The AI market works on bubble economics. It’s about stories and magic! Making financial sense, that’s for the old people now! Get with the program, granddad! But magic doesn’t happen. And it never …
  • jaykrown@lemmy.worldEnglish
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    5 days ago

    I look forward to it, the inflated hardware prices and anti-competitive practices have become insane.

    • mojofrododojo@lemmy.worldEnglish
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      5 days ago

      yep. I’m wondering - after they’re cut off from their best friends, what’s going to become of the ai delusional types? oof…

      • boonhet@lemmy.zipEnglish
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        4 days ago

        There are models now available for 1/20 of the price of GPT and Claude top end models that are much stronger than GPT and Claude were when the AI waifus started becoming a thing. Nobody’s going to be cut off from anything if the bubble deflates

        • ebu@awful.systemsEnglish
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          4 days ago

          all the services and infrastructure and apps and interfaces and hardware, and the labor to maintain and update all of the above, depend, right now, on the bubble not just persisting but continuing to inflate to infinity. so yes, everyone absolutely can and will be cut off from AI services

  • w3dd1e@lemmy.zipEnglish
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    6 days ago

    Rumors were circulating on Thursday that someone was dumping $500 million of data center loans. That turned out to be Dutch bank ING, which has put the loans up for auction

    I’m not saying there isn’t a problem with data centers but once again, this is a normal part of commercial real estate. This happens to loans of every type including fast food, Hollywood studios, malls, airports, hotels, apartments, warehouses, industrial/manufacturing, office buildings, everything.

    I am a Senior Loan Analyst who works on Commercial Mortgage Backed Securities.

    Selling loans is incredibly normal, especially for smaller and mid sized banks that can’t afford to keep them on the books long term but it’s also very common for large banks.

    • Architeuthis@awful.systemsEnglish
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      5 days ago

      Presumably you still need to believe that these are the specific loans that you are least likely to see a return on though, otherwise why get rid of them?

      The way the bubble pops will probably be a bunch of normal things happening, except cumulatively they cause investors to shy away from further bankrolling this mess and someone important won’t have enough money at some crucial point. It certainly won’t be sam altman laughing maniacally and dissolving into a mound of scurrying cockroaches.

      • w3dd1e@lemmy.zipEnglish
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        5 days ago

        To be fair, I don’t work with this specific bank so I can’t say their reasoning but I will say banks that originate a loan don’t really keep it in their books.

        Also, commercial real estate frequently gets sold off and bundled into portfolios. These portfolios have a mixture of asset types. Investors buy percentage of the return from those portfolios.

        The idea is that if one asset or asset type fails, it doesn’t tank the whole investment. It’s a safer way to invest. Many retirement accounts have similar investments for that exact reason.

      • BlaestEgnen@feddit.dkEnglish
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        5 days ago

        otherwise why get rid of them?

        It’s a Dutch bank, the Dutch pension scheme is in the process of moving from a benefits defined pension scheme (payment known upfront) to a contribution based pension scheme (payment being based on returns). Hence their pension funds have primarily held bonds, that’s changing as historical returns on stonks have been higher.

        Whether ING has any pension related holdings, no clue. But that right here could very well be the reason. It’s also the single biggest factor for why the bond rates are rising globally. It’s estimated to impact about 3TN € worth of capital on the European bonds market, once the transition is in full effect next year

        • Architeuthis@awful.systemsEnglish
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          5 days ago

          That’s interesting, thanks! Not exactly sure where the dc loans fit in the benefits vs contributions scheme, but I guess it’s important context to keep in mind if reading further into this.

          • BlaestEgnen@feddit.dkEnglish
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            5 days ago

            The primary difference between a bond and a loan, are the installments. A loan will gradually be paid off, whilst a bond will pay interest yearly and then one installment upon expiration.

            So from a return perspective, they’re both having a fixed return and therfore fits defined contribution schemes nicely. As they can sort of guarantee they’ll have the money they’ve promised the pension holder 10 or 30 years down the line

        • pmk@piefed.caEnglish
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          5 days ago

          Could be many things, I wonder if the big insitutions want to avoid circuit breakers, while also doing a bit of short squeezing on everyone betting on the market going down further. A crash can play out over weeks. Or it’s retail becoming exit liquidity, or dead cat bounce, or… or maybe this isn’t the bubble pop we’ve been waiting for and I’m just projecting my hopes of big tech crashing into the numbers.

  • lurker@awful.systemsEnglish
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    6 days ago

    At the Financial Times Future of AI Summit, the AI vendors were shocked that nobody likes them. They don’t really understand the objections — one CEO compared data center protestors to protests against masks for COVID.

    Utterly ridiculous people who are now getting the wake up to reality they deserve