Baldur Bjarnason23h ago

This law firm memo provides a fairly detailed overview of the risks inherent in the "AI" finance bubble and it doesn't look good

https://www.quinnemanuel.com/the-firm/publications/client-alert-emerging-litigation-risks-in-financing-ai-data-centers-boom/

> The deeply interconnected AI ecosystem means that distress at any single node—a construction delay, a tenant default, unhedged energy cost differentials, a collapse in GPU resale values—can propagate across multiple counterparties and financing layers.

This is fine, right?

Client Alert: Emerging Litigation Risks in Financing AI Data Centers Boom

Quinnemanuel
Show threadBaldur Bjarnason23h ago

https://www.quinnemanuel.com/the-firm/publications/client-alert-emerging-litigation-risks-in-financing-ai-data-centers-boom/

> Data center debt has increasingly been repackaged and sold to a wider pool of investors through asset-backed securities (“ABS”) and commercial mortgage-backed securities (“CMBS”).

This has never backfired, right?

Client Alert: Emerging Litigation Risks in Financing AI Data Centers Boom

Quinnemanuel
Show threadTim Bray
@baldur Then there's the other data center debt comprising large sums that Big Tech companies have promised to pay, structured in such a way that it doesn't appear on their balance sheets. They can probably afford it even in a worst-case scenario (except maybe Oracle), but it'd mean the end of their cash fountains that have sustained a high proportion of stock-market growth.
Apr 1 at 4:10pmWeb
Show threadBaldur Bjarnason22h ago
@timbray Yeah, the memo covers that as well in a way that's more readable to a lay person like me than I expected.