Have We Been Partying Like It’s 1999?
So when I look at this entire landscape, it seems to me that some of the basic conditions of a financial crisis are at least starting to fall into place:
We have a big story about why “this time is different” — the idea that AI will change everything, and that data centers will thus earn huge returns.
We have a large and increasing amount of debt
Noah Smith • Will Data Centers Crash the Economy?
The duality in markets these past three years is nuts. You have the tech bulls and the gold bugs in the lead. The former are USD believers who think AI is heading toward the singularity. The latter think that the US empire is collapsing and AI is a giant bubble. 🌶️ https://t.co/FD6PqDcxCT
A critical analysis of the AI industry's financial instability, arguing it's a bubble built on NVIDIA's GPU sales, not profitable products.
TRANSCRIPT
This isn't me being polemical or hysterical, by the way. This is quite literally what's happening and how CoreWeave operates. If you aren't alarmed by that, I'm not sure what to tell you.
Oracle is buying $40 billion in GPUs for the still-unformed Stargate data center project, and Meta is building a Manhattan-sized data center to fill with NVIDIA
... See moreLastly, prior bubbles didn’t have the most profitable companies that humanity has ever created investing in them. They were debt financed instead. AI is not debt financed yet.