Banks are now trying to offload the AI data center debt they just underwrote

https://startupfortune.com/banks-are-now-trying-to-offload-the-ai-data-center-debt-they-just-underwrote/

51•smartmic•42m ago

Comments

blurbleblurble•26m ago

They should offload the overprovisioned, hyper concentrated GPUs back to the people

CodingJeebus•25m ago

This tracks with recent reporting that AI debt issuance fell 50% month over month in September[0]

> Tech companies raised $23 billion in AI-related debt globally in September, less than half the amount raised in August, according to Morgan Stanley data covering public bonds and private placement transactions.

> The decline marks a continued drop from June, when companies raised a record $113 billion for AI infrastructure including data centers and chips. In the US investment-grade market, where blue-chip tech groups borrowed around $306 billion between January and August, AI-related bond issuance stopped completely last month.

0: https://www.investing.com/news/stock-market-news/tech-compan...

plouffy•23m ago

This is just what banks do O_o underwrite loans, then collateralize (i.e. bundle) to people who want the risk.

jfsynfyjbdf•15m ago

yes just like mortgage backed securities in 2007

yxhuvud•11m ago

I reacted the same. What could be a bad sign though is if they try to sell it and they dont get what they want.

ceejayoz•9m ago

> This is just what banks do…

Sure. Sometimes they cause global financial crises as part of that process.

https://en.wikipedia.org/wiki/2008_financial_crisis

parineum•3m ago

You might as well say that banks giving mortgages caused that. Sure it happened as part of the process but that wasn't the thing that caused the problem.

ceejayoz•1m ago

No, banks collateralizing mortgages caused it.

https://en.wikipedia.org/wiki/Collateralized_debt_obligation

cromka•19m ago

So, is this the type of signs we should be on the lookout anticipating an impending implosion?

dragontamer•12m ago

Depends on what price the banks offload at.

When the debt in 2007 sucked, it crashed the economy. But when the price was good in 2006, everyone celebrated.

Note: prices are getting worse for bonds today but nothing panic worthy yet.

shermantanktop•7m ago

If I knew the answer to that I’d go short some stock…and maybe not post about it.

iovrthoughtthis•17m ago

Who is building the infrastructure to resell the gpus from failed data centers if / when this collapses. It would be a waste for everything to get wasted

cosmotic•9m ago

The GPUs used in data centers cant really be used outside the same context. They cant connect to standard PCs or servers. They are highly specialized. The resale would need to be at the server or rack level for the same use case.

michaeljx•8m ago

I saw an article a couple of days ago on one of the popular sites (ft or Bloomberg or something), about how now is a great opportunity to purchase private company credit. Guess this is the submarine https://paulgraham.com/submarine.html

nyorai•3m ago

When are we getting CDOs with Nvidia GPUs as collateral as Nvidia envisions?

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