Why Wall Street is ignoring big tech's debt [video]

I don't know a single white collar worker who isn't using AI for their job. Not like forced, but like "Oh damn, this bot thing can do a lot of tedious leg work for me".

To think that people won't pay $60-$80/mo to continue using it is wild to me. In a white collar environment it pays for itself in a few hours of use.

If you focus on how much value AI brings to people (mostly in time saved), the bubble hardly looks bubbly.

Did Uber die when a trip across town went from $3 to $13? No. It's giving more rides than ever, 10x more than when it was $3.

I'm sure there will be some losers, but unlike the dot-com boom, the entirety of the population already has all the tools needed to leverage AI.

to modify sinclair: it is difficult to get a man to understand something, when his bonus depends on his not understanding it

Is Sam Altman even allowed to rent a car with his level of debt?

The creativity of the financial industry is quite insane. Combined with the scale-at-all-cost strategy in AI companies, this is a ticking time bomb, no doubt.

I think it is easy to forget that a revolutionary technology does not automatically make a viable business model. I think we are yet to see the real winners in this game.

It might be more accurate to say that many retail investors are ignoring big tech’s debt.

Wall Street makes money from issuing debt, trading debt, and IPOs. They need to get the last two mega IPOs off before the curtain call on this era.

But they can only partially influence the market, they can’t control it. The question is if the market will let them get these IPOs off or if the jig is up.

Here’s an exercise for anyone curious: pull up the median stock in the S&P 500. Look at its P/E. Take 15 minutes and look through the company’s financials and figure out what you think about the quality of its earnings.

Then decide if that P/E is appropriate.

The bubble isn’t in just AI, the bubble is everywhere, and AI is its largest manifestation.

There's a kind of inconsistency in that he ends the video talking about overpriced stocks and how it's hard to short them but the title is about the $1.75tn in debt which seems to mostly be from professional investors, apparently:

>JPMorgan Chase and Morgan Stanley, private equity and credit giants like Blue Owl Capital, BlackRock, and PIMCO, alongside international commercial banks

who probably know what they are doing and read the footnotes.

My guess is that the lending is actually ok because there's a lot of real demand for compute. $1.75 tn is about 1.4% of global GDP which doesn't seem that silly in the AI boom.

TINA, There Is No Alternative

As long as the money printer is running...all Quiet on the Western Front

The papers mentioned:

1. — "The Big Market Delusion: Valuation and Investment Implications" - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3501688

The paper behind the "big market delusion" he discusses.

2. - "Do Stock Prices Fully Reflect Information in Accruals and Cash Flows About Future Earnings?" - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2598

This is the "accrual anomaly" paper Boyle describes.

3. - "The ‘Incomplete Revelation Hypothesis’ and Financial Reporting" - https://publications.aaahq.org/accounting-horizons/article/1...

Paper explains why information can be public yet still not be fully incorporated into prices when extracting it takes effort.

4. - "Limited Arbitrage in Equity Markets" - https://www.hbs.edu/ris/Publication%20Files/Limited%20Arbitr...

Mitchell and Pulvino work on the "limits of arbitrage."

5. "How Pervasive Is Corporate Fraud?" - https://www.chicagobooth.edu/research/rustandy/social-impact...

The paper on about one-third of corporate fraud is detected

6. "There’s never been a better time to commit financial fraud" - https://www.economist.com/business/2026/07/29/theres-never-b...

7. "Firm Data on AI" - https://www.nber.org/system/files/working_papers/w34836/w348...

The Bank of England study on executive AI usage and productivity.

We now have several voices saying the same:

"Aswath Damodaran: Big Tech Has No Idea How AI Pays Off" - https://news.ycombinator.com/item?id=49229981

Capitalism works with debt for growth. Strange HN doesn't understand this

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Is this an AI generated video? The guy didn't blink an eye or moved the head more than one inch in 30 minutes!