Mastodawn

RE: https://mastodon.online/@mastodonmigration/116701458400797917

Totally get it, finance is boring and annoying to think about, but sometimes we are faced with economic conditions that require us to pay some attention.

In 2008 'credit default swaps' became household conversation as people watched their savings vanish.

Unfortunately we may all soon be talking about the AI 'CapEx trap', so maybe get a cup of coffee and take a few minutes this weekend to check out this short explainer.

#CapExTrap

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Mastodon Migration 13h ago

AI Capex Trap (cont)

The hyperscalers (Microsoft, Amazon, Google, Meta, and now SpaceX) are NOT funding the AI boom with their own money. They are using all sorts of fancy credit tricks (loans, REITs and even muni bonds) called special purpose vehicles (SPVs). Basically, 20 to 30 year long term debt.

-more-

#CapExTrap

2k115 21h ago

Milano Finanza confirms the crash: while Google drains $85B and Meta hunts for creative funds due to the Capex Trap, NY T attacks Big Tech for "plundering journalism". Publishers are pulling their parachutes after the impact to save cash. #NYT #BigTech #CapexTrap #Finance

2k115 22h ago

First Google drains $85B, now Meta is hunting for "creative" funding to survive the AI cash burn. This is the Capex Trap in plain sight: Big Tech is running out of money just to pay the "Digital Toll" for hardware. The liquidity crunch is here. #Meta #Google #CapexTrap #Finance