they seem to think that debt markets are infinite. "There's Still Plenty Of Capital To Raise"
> The ones that have issued public debt, like Alphabet and Meta, have excellent bond ratings. If they need more capital, they won't struggle to find people to give them a loan.
Yes, and that bond rating is based on the idea that they really don't have that much debt, and have a net profit of something like 30%. If they hoover up a load of debt, the rating will plunge.
> I don't think the rhetoric about the AI bubble is really about finances
Its exactly about finances. The market participants that are not bollocks deep in fake Private Equity valuations are worried about circular debt obligations that are off books. The SEC has been rather lenient about reporting of non-traditional obligations (hence why spaceX was allow to do what ever the fuck it did)
For example anthropic has about 450 billion in non-cancellable obligations. the S-1 puts it at 895 billion. all of that is someone's debt.
If openAI are doing the same thing, thats pretty close to 1.6trillion in debt, both for the same customers, at the time when customers are going "hmm this isn't giving us what we hoped for the price"
It could be that a slowing of data centre build (and hence a slowing in the finance needed) takes the heat out of the situation avoiding a dramatic burst. Even then there will be casualties. If someone knows who and when ... they could do very well. More likely, Microsoft and Google will buy up anything distressed that's worth having.