91–100 of 232 posts
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Is Meta actually obligated to repay the loans or not? That’s how you can decide if this is disingenuous or not. If Meta is obligated to repay the loan and used to synthetic means to get it off the balance sheet that’s a problem. If they have in fact successfully transferred risk to other parties then that’s what deals like this are for. It’s the whole reason the concept of limited liability exists. I am fully willing…
They aren't, but they're obligated to pay leases for it (they can't just build the datacenter and then walk away), which is kind of like having to repay the "loans".
Earlier quoted context omitted.
No one is lying or deceived here.
It’s not necessarily lying, but it’s certainly deceptive.
It’s easier to think of this as “project risk” as opposed to corporate risk overall.
This isn’t different than creating a subsidiary to embark on a new program, with its own debts and assets, collateralized by a parent company.
It’s effectively the same as what happens every time a major movie studio starts a new film project.
Folks in the comments here begging ChatGPT to teach them how to read
This article is poorly written. It’s so desperate to be clever and edgy that it’s hard to get the facts out of it. ChatGPT isn’t really a solution because the source is both low quality and has questionable motives. Going to any of the other good articles on the subject that have been linked in this comment section is much better.
Things that are hard to read because you lack context is not the same as poor writing.
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Earlier quoted context omitted.
If the llc declares bankruptcy does meta have to pay the bank for it - or can they buy the assets at fire sale prices?
Mechanistically, how would the LLC achieve bankruptcy?
> This treatment is considered acceptable because the people who decide what is acceptable have accepted it. Wasn't that the root of the 2008 crash? The debt spiral was acceptable because people were making enough money in the present that regulators were powerless to advise against it. In a sane world people often go to jail for decades when doing this at pennies on the dollar.
The 2008 crash was in part caused by inaccurately rating synthetic bundles of subprime mortgage debt as extremely low risk (e.g. AAA). Subprime borrowers had a much higher risk of defaulting than a AAA rating implied. On the other hand, Meta has great creditworthiness. And guarantees this vehicle. So... it's not the same.
I’m guessing Meta isn’t the only one doing this
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This might be the first time an explicit ChatGPT response survived being the top comment I personally think it’s a great response and makes it clearer what’s happening Times are changing quickly!