Gabriele Svelto
I find it mildly silly that some people in tech are still talking about whether "artificial intelligence" tools work or not. For their cost it would be irrelevant even if they worked. Did you actually look at the numbers of the companies involved? Oracle has now a >4 debt/equity ratio, CoreWeave has almost 9. Values above 2 are considered abnormal and dangerous. This is the financial equivalent of smoking in a factory that produces explosives.
Mar 3 at 9:29amWeb
Show threadmbpazMar 3

@gabrielesvelto "oh you cannot understand it doesn't matter because blah blah paradigm change blah blah"

My only question is if they will find some way to get a bailout from public treasuries when things implode.

Show threadGabriele SveltoMar 3
@mbpaz I think we're already way past a public bailout, even in the unlikely case it would be politically possible. Oracle alone has something like 100 billion $ in debt. God knows how much would be needed to bail out the whole sector given that all the companies involved are deep in the red (if they're new) or destroying the margins of their healthy businesses (if they're old).
Show thread{ id: d2718, ok: 🇵🇸🌈🏳️‍⚧️🇺🇦 }Mar 3

@gabrielesvelto @mbpaz

> think we're already way past a public bailout

I think you underestimate the pervasiveness of corruption in the US, but I appreciate your optimism!

Show threadGabriele SveltoMar 3
@d2718 @mbpaz I simply think there's not enough money available, plus bailouts usually involve putting the business back on its feet, but these companies cannot stand, the market isn't there for them to survive, not now, not ever
Show threadIan.BurnetteMar 3
@gabrielesvelto I raised this concern at work and was told "well then it's better to use it now and go fast and then if the tools get more expensive we can reassess then"
Show threadIan.BurnetteMar 3

@gabrielesvelto to be fair, this plan is somewhat valid. We've avoided putting AI in workflows/pipelines, so it's not mission critical.

It would just cause a ton of short term pain

Show threadGabriele SveltoMar 3
@ianburnette as an anecdote I've already heard from a person who started using these tools professionally some 12 months ago, started depending on them and has now had a 10x price increase sprung on them. That's too much for them to afford but they also cannot easily untangle their business because of the dependency. Rock meet hard place.
Show threadDrew 🐘Mar 3
@gabrielesvelto If it was one company I wouldn't care if their debt/equity ratio was 10 so long as their basic debt ratio was ~even. The problem is that all of these companies are taking on this debt with the assurance that the datacenters they are building are valuable assets that can be sold during a crunch. However the most likely crunch will be sector wide and there aren't enough other datacenter landlords to buy them up. So we have to assume the real debt ratios are higher than reported.
Show threadDrew 🐘Mar 3
@gabrielesvelto In related news, it is a fantastic time to be preparing a business plan for a company that needs a datacenter and/or GPU compute because they will be cheap in 2-10 years.
Show threadGabriele SveltoMar 3
@dvogel true. In the case of CoreWeave part of the collateral for their loans aren't even the datacenters, but the remaining crypto from the days of their previous grift
Show threadMark DominusMar 5
@gabrielesvelto @shapr If the only useful result of this new technology is to destroy Oracle, I won't complain!