> If they haven't saved any money, and can't bail themselves out, they deserve bankruptcy

Agree.

What we need is a revocation of the Exchange Stabilisation Fund [1] as well as hard limits on the Defense Production Act’s Title III [2] and whatever the fuck in the CHIPS Act let the President unilaterally invest taxpayer funds in Intel.

This announcement of a non-binding resolution does none of that. It’s pure puffery.

And in case anyone thinks this is hateful or harsh, remember: bankruptcy doesn’t mean we space laser these companies. Shareholders get wiped. Creditors take over. Services probably keep getting rendered, GPUs probably keep running.

[1] https://en.wikipedia.org/wiki/Exchange_Stabilization_Fund

[2] https://www.govinfo.gov/content/pkg/COMPS-8323/pdf/COMPS-832...

Need to update the aphorism:

If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem. If you owe the bank $100 billion, that's country's problem.

AMEN AMEN AMEN! This doesn't mean ai goes bust, this actually would force innovation even more. AI isn't going anywhere anytime soon. We have the CEO of OpenAI claiming that models running on consumer hardware is a waste of resources and encouraging that it should stay in big data centers that are extremely wasteful when it comes to resources. Most consumers couldn't afford to waste away their resources to run consumer models. I love technology. I have a deep-seated level of resentment of the difference in treatment these big corporations get vs the people.

Edit: Taking bailouts off the table forces discipline, it strips away the bloat and forces real efficiency.

Can you privatize the losses if the banks are investing, providing debt to and repackaging that debt into broader instruments?

I worry that one of the reasons that Anthropic has 500 billion in commitments and everyone is running to the credit markets is to make it so that if they fail everyone suffers.

> "they deserve bankruptcy"

Chapter 7, please! I would like them to *liquidate* Smaug's GPU hoard; and I would like them to do that all at once, in a swift and efficient fire sale.

The real issue is that the silent majority/public is often holding the bad debt, these data centers are financed through contracts which are rated much higher than what they are worth and often sold to diverse holders (e.g pension funds) Look at what happened in 2008, bad debt was repackaged and sold as good debt and we entered too big to fail situations. I think something similar could be going on here.

I might agree with what you have to say, but I do not think anyone should be declaring their own opinion to be that of the majority.

I have seen this used abusively too many times.

The moral majority is neither.

If your opinion is the majority opinion you do not need to say so.

> sitting on piles of assets like dragons

They (the AI companies) are sitting on piles all right, but not "assets like dragons". Rather, what they are sitting on is piles and piles of debt that eventually will come due to be paid back. The "bet" their CEO's are making is that some "profit angle" will materialize at some point that provides the funds to pay back that debt when the bills start coming due.

> If they haven't saved any money

They have not "saved any money" (not in the sense of a "saving account" in a bank). They are leveraged as far into the future as one can see, and betting that before that lever starts to move they will have a revenue stream sufficient to pay it back.

> sitting on piles of assets like dragons

Dragons are famous for sitting on gold.

Today, approximately 7%–12% of gold is used for micro-plating connectors, contact pins, and circuitry in smartphones, computers, and GPS devices.

> 1. Total AWS Gold: 10,000,000 servers multiplied by 1.875 grams equals 18,750,000 grams (18,750 kg).

> 2. Bezos's Share: 18,750 kg multiplied by an 8.5% ownership stake equals 1,593.75 kg

they deserve bankruptcy.

Indeed they may, but they will be taking a lot of people's 401k's with them. Does anyone here have a 401k and have they analyzed the portfolio to verify none of the assets are related to the AI companies? In some cases it will not be obvious.

If one owns a standard cap-weighted S&P 500 index fund or a default target-date fund in their 401k then about 30% to 40% of every dollar contributed goes directly to the dominant tech giants driving AI.

I am not a financial expert and this is not financial advice.

> sitting on piles of assets like dragons.

Surely this isn’t pure coincidence!?

Jeff, the Origin https://imgur.com/gallery/jeff-origin-lp9Q2tC

They should use that super intelligence to get themselves outa debt - ya know pull a Thanos.

Let's keep in mind that many hedge, pension and retirement funds have investments in these big companies. In short, the potential losses are already socialized.

The people who want to nationalize the losses are the ones who pay the politicians. My market strategy is to assume a bailout.

I doubt bailout was originally introduced to help the companies. I think the point is rather that not bailing out has worse outcomes and higher costs for the general population than wasting public money. Of course the companies need then still to stop doing their harmful operations, otherwise you need to bail them out again and then the costs of bailing them out will eventually become higher.

The issue is that this gives perverse incentives for companies, unless you also have proper regulation, which you should have anyway. The issue is that you don't.

But in this case I agree with you, because in addition to the costs, there are also huge benefits for the general population to letting these companies fail. Both in actual behaviour and power right now, but also as a future incentive for all other companies.

The "silent majority" doesn't exist if it doesn't vote. Democracy isn't Halloween, ghosts don't exist.

This. Glad we are saying this upfront. You made this mess, talk to your shareholders about the bailout.

I was pretty vocal here about covering losses for depositors at Silicon Valley Bank because they were mostly small businesses who have more important things to do than manage the risk of their bank deposits.

I won't make a similar argument here because about an AI bailout because the counterparties know the risks, but there are pensions with requirements to hold high-grade debt buying these bonds. An AI bubble burst doesn't just show up in the Nasdaq, it hits pensions.

Silent majority owns majority of shares in these companies, via 401Ks,etc

thanks but you don't speak for anyone except yourself. Signed, the Silent Majority

we all know it's lip service anyway

Sorry to pop your "bubble bubble" but Anthropic already showed they are running a profit, in their recent IPO filing.

The crazy thing is that government funded a lot of this hyper growth for these AI companies. Very similar to Boeing / McDonnel Douglas.

We can and should be the very very loud majority.

But then USA loses to China, Communism will take over, moisturizer shortages etc. Signed, the noisy majority

> Signed, the Silent Majority

I hate this phrase. It's simultaneously self-aggrandizing and dishonest.

If you're silent, you're literally indistinguishable from any silent fringe minority. You have no assurance you even hold a majority opinion!

And besides, if you were a majority, the solution is easy: stop being silent.

I agree with you that we should privatize the losses; I'm just not going to make (and dishonestly push) the idea that what I believe is somehow a majority opinion.

China? Is that you?

Sure, but they have a lot of money to buy me votes and new cars and stuff.

- your elected representatives

[dead]

> Privatize the losses

Isn't that what the IPOs are for?

Nobody who has ever run a business or knows about how a business runs would think that any business "sits on piles of assets like dragons." Very little cash sits idle, usually for anticipated operational expenditures with a reserve for unanticipated expenditures; the rest is invested, loaned, spent on building the business, or returned to investors. If OpenAI is holding $25 billion in cash, it's because they anticipate spending that much in the near future, not because they're sleeping atop it in a mountain cave.