And do these not all have established business models that are ridiculously profitable, and huge cash reserves?
How the heck are THEY vulnerable, and the "bare" frontier labs like Anthropic and OpenAI with no preexisting business models or profits, but equally ridiculous borrowing are supposedly not?
No, by Hyperscalers (HS) I was referring to the pure-play companies doing the massive build outs of mega-scale data center farms for FAANG and frontier labs (FL). FL / FAANG own some of their own mega-scale data centers but they don't want their business to become too invested in real-estate and GPU depreciation. While it might lower costs to invest BIG capital in vertical integration (owning the whole value chain), the margins in that part of chain are too low to support FAANG stock prices.
So they are using a mix. Some of their own but mostly leveraging OPM (other people's money) through Hyperscalers for pure-play AI. FAANG view data centers necessary for their own core product needs (like AWS or Google Search / Gemini) in a different financial bucket than pure play AI scaling. The fact they are able to resell their excess DC capacity for pure AI to OAI/Ant so profitably right now is an opportunistic windfall, not a long-term plan. In fact, it's actually off-plan in a sense because their financial plan was not to invest tons of capital to sell AI compute on "margin-plus". It's just that the "margin-plus" margin is incredibly frothy right now. Their strategists don't think that will still be true in five+ years.
That's why their long-term mode is leaning to doing a mix and largely relying of external Hyperscalers for non-core AI capacity. Their strategy is generally, "Own our own AI compute for minimal baseline needs for our branded products (we sell to the final end-user)." Then they want to use Hyperscalers for non-core and excess capacity because HS are borrowing billions on debt markets using FAANG contracts to secure those loans. I explain why and how we can be in both 'rapid growth' and 'increasing bubble danger' at the same time in more detail in my sister comment: https://news.ycombinator.com/item?id=50430395.
Google, Meta, Amazon, MS have huge cash-producing businesses they can just fall back on. Of course the stocks will get hammered in the short term, but they are still sitting on cash volcanos.
Pure AI plays are what are most at risk. In the bad case, all the CoreWeave type companies have their assets acquired on the cheap by the existing big players. In the armageddon case, companies like Anthropic and OpenAI also end up in the discount bin.
Hyperscalers are FAANG.