Comment by bandrami
10 hours ago
Though not all of that capex is cash; there's a whole phantom wampum AI economy where the big players are trading promissory notes for compute that doesn't exist yet (and may never exist) some time in the future and booking it as revenue.
Maybe you're thinking of AWS/Azure/Oracle? Meta isn't selling their compute.
Meta plays that game too; they're on the hook to buy compute that CoreWeave has yet to build (and may never be able to build) which counts as "revenue" for CoreWeave and an "asset" for Meta even though no actual money or compute has changed hands.
Meta promised to buy dc capacity for ai workloads. If I remember it correctly, it created a common company with an investment fund as well that took on debt to build capacity.
You calculate the cutoffs as savings for this years while imagining that the future payments are payments only for this year. At the same time the commitments are for 5-20 years ahead and the laid off people would be off the payroll for the same multiple years ahead.
These games are far more dangerous to the industry than "AI now = badcode future".
They're a suicidal bet, because they assume cloud LLMs are efficient and inevitable.
Neither of those is true, or even likely, and we're going to see the consequences by the end of the decade.