Comment by dragontamer
6 hours ago
I thought Ed Zitrons argument was just corroborated by Nikkei last Friday with the new report that 1.6 Trillion in SPVs accounts for off-books debt, on top of the $1.4 Trillion of on-books debt that's in these AI companies?
The main argument of Ed Zitron is just that. Huge huge amounts of debt that's due "soonish". Every SPV is different but we are fast approaching the point where this all starts to become real.
Now I dunno why Ed Zitron feels the need to write 10,000++++ word articles that only says "more leverage than people expect", but that's really the crux of things.
If that's all Zitron wrote, I don't think he'd be as polarizing (or as dunked on). But he goes way, way past that.
It all comes down to the fact that Zitron thinks these AI companies are over levered and have significant chances of collapsing industry wide.
Yeah he uses more words to say it and bad arguments as part of it. But so did Galileo's "The tides prove that the Earth is moving around the sun" argument. Some arguments are bad, even if the overall point was correct.
I think given the new Nikkei report from last week, we are seeing more and more of Ed Zitrons arguments bear fruit, after years (literally) of him calling wolf.
It all is crazy talk until real numbers come out and prove him correct. But it seems to take a long time for those numbers to materialize.
He doesn't like or believe in the economics of the frontier labs and then works backwards from that, which takes him to some very strange places.
I don't understand how that affects what he has written here? How does his data not make sense?