chuckle
> And unlike earlier periods of heavy debt, the Federal Reserve is no longer a big buyer of Treasuries, placing a heavy burden on private-sector investors.
You may have seen the headline recently where Sec. Bessent held up a mockup of a bill printed out on a regular sheet of letter paper[0], and there's bill circulating to change the law, but it will not pass[1].
0: https://ichef.bbci.co.uk/news/1536/cpsprodpb/97ed/live/f6126...
1: https://www.congress.gov/bill/119th-congress/house-bill/1761
https://www.pbs.org/newshour/politics/u-s-mint-produces-a-1-...
We have only begun to extract the value of commoditized intelligence. Sure there are arguments on local models and pricing power.. but I think we will be compute constrained for the near future.
Journalists have been eager to call AI "over" since 2022, and yet:
- Models just got good at writing code this year
- Models just got good at editing images last year
- Models just got good at cinematic video this year
This hasn't even played out. It hasn't even started.
Why on earth would this be the end?
The robotics story is just getting started, too.
I literally do not write code anymore.
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".
My future's so bright I gotta' wear million dollar shades.
You say this as if when "lending stops", it isn't a big deal. What you're describing is a concern for a collapse in finance markets.
FWIW Enron was also a „sophisticated company“ at the time
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 care about the long term health of the company. They only think about next quarter (in a misguided interpretation of "shareholder duty/fiduciary duty") and their bonuses tied to their KPIs.
> 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 system definitely is overloaded to hell and beyond after well over a decade of ZIRP. That money never got deflated out of the system in a healthy way and now everything is looking to fall apart.
Unfortunately, such events are already "priced in". VC essentially is built on 1 of 100 investments striking it big and 99 going bust. A market correction won't hurt the big guys, but it will definitely hurt all the small guys.
Any historical precedent for this all occurring together with technological hype/fast growth?
That setup isnt true for the US, not even close.
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.
Fiber and railroads don't need tens of billions of dollars in continuing yearly maintenance expenses to keep them from going stale.
Now if the number was ?? and labeled "undisclosed"... that would present a more serious problem.
Still no credible long term solution to the so-called "UBI" for all and the abundance fantasies and the utopia that was supposedly "promised".
Rather than it being presented as productivity tool for enhancing human labor and activity, it's presented as an eventual god that will radically transform the rules of economics and everything else, and thus it needs to be forced into everything. That's absurd hype and with it all the absurd VC funding and valuation. Thus it's seen as a huge financial bubble.
This could happen this year or next, assuming you're willing to pay $30k for the hardware.
- Fable
- Seedance 2.5
- Nano Banana / GPT Image
- Kimi K3
- Minimax H3
- ChatGPT
These tools are 80-90% of my day now.
Google Search? Meh. Chrome? Eh. Mac or Linux? Honestly just input devices now.
The models are the hottest thing in the world.
I am getting so much done. If I told myself from two years ago the progress these models would have made, I wouldn't have believed it.
Absolutely lots of hype but there is lots of value behind generated (unlike crypto) and we are still very early. This is what I was pointing at. There are folks on very extreme both sides, you are a good example, and I happen to believe it’s probably somewhere in the middle.
If any one of these happens, or two, or all three, then the loans for trillions will become worthless while the use of AI can explode. The relationship between cost and ai intelligence output need not be linear over time, which is absolutely what the people financing are assuming.
Personally, I think linear over 5 years is about right, but no longer than that.
I think other industries are use to being continually disrupted by advances in technology and so will adapt easier and faster. Which again, is kind of ironic..
(i am a dev myself but it still makes me laugh)
Similarly, majority of people still don't 3D-print stuff they can get cheaply at Walmart or from Amazon. Or use VR/AR as their primary form of interaction.
I too would use "plenty" rather than look at the horribly depressing stats.
Basically, 80% of sales are still brick-and-mortar. That doesn't seem very depressing?
One thing's for certain: There's no way anyone who's come close to Sauron's Ring (made actual use of AI) wants to part with it :')
Although at its peak, CSCO was up ~2500% in a 5-year period, whereas NVDA is “only” up ~1000% in a similar timeframe.
Ever since the 2008 housing crisis, people have been predicting the next bubble-burst/black-swan event.
The one that really crushed the markets was the one almost body saw coming: Covid-19.
Tulips, 1929, Dotcom, Great Recession, 2010's Flash Crash - none of these were in the public discussion before they happened.
The "public discussion" is a whole different thing. They weren't in the public discussion because macroeconomic theory isn't something mom and pop like to chat about on the weekend. They only become dinner-table discussion topics when the impacts hit main street, after they happen. But bubbles in recent history have been pretty reliably identified beforehand:
https://web.archive.org/web/20180330001927/https://www.barro...
https://www.economist.com/special-report/2005/06/16/in-come-...
It isn't hard for economists to find bubbles, where the market is taking on high levels of risk. What is downright near impossible to do is predict what specific event will cause the dominos to begin dropping, or when it will happen.
Anecdotally, I have family who don't follow the stock market at all and are talking about the "AI Bubble" that's about to pop.
That's why timing the crash is hard. The market has to agree with you but also at the right time
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.
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.
We need to stop thinking that just because they have money they're incredibly sophisticated. We have a few examples like Mark Zuckerberg, who had early success with FB, but he seems to be incapable of investing in profitable products. E. Musk: great at selling his companies, but laughably bad at making profits at the same level of expenses. Sam Altman: never had a real job he did well other than raising money. This is the kind of people that control these companies.
NVDA had the foresight two decades ago to invest in CUDA. That's not next quarter thinking.
eh trolling for clicks. It's just not on the balance sheet (if i have my terms correct) so you have to look in a different report to find the numbers. If it was truly hidden then discovery of the debt would trigger lawsuits from investors. Major investors know about it already that's why no one is getting upset over it except for laymen. btw, laymen in the stock market (retail investors) just serve as red meat or cannon fodder for actual traders with real money and real information.
edit: there will def. be significant winners and losers, the stakes are very high and the dollar amounts are very large.
A lot of publications pay attention to that.
A lot of people love reading things (often only reading things) that make then feel right/correct/justified.
A lot of publications live or die on ad views.
And just like that we have a viable media business model!
bravetraveler•1h ago
For those without accounts, given faded body