Comment by wmf

Comment by wmf 3 hours ago

2 replies

Google, Meta, and Microsoft are funding AI out of their existing profits so they will probably be fine. The others may be getting GPUs in exchange for equity but they still have to pay real money for the datacenters, generators, etc. That real money is borrowed and they would default in case of a crash. Potentially hundreds of billions of defaults.

hollerith 3 hours ago

Huh? Surely most of the investment in AI labs is equity investment, not debt (so it can't be defaulted on).

  • wmf 3 hours ago

    The latest xAI GPU SPV is 2/3 debt; maybe that's a trend or maybe not. The debt will be defaulted and the equity will be recapitalized to almost nothing. Same outcome.