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.
@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.
Gabriele Svelto
Drew 🐘