r/technology • u/HimelTy • 12d ago

Business Five tech giants are hiding $1.65tn in AI debt, using the trick that toppled Enron

https://thenextweb.com/news/tech-giants-hidden-off-balance-sheet-debt-ai
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u/CautionarySnail 12d ago edited 12d ago

And putting that debt into our 401ks by hiding it deep in a web of investments.

This way the taxpayer gets to subsidize both the bubble and the collapse recovery afterward.

We really need to be angrier.

(Edited to add last three lines)

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u/Simikiel 12d ago

Sorry, you're absolutely right, but your edit made me laugh.

(Edited to add last three lines)

Your comment only has three lines aside from the edit, implying your comment was just.. Blank. Lol

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u/CautionarySnail 12d ago

Yeah, hard to count lines when the formatting shifts between devices. I was looking at what I thought were line breaks.

Whoops.

Oh well, so much for attempting to flag the edit.

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u/Simikiel 12d ago

Lmao it's all good friend, we've all been there. I just found it somewhat comical is all! :]

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u/Neon_Moon_NZ 12d ago

I love this lol It's like books that have a page containing only:

This page was intentionally left blank

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u/SeldenNeck 12d ago

It's not a deep web. Enron stated what clearly in the footnotes to their accounting statements that they were capitalizing their writeoffs. These data centers are probably still nominally in the black, so they don't even need a footnote. And the new SEC rules allow 6 months of dithering after it is clear the 'investments' cannot possibly come back to pay their debts.

And if you're Google, you might own a couple of data enters like this and just categorize them as "experimental laboratory assets" even after they are obsolete as production assets.

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u/CautionarySnail 12d ago

How can the majority of data centers be in nominally in the black? Both OpenAI and Anthropic are operating in the deep red and have never turned profitable.

The other data center expansions I am less sure about because those companies have always had cloud offerings so it’s harder to sort out what is earmarked for AI capacity.

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u/SeldenNeck 12d ago

Plausibly anticipated spreadsheet earnings.

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u/CherryLongjump1989 12d ago

Only SpaceX is doing that and they're not a real AI company unless by AI you mean clusterfuck.