Subprime AI Crisis

  • The venture capitalists that are ultra-rich on paper, heavily leveraging their firms in companies like Harvey (worth '$11 billion') and Cursor (worth '$29.3 billion') that burn hundreds of millions or billions of dollars and are now both too large to sell to another company and too shitty a company to take public.
  • The AI data center companies that, thanks to readily-available debt, have started 200GW of projects (and only started building 5GW of them) for AI demand that doesn’t exist, entirely based on the theoretical sense that maybe it will in the future.
  • Oracle, who is building hundreds of billions of dollars of data centers for OpenAI (which needs infinite resources to be able to pay its compute costs), is taking on equally-large amounts of debt, all because it assumes that nothing bad will ever happen.
"All of these entities are acting based on a misplaced belief that the world will cater to them, and that nothing will ever change. 

"While there might be different levels of cynicism —people that know there’re subsidies but assume they’ll be fine once they arrive, or people like Sam Altman that are already rich and don’t give a shit —I think everybody in the AI industry has deluded themselves into believing they have the mandate of Heaven."


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