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AI bubble burst this week? OpenAI under significant stress
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/yawns/
Will ya look up history of "too big to fail" for me?
"Too big to fail" (TBTF) is a theory in banking and finance that asserts that certain corporations, particularly financial institutions, are so large and so interconnected with an economy that their failure would be disastrous to the greater economic system, and therefore should be supported by government when they face potential failure.[1] The colloquial term "too big to fail" was popularized by U.S. congressman Stewart McKinney in a 1984 Congressional hearing, discussing the Federal Deposit Insurance Corporation's intervention with Continental Illinois.[2] The term had previously been used occasionally in the press,[3] and similar thinking had motivated earlier bank bailouts.
So exactly what I said. They might get bailouts to avoid failure.
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Refer to my comment here from some time ago:
I am aware of this possibility and its likelihood, but even so, it will be bad. Not all of the companies are too big to fail. Just the big ones like OpenAI and Anthropic.
True. Many smaller companies will go bankrupt.
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Ooooohhh sounds like fun, need to set aside some cash for the firesale of hard drives and gpus soon to flood ebay lol
They will be thrown in the wood chipper, i have only seen old gpus being sold second hand from china
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They will be thrown in the wood chipper, i have only seen old gpus being sold second hand from china
Yah they could if they feel its better to destroy then let consumers run local models on them.
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OpenAI is out of cash. It wanted to raise $30B last week but only $11b showed up. It's now begging for an additional $9b (down from original request of $19b more) from plebs, but no one has committed anything. They want to raise money at a $1.25T valuation, while ANThropic is struggling to clear a $1.3T valuation for its IPO, and ANT is arguably worth double whatever OpenAI is worth, or more precisely OpenAI is half of ANT.
OpenAI is likely this week to lock in that $11b in commitments to prevent "cold feet clauses", and then add incentives for the other cash it needs. Coreweave is another company that needs cash now, with no good options to raise any of it.
The AI circular financing bubble has OpenAI at the center. Instead of pretending it is worth $1T, all of the promises OpenAI has made have bankruptcy triggering clauses by the promise receivers, and under bankruptcy, selling off assets is worth less than $10b, and datacenters are dark without need for more of them, or more GPUs.
What seems surprising, is that even though the bubble fuckers know that collapse/pop occurs when OpenAI crashes, they are not stepping up with a measly $9b to keep it alive for a few months.
I got really excited, wanted to read more, and then realised there was no source linked.
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I think they want to use the bubble bursting to punish attempts to regulate them, like a form of capital strike.
"Oh, you want to restrict data center development? Well we'll blow up the economy! Fuck you!"
The bubble will stay inflated as long as they need it as a threat to keep the new Dem majority in line.
Yup, agreed. The ruling class seems content to keep shuffling IOUs around. If the bubble bursts, it'll be because they want it to.
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Maybe, is that even profitable anymore with exchange prices crashing?
Unless energy prices go down a bunch I don't see it being profitable, but I could be wrong
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OpenAI is out of cash. It wanted to raise $30B last week but only $11b showed up. It's now begging for an additional $9b (down from original request of $19b more) from plebs, but no one has committed anything. They want to raise money at a $1.25T valuation, while ANThropic is struggling to clear a $1.3T valuation for its IPO, and ANT is arguably worth double whatever OpenAI is worth, or more precisely OpenAI is half of ANT.
OpenAI is likely this week to lock in that $11b in commitments to prevent "cold feet clauses", and then add incentives for the other cash it needs. Coreweave is another company that needs cash now, with no good options to raise any of it.
The AI circular financing bubble has OpenAI at the center. Instead of pretending it is worth $1T, all of the promises OpenAI has made have bankruptcy triggering clauses by the promise receivers, and under bankruptcy, selling off assets is worth less than $10b, and datacenters are dark without need for more of them, or more GPUs.
What seems surprising, is that even though the bubble fuckers know that collapse/pop occurs when OpenAI crashes, they are not stepping up with a measly $9b to keep it alive for a few months.
The economic hardship that everyone suffers when the music stops will be blamed on the results of the midterms by the loud cheetoh.
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Probably all going to be bought by cryptominers.
Wouldn't make much sense if there are ASICs
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Unless energy prices go down a bunch I don't see it being profitable, but I could be wrong
Yah thats what I was noticing, my power bill only goes up…never down lol.
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OpenAI is out of cash. It wanted to raise $30B last week but only $11b showed up. It's now begging for an additional $9b (down from original request of $19b more) from plebs, but no one has committed anything. They want to raise money at a $1.25T valuation, while ANThropic is struggling to clear a $1.3T valuation for its IPO, and ANT is arguably worth double whatever OpenAI is worth, or more precisely OpenAI is half of ANT.
OpenAI is likely this week to lock in that $11b in commitments to prevent "cold feet clauses", and then add incentives for the other cash it needs. Coreweave is another company that needs cash now, with no good options to raise any of it.
The AI circular financing bubble has OpenAI at the center. Instead of pretending it is worth $1T, all of the promises OpenAI has made have bankruptcy triggering clauses by the promise receivers, and under bankruptcy, selling off assets is worth less than $10b, and datacenters are dark without need for more of them, or more GPUs.
What seems surprising, is that even though the bubble fuckers know that collapse/pop occurs when OpenAI crashes, they are not stepping up with a measly $9b to keep it alive for a few months.
You can make a LOT of money if you know the bubble is going to burst. Open up some puts! Just don't buy 0DTE like a noob.
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Wouldn't make much sense if there are ASICs
Egalitarian PoW don't work better on custom hardware. You're just thinking of bitcoin
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Unless energy prices go down a bunch I don't see it being profitable, but I could be wrong
Energy prices have gone down a ton. Solar is like 1,000 times cheaper than it used to be.
Most crypto miners run on renewable energy.
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Yah thats what I was noticing, my power bill only goes up…never down lol.
Have you tried installing solar panels?
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Egalitarian PoW don't work better on custom hardware. You're just thinking of bitcoin
Egalitarian PoW don’t work better on custom hardware.
I mean it could... Even for Egalitarian PoW. You'd have to make the ASIC specifically for the exact PoW you're trying to target, and you're going to end up with something pretty exotic that's going to be easy enough to invalidate by altering the PoW. But, you could...
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"Too big to fail" (TBTF) is a theory in banking and finance that asserts that certain corporations, particularly financial institutions, are so large and so interconnected with an economy that their failure would be disastrous to the greater economic system, and therefore should be supported by government when they face potential failure.[1] The colloquial term "too big to fail" was popularized by U.S. congressman Stewart McKinney in a 1984 Congressional hearing, discussing the Federal Deposit Insurance Corporation's intervention with Continental Illinois.[2] The term had previously been used occasionally in the press,[3] and similar thinking had motivated earlier bank bailouts.
So exactly what I said. They might get bailouts to avoid failure.
In 1994, Continental was acquired by Bank of America to expand its presence in the Midwest
So it went kaput anyway, which is what I meant
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In 1994, Continental was acquired by Bank of America to expand its presence in the Midwest
So it went kaput anyway, which is what I meant
It didn't go bankrupt it just got bought out.
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It didn't go bankrupt it just got bought out.
It ceased to exist, so failed. Too big for that, they said?
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I think they want to use the bubble bursting to punish attempts to regulate them, like a form of capital strike.
"Oh, you want to restrict data center development? Well we'll blow up the economy! Fuck you!"
The bubble will stay inflated as long as they need it as a threat to keep the new Dem majority in line.
seems fair, people should have enough money in reserve to survive a good recession or two anyways.
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seems fair, people should have enough money in reserve to survive a good recession or two anyways.
Unless inflation keeps increasing.
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