Exititis makes accounting look creative.
tldr; They used “special-purpose vehicle” to hide the debt. Accounting’s version of “anal doesn’t count, silly”.
Makes sense. Oligopolies collude. No news there.
A bigger factor in AI fraud economy, is the circular fake assets and fake revenue. $1T valuations in top 2 LLM providers implies $50B-$100B eventual recurring profits with little to no reinvestment. $1.75T SpaceX valuation was based entirely on fraud of at least 5x more expensive space data centers than earth and supposed 90% of value of company is based on Grok enterprise TAM. IPO was boosted with fake Anthropic paper lease where they were renting gpus for 5x the cost, and over 2x the list price of on demand rates from Nebius/coreweave, but with instant cancel clauses, and “first 2 months free” scam. 11th hour similar Google deal (who owns 6%+ of spacex) further amplified the SpaceX fraud IPO.
The main circular fraud though, is most of the companies (Nvidia not mentioned) in article put an inflated asset on their balance sheet, while trading revenue credits for those investments. Article’s “footnote debt” is largely to serve those revenue credits.
I’ve said it before, I’ll say it again…
The country which will win the AI race is the one who wastes the least amount of money on AI infrastructure.
The US will be the biggest loser in this “competition”.
It’s going to be whichever country has the most human researchers.
We could have avoided it if politicians didn’t fell for big tech’s tricks…
Politicians didn’t fall for anything. They’re getting kickbacks and are voting accordingly.
The AI bubble will pop within the next couple of months. It’s pretty interesting, I wonder if we’ve ever seen an economic bubble so clearly before it comes to an end.
Every crypto bubble?
Why months, not quarters or years?
More like it’s already popping. The Korean AI bubble already popped, dragging Intel, AMD, ARM, Nokia and others down by a significant amount. They won’t bounce back. SpaceX is going down down down. QE won’t save this one because nobody wants USD anymore.
I agree, it’s already popping. But the pop is still very, very slow with most investors still in denial and keeping their paragliders open.
Five companies owe more money than their balance sheets admit. A Nikkei analysis of financial footnotes at Alphabet, Microsoft, Amazon, Meta, and Oracle found $1.65 trillion in off-balance-sheet obligations tied to AI infrastructure — binding, must-pay commitments parked in the fine print
Good thing I don’t invest in these big names, not only because of overvaluation but also because of corruption. My mom told me to be careful with investing because companies go bankrupt but i kinda dismissed her concerns because I am thinking that the days of Enron accounting magic is over. But it looks like it’s still alive and well. Although I doubt executives will be held accountable.
I don’t know why, but I read this as “Five Guys” and thought holy shit I didn’t realize a burger company could be so broke. No wonder their prices are so high!
I am actually thinking ask of these companies imploding would be good for the human race.
Imagine a solid hard reset on the internet? Yes please.
Will this fuck me over yes, but that will be temporary
We gotta start building alternatives already. Us being here on Lemmy is already a start.
Everything is temporary when you think about it
Life is just a temporary break from death.
I am not sure how much to trust this article but what they have been doing is not concealed at all.
They are literally passing the money in a big circle so it looks like actual revenue.
I feel like I’m taking crazy pills that the established marketplace hasn’t already torpedo’d the fuck out of it.
They have been spending money like water to try and build data centers but doing such a terrible fucking job of it that they have just managed to piss off every landowner in America because their way of doing business is, “Trust me, bro”, then shitting all over the towns they build in, because they think somehow the towns should be grateful that XYZ has a data center there that doesn’t absolute fuck all for the actual community.
The demand is so high that tech bros are coming out of the woodwork, just like the dotcom era, trying to get a piece of this pie, but then these tech bros are the reason these large companies are shitty at their job. They don’t understand that rural America isn’t smoking the jerk off crack that they use to convince middle management to slave for them.
They look at “stakeholder engagement” as some sort of bankrupt woke ideology, then wonder why cities, counties, and states are legislating moratoriums on data centers.
They see the money these idiots are throwing at the problem and just want a piece of the pie. They don’t think, “Ooh, I can do that better, faster, stronger…” They think that the want a piece of that revenue. They think they can put together some data center EPC, maybe even with an electric generating component, then turn around and sell the EPC company.
It is snake oil salesmanship from top to bottom.
Every single motherfucker actively trading on these guys are part of the problem.
AI is not the problem, it is the tech bros selling it.
They should all be buried alive in concrete. They are so delusional they don’t even think they are doing anything wrong.
‘smoking the jerk off crack’ is going in my lexicon.
article ignores the circular financing bubble. It layers on top all of the hidden costs in servicing their fake revenue and fake stock valuations.
This shit led to the Great Depression… I guess it’ll be a Greater Depression, just on figures alone.
C’mon! With Trump in charge, it has to be The Greatest Depression!
“Yes, this is The Greatest Depression. Nobody has ever seen anything like it. Even the best economists, very smart people, they say to me ‘Donald, Mr President, who could know?’ Nobody could have known this would happen, but they tell me it was caused by Biden. Or Obama. I’ve also asked the FBI to check Hillary’s emails and Hunter’s laptop.”
“They said it could never happen. It could never be done. But I did it. First one in history to trigger such a great depression. The greatest depression.”
great depression led to a ww2, is there please some chance to please not start ww3 please
Two of the three most powerful nations are involved in wars of aggression and the third is backing them up. I would say we are pretty much there already.
The US is at war and China is not. The third most powerful country would be India and afaik they are not at war right now.
Unlike ww2, ww3 would not be a boon to production or the economy
Supply chains would be the first target, like how pulling the plug on rare earth metals is the goto now, and how much can be fully and entirely made at home?
We’d be sitting around scratching our asses wishing we had any form of modern appliance before long. Planes, ships, cars, generators, terbines, computers, microchips would cease manufacture without a comprehensive functioning global supply chain
Fuel, oil, fertiliser would be cut off for most countries
Without an incredible stockpile, most countries probably couldn’t sustain any world war
WW2 was not a boon to production. Well it was for weapons, but most of Europe and good parts of Asia were destroyed with millions dead. The only country coming out of it in better shape was the US, which did not see bombing and had relatively low human losses(still horrible to be clear, but not even close to what others had).
Modern wars suck and any smart country will try to avoid them. Hence you see Russia being fucked over by the EU via Ukraine and China fucking the US via Iran. Obviously you need dumb leaders to walk into those traps into the first place.
Australia had a huge sustained boom from the late 1940s through to 1970s, which was also aided by the Korean war. The boom tapered off with the oil shocks and stagflation of the early-to-mid 1970s
The UK also had a boom, recovering from rationing into the 1950s they joined the global long boom until the 1970s but yes it was not as strong as other countries booms due to the damage and cost of the war
Harold Macmillan’s famous 1957 line “you’ve never had it so good” sums it up pretty well
Europe had a massive boom known as the golden age of capitalism, nfi what you are talking about
https://en.wikipedia.org/wiki/Post–World_War_II_economic_expansion
The United States, the Soviet Union, Australia and Western European and East Asian countries in particular experienced unusually high and sustained growth, together with full employment.
That was the time after WW2. Of cause the economy does a lot better, when you do not bomb out cities and kill millions. That could have happened earlier, without the war and everybody would have been better of.
Military spending, wealth redistribution, tax system changes and the Marshal Plan for rebuilding Europe are direct war results that caused the boom. Everything needed rebuilding and everyone wanted to work together, leading to economic agreements and the formation of the European Union. Everyone needed materials like steel for construction. The Korean War then seriously boosted countries like Japan and Australia again
Is there like a checklist for us being in world war three already?
Yeah. Revolution now. We need to fucking build a parallel internationalist power structure and just freeze out the billionaires from the economy. Fuck the UN, we make our own with black flags and snooker. It’s up to us to define what it means to be an adult.
140 + 100 + 180 + 100 + 30 does not equal 1350. Not even close. Impossible to put any kind of trust in AI slop
I’m not a finance wiz but would that mean these 5 companies are carrying around 3 trillion total debt? My bank won’t even let me owe them 20 bucks without penalties.
If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.
I mean, that quote maybe needs to be updated for inflation, but you get the idea.
