systems and diesel backup generators were selling for pennies on the dollar.

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

#86

Post by Terr_ »

bayarearefugee wrote: post #20
al_borland wrote: post #15

Earlier quoted context omitted.

I don’t know if the public would be as accepting of a bailout for AI companies… trillion dollar businesses that pushed technology with the goal of eliminating 50% of white collar workers… that isn’t really mission critical. If they want the reward, they need to accept the risk when the bet doesn’t go their way. If they aren’t willing to accept that, they shouldn’t be making such big bets.

> I don’t know if the public would be as accepting of a bailout for AI companies That's putting it mildly, IMO. An AI bailout would be a poison pill that would electorally doom whichever party was behind it for decades.

> An AI bailout would be a poison pill that would electorally doom whichever party was behind it for decades.

Two concerns:

1. In a duopoly it won't doom either one party, not if the bailout-seekers involved are able to bribe them both equally.

2. A politician in not-so-bad party could let the other party doom itself in a long-term diffuse sense... Or they could accept some generous short-term very concentrated-on-me donations. The interest of the group is not always the interest of the members.

The US desperately needs voting-reform, to reduce the spoiler-effect and winner-take-all mechanics.

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

#87

Post by laughing_man »

spaceman_2020 wrote: post #7
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 :)

Replace you with AI, and when the AI math falls apart, use your tax money to bail out AI And they’ll get away with it too

How are they going to use my tax money if I stop working and don't pay taxes?

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

#88

Post by walrus01 »

WoodenChair wrote: post #30
King-Aaron wrote: post #13

These debts mean nothing if the US government actually views AI technology as being on par with the Manhattan project. They'll just bail them out or nationalise them.

> These debts mean nothing if the US government actually views AI technology as being on par with the Manhattan project. They'll just bail them out or nationalise them. According to Wikipedia, the Manhattan project only cost $28 billion in 2024 dollars. That's a completely different order of magnitude compared to what we're talking about here. I imagine the size of the investment here would even be hard for the US go…

Or, whole program development and per unit costs included, about the equivalent of 14 units of B-2 bombers in 2024 dollars.

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

#89

Post by m101 »

ItsBob wrote: post #82

It's hard not to be fatalistic about all of this now: In my mind, it's crystal clear that the investments will never be paid back. The revenue streams from all the companies involved don't add up. It must fail at this point. That means losses. Big losses for some. I assume that these off-the-books companies can quite literally be pinched off and the debt becomes the banks' problem, so the primary company, i.e. Meta,…

The banks aren’t the ones on the hook here. Private credit funds are.

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

#90

Post by lelanthran »

no-name-here wrote: post #72
spaceman_2020 wrote: post #42

Earlier quoted context omitted.

The public has been apathetic about every single thing and will just continue scrolling their TikToks Public anger is a very pre-smartphone thing. You don’t worry about those sort of things when you’ve hyperoptimized the circus and made the bread cheap enough

> Public anger is a very pre-smartphone thing. Public anger has gotten to the point that right-wing groups are pushing US legislation to outlaw it as “terrorism” [1], with the president of the right-wing American Heritage think tank pointing to examples such as “college students who took over campus quads” [2] and town halls with congress members getting shut down [3] - they say new laws are needed because public ang…

I gotta know, which of those specific points in your second citation do you have a problem with? The only one I can see having a problem with is "d. Subversion...".

I expect that most voters welcome efforts that aim to stop other groups using violence and intimidation to suppress their speech or legal religious activities.

The only problem with these proposed laws is the same problem with all existing laws - selective enforcement.

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