This is how all capital-intensive utilities operate. The marginal cost of using a little more power or tokens is easy to justify because you can at any point stop using more.

But the cost to add more power capacity is huge and highly variable. Just because oil is expensive today doesn’t mean the capex to pump more is justified.

Really what AI needs is large customers that will commit to large spend over the next 5-10 years. Without this AI companies are basically offering duration arbitrage of electricity. Not a good place to be; the finances will always look bad.

Unfortunately, the amount of capital required by the entire AI industry is enough that counterparty risk is now a concern.

Usually the markets react to a supply imbalance by increasing prices which destroys demand. For some reason token prices from the major players have instead been reduced.

That is precisely what price subsidies look like. These companies are hiding the the true cost of offering these models.

> No one will lend people money to build it

The money is there but not at the risk levels these companies have pushed things to. They're spending billions like it's candy, and treating millions like change they found in their couch cushions.

Financial systems are usually in the hands of people that have some risk management. When these labs say things like this will change everything, there's no way to know how to evaluate any of this.

Trillions have been lent. What you're saying is like eating 55 burgers, 55 pizzas, 55 tater tots and then complaining that the fridge is empty and nobody will give you more food.