With the VC money faucet being cut off, there is no way OpenAI or Anthropic will be able to cover their debt repayments that start in 2027. The media is failing at basic math at this point.
They’ve been failing at literally every step in AI coverage, especially at just parroting whatever the fuck anthropic and openai claim to be their newest breakthrough without questioning anything. Failing basic math is just icing on the cake.
What’s fun is now you can stick it to a bank easily by taking out all your money and investing it yourself. Make money off your own money. Cuz they sure do when they have it. (Hence the wait time when withdrawing large amounts)
Lots of trade apps out there now. You only need banks for holding small transaction amounts for paying bill. Soon they won’t even be required for that.
Like the article says, their internal risk management models are telling them to get the risk off their books.
Taking on the debt in the first place is like agreeing to store a gallon of milk in a fridge for an undetermined amount of time. The milk is going to go bad, and when it does the jug (or bag) might explode forcing a cleanout of the fridge, throwing out other things in the fridge, and maybe replacing the fridge altogether if the milk leaked down into a lot of crevices. Everyone knows the milk will go bad, but the big banks will know how old the fridge is, what coolant it uses, how old the compressor is, how many times a day the fridge has been opened, the average time it stays open, the dairy the cow who produced the milk, and the name of the cow if they can get it. The milk is going bad quicker than expected, and they’re finding out they don’t want to be the ones to guess when the jug will explode, and they’re also finding out that nobody else wants to buy the jug.
Oracle pulling a “god did it” was probably a part of this, but nobody involved is going to give a real answer.
We could put a lot of nicer groceries up front and hope nobody looks deeper!
But then what happens if someone notices we’re selling a lot of fridges? They could buy insurance on the price of our fridges (options), and that wouldn’t be good because we know the price is going down, that’s why we’re selling them (duh). So we’ll have to sneak all these things out the door and hope nobody looks or notices until we’ve got them all sold.
I guess that’s kind of a rough metaphor, but that stuff all still goes on. The math that tells you when to sell the fridge is where all the real value is.
No they can’t do it forever. Exponentially growing demands outrun everything eventually. The onl, way out of this are either controlled deflation of the bubble or a hard crash. The former is possible but unlikely.
They have unlimited resources and can keep this floating longer than any of us can imagine.
Softbank doesn’t.
With the VC money faucet being cut off, there is no way OpenAI or Anthropic will be able to cover their debt repayments that start in 2027. The media is failing at basic math at this point.
They’ve been failing at literally every step in AI coverage, especially at just parroting whatever the fuck anthropic and openai claim to be their newest breakthrough without questioning anything. Failing basic math is just icing on the cake.
What’s fun is now you can stick it to a bank easily by taking out all your money and investing it yourself. Make money off your own money. Cuz they sure do when they have it. (Hence the wait time when withdrawing large amounts)
Lots of trade apps out there now. You only need banks for holding small transaction amounts for paying bill. Soon they won’t even be required for that.
Like the article says, their internal risk management models are telling them to get the risk off their books.
Taking on the debt in the first place is like agreeing to store a gallon of milk in a fridge for an undetermined amount of time. The milk is going to go bad, and when it does the jug (or bag) might explode forcing a cleanout of the fridge, throwing out other things in the fridge, and maybe replacing the fridge altogether if the milk leaked down into a lot of crevices. Everyone knows the milk will go bad, but the big banks will know how old the fridge is, what coolant it uses, how old the compressor is, how many times a day the fridge has been opened, the average time it stays open, the dairy the cow who produced the milk, and the name of the cow if they can get it. The milk is going bad quicker than expected, and they’re finding out they don’t want to be the ones to guess when the jug will explode, and they’re also finding out that nobody else wants to buy the jug.
Oracle pulling a “god did it” was probably a part of this, but nobody involved is going to give a real answer.
Uh brother! (or sister on non binary sibling).
You just sell the entire fridge as a sub prime fridge and watch the number go up.
We could put a lot of nicer groceries up front and hope nobody looks deeper!
But then what happens if someone notices we’re selling a lot of fridges? They could buy insurance on the price of our fridges (options), and that wouldn’t be good because we know the price is going down, that’s why we’re selling them (duh). So we’ll have to sneak all these things out the door and hope nobody looks or notices until we’ve got them all sold.
I guess that’s kind of a rough metaphor, but that stuff all still goes on. The math that tells you when to sell the fridge is where all the real value is.
No they can’t do it forever. Exponentially growing demands outrun everything eventually. The onl, way out of this are either controlled deflation of the bubble or a hard crash. The former is possible but unlikely.
Property has been crashing since covid. They circular financing for as long as they can, which might be quite a while.
But fact of the matter is that the people who run the market are the ones that decide who wins and loses. And they never lose.