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n. Illinois | Add in the fact that almost of this money is borrowed and the AI companies are tying themselves into knots keeping the liabilities off of their balance sheets. The reported incomes we are seeing are suspect too. take Anthropic which is wanting to do their IPO, in their financial filings they reported a loss of $80 billion and every WSJ analyst is jumping backwards telling you that was not an operating losses it was an accounting entry caused by mark to market accounting and you should just ignore it. But guess what that $80 billion is a profit on others financial statements and those same WSJ analysts say look how great Amazon is doing where in reality the majority of their reported earnings is their cut of the $80 billion that we were just told to ignore.
Or how about this NIVIDA is the darling of the AI world right now and they look like they are just printing money but to sell their chips they have to sign deals guaranteeing the debt that the company they sold the chips too took on otherwise the lender wasn't going to loan it to the company. So they book the profit and hide the liability in note #400 buried deep in their financials with statements like we don't think this is a material issue blah blah blah.
Do yourself a huge favor read up on the financial collapse of the railroads in the 1870's. They built all of the rails and rolling stock using borrowed funds and then they found out that they to cut freight rates to compete with each other and their cash flow dried up and they couldn't service the debt sound familiar?? The collapse put the country into a decade long financial recession, (this was before the Fed so there was no printing of faux money to bail the lenders out)
The amount of power these data centers consume dwarfs our current capacities to generate it and deliver it to where they are locating Those windmills and solar panels aren't going to cut it.
It takes full time 24/7 365 days a year load generation things like coal powered gas powered or Nuclear powered plants and the distribution lines to deliver they power that don't exist right now and are not overnight projects themselves. | |
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This is why there is a tech sell off.
