Big Tech hides $1.65 trillion in AI debt off its balance sheets - more than its total reported debt - using legal structures regulators still allow.
  • mossberg590@lemmy.worldEnglish
    2 hours

    tldr; They used “special-purpose vehicle” to hide the debt. Accounting’s version of “anal doesn’t count, silly”.

  • humanspiral@lemmy.caEnglish
    3 hours

    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.

  • Lydon_Feen@lemmy.worldEnglish
    8 hours

    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”.

  • jaykrown@lemmy.worldEnglish
    10 hours

    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.

      • mirshafie@europe.pubEnglish
        5 hours

        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.

        • Lichtblitz@discuss.tchncs.deEnglish
          2 hours

          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.

  • TankovayaDiviziya@lemmy.worldEnglish
    10 hours

    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.

  • jballs@sh.itjust.worksEnglish
    13 hours

    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!

  • ZILtoid1991@lemmy.worldEnglish
    9 hours

    We could have avoided it if politicians didn’t fell for big tech’s tricks…

    • aceshigh@lemmy.worldEnglish
      1 hour

      Politicians didn’t fall for anything. They’re getting kickbacks and are voting accordingly.

  • [object Object]@lemmy.caEnglish
    14 hours

    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

  • iocase@lemmy.zipEnglish
    19 hours

    Oh boy I can’t wait to see the future of every person under 65 and with a net worth below $100 million get basically vaporized from space. I can’t wait to be the bailout source for this… Although I don’t think there’s enough money in existence to bail this one out.

    • DarkCloud@lemmy.worldEnglish
      18 hours

      Don’t even talk about bailouts, it’s totally unacceptable this time. These companies ARE NOT essential, and are not too big to fail.

      Their debts are by Venture Capitalist investors, and by billionaires from the dot com bom. They have the money to fail.

      This time we let them fail.

      I WANT TO SEE REPO MEN AND BANK OFFICIALS MARCHING INTO MANSIONS TO RECLAIM THE MONEY.

      Let some of these assholes live in trailer parks.

      • Folstar@lemmus.orgEnglish
        10 hours

        The current administration is claiming AI is absolutely essential to our national security, scientific research, energy, and everything else. This is all being done by political appointees who know next to nothing in general, and even less about the history and current state of “AI”. Being ordered by people who do not care about wasting taxypayer money or running up absurd deficits. Bailout incoming.

      • Asafum@lemmy.worldEnglish
        18 hours

        The issue is that they became part of everyone’s 401k so the bootlickers and greedy fucks in Congress will tell us they’re 100% essential because if they fail you lose your retirement.

        I hate this system… Redistribution of wealth for the rich, rugged individualism for the pleb.

        • moustachio@lemmy.worldEnglish
          18 hours

          They aren’t even public companies yet. They are not a part of everyone’s 401ks.

          MS, AMZN, Oracle, & NVDA were around before this, and will exist even when the bubble pops. Literally zero reason for a bailout.

            • DarkCloud@lemmy.worldEnglish
              18 hours

              I hope Larry Ellison has to sell off his media companies and still has a heart attack in the end. He funds Israel.

              • 4am@lemmy.zipEnglish
                14 hours

                Larry Ellison is an even bigger son of a bitch than your standard Israel funder.

                Not just content with supporting a genocide, he wants to control all media and human behavior.

                Not even to protect his collaborators, but because there’s money in it.

                Larry Ellison belongs in prison.

                • mertn@lemmy.worldEnglish
                  3 hours

                  He can take his shitty closed source database with him.

            • cecilkorik@piefed.caEnglish
              16 hours

              So you’re telling me AI is going to bring positive change to the world?!

            • moustachio@lemmy.worldEnglish
              17 hours

              Okay? That still doesn’t mean they should receive a cent of bailout money. They’ve been declining for a while and that’s not the U.S. Taxpayer’s problem.

              • Jaysyn@lemmy.worldEnglish
                3 hours

                I never said a thing about bailouts. No one is baling these assholes out. They don’t employee enough people to be important enough in the grand scheme of things to be afforded a bailout. Also, there isn’t enough money to bail them out, because they will never be profitable and they know that. That’s why they are angling to steal our retirement.

        • architect@thelemmy.clubEnglish
          16 hours

          The current retirement structure is gambling and exploiting labor. I’m sorry but it’s the only way to fix it. The people who bought into it need to suffer, too.

      • Lost_My_Mind@lemmy.worldEnglish
        17 hours

        Wait…too big to fail meant that they’re supposed to be important to the CITIZENS??? Fuck that! All these banks and mortgage lenders and automotive industry leaders have all been bailed out as too big to fail.

        I never took that to mean that they provide value. I just took it to mean “fuck you peasants, we’re big business, and therefore fuck you! Money please! Money me now!”

        If I’d have known they meant it was for OUR benefit, I’d have called bullshit 20 years ago.

      • iocase@lemmy.zipEnglish
        11 hours

        I totally agree with you and I think this time there really isn’t a way to bail out AI companies or every other company that’s too big to fail during the poly crisis. No matter what irresponsible shit the elites get up to fundamentally we’re the ones that get fucked though even if they can’t extract enough blood from us to nationalize the losses.

    • zurohki@aussie.zoneEnglish
      14 hours

      They’re such money pits that they can’t be bailed out - give them a hundred billion dollars and they’ll be back next month for more.

      They aren’t a functioning business that just needs help getting back to profitability or help with some sort term crisis, they take hundreds of billions and set it on fire.

    • UnderpantsWeevil@lemmy.worldEnglish
      19 hours

      with a net worth below $100 million

      Far fewer than you’d think, once hyperinflation kicks in.

      You’ll be lucky if you can buy gum for less than $100M at the rate we’re climbing.

      • EvergreenGuru@lemmy.worldEnglish
        18 hours

        I am selling a used piece of gum for cheap: only $50 million! Buy now while supplies last.

        • Lost_My_Mind@lemmy.worldEnglish
          17 hours

          Well now hang on. Lets not get ahead of ourselves here. We have discuss some core primary facts about this gum before we can determine value.

          First off, what brand gum? How much flavor is left? Does it still have enough consistant texture to blow bubbles? You can’t just leave these things up in the air.

          • Pistachio@lemmy.zipEnglish
            14 hours

            Seattle is gunna have a booming economy of prospectors scavenging the gum wall

          • No1@aussie.zoneEnglish
            17 hours

            Don’t worry about that.

            I’ll lend you the $50M for the gum if you agree to buy $50M of my stuff in the future.

    • Rioting Pacifist@lemmy.worldEnglish
      18 hours

      It’s fine SpaceX is pretending to be an AI company (the home of MechaHitler) so won’t have the pennies left to gets it’s space Vaporizing Centers launched (honestly more feasible than data centers).

      🤞maybe this can all end with Saudis releasing footage of Elon moonwalking when the realize there’s no money left for the line due to Twitter.

  • heartSagan5@lemmy.zipEnglish
    17 hours

    This shit led to the Great Depression… I guess it’ll be a Greater Depression, just on figures alone.

    • No1@aussie.zoneEnglish
      17 hours

      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.”

      • CeeBee_Eh@lemmy.worldEnglish
        16 hours

        “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.”

    • sanitation@lemmy.todayEnglish
      17 hours

      great depression led to a ww2, is there please some chance to please not start ww3 please

      • Doomsider@lemmy.worldEnglish
        7 hours

        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.

        • MrMakabar@slrpnk.netEnglish
          6 hours

          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.

      • ryannathans@aussie.zoneEnglish
        14 hours

        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

        • MrMakabar@slrpnk.netEnglish
          6 hours

          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.

          • ryannathans@aussie.zoneEnglish
            6 hours

            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.

            • MrMakabar@slrpnk.netEnglish
              6 hours

              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.

              • ryannathans@aussie.zoneEnglish
                2 hours

                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

      • mirshafie@europe.pubEnglish
        17 hours

        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.

  • Jaysyn@lemmy.worldEnglish
    18 hours

    This is why they want to get into your 401(k)s & pension funds. Don’t let them.

      • YellowParenti@lemmy.wtfEnglish
        17 hours

        I’m clutching my 10k tightly. They won’t be getting my future 2 weeks of groceries!

  • diocesegoldmine@sh.itjust.worksEnglish
    19 hours

    I genuinely am having a hard time believing this because the image looks like it was generated… The kind of reality the .01% has shoved us into.

  • nao@sh.itjust.worksEnglish
    19 hours

    Would be interesting to include anthropic, openai etc in this list

    • Albbi@piefed.caEnglish
      16 hours

      They’re not public and aren’t forced to report these numbers. But yeah the amount of hidden debt in AI is much higher.