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What if AI companies become deemed "too big to fail" in the event of a bubble?
Posted on 10/18/26 at 4:43 pm
Posted on 10/18/26 at 4:43 pm
And more importantly how would you feel if the government bailed them out. The government does have an interest in United States based companies continuing to develop the latest and greatest in AI technology so it's not far fetched.
Companies like Meta, Alphabet, Microsoft, Apple, Oracle all have strong enough businesses to survive if all of this capex doesn't provide a return and they can absorb the hit so to speak.
Companies like Anthropic and OpenAI by contrast have pretty much all of their eggs in one basket and are highly leveraged into this bet.
So if there is a government bail out between now and the end of Trump's second term does that change how you view his legacy? If this happens further down the road with another candidate will it define how you view their legacy?
There is one thing I'm fairly certain of. If the government bails out several of the key players in this industry it will not go over well with the general public. But that's not the question here. How would you react to such a development?
Companies like Meta, Alphabet, Microsoft, Apple, Oracle all have strong enough businesses to survive if all of this capex doesn't provide a return and they can absorb the hit so to speak.
Companies like Anthropic and OpenAI by contrast have pretty much all of their eggs in one basket and are highly leveraged into this bet.
So if there is a government bail out between now and the end of Trump's second term does that change how you view his legacy? If this happens further down the road with another candidate will it define how you view their legacy?
There is one thing I'm fairly certain of. If the government bails out several of the key players in this industry it will not go over well with the general public. But that's not the question here. How would you react to such a development?
Posted on 10/18/26 at 5:35 pm to Powerman
The government shouldn’t pick winners and losers, but it’s hard to say what should be done here. The reason Trump loves “SI” so much is because it’s holding up the stock market like Atlas held up the sky. Pretty bullish that the bubble won’t burst though, but we’ll see.
Adjacent to that, this technology is super concerning and needs to be regulated. I don’t really give a frick about a regulatory moat, little guys are likely to never catch the frontier companies anyways. I’m agnostic on whether it will kill us all, but it’s becoming clear that it can do a lot of harm if things keep going how they are.
Adjacent to that, this technology is super concerning and needs to be regulated. I don’t really give a frick about a regulatory moat, little guys are likely to never catch the frontier companies anyways. I’m agnostic on whether it will kill us all, but it’s becoming clear that it can do a lot of harm if things keep going how they are.
Posted on 10/18/26 at 6:09 pm to Powerman
This is exactly what I expect to happen, as the build out of these data centers makes no financial sense otherwise. There is no consumer level adoption that is making any money and even where most companies have invested, they have quickly divested after seeing no RoI. With the billions being spent on these data centers, we have a huge bubble burst about to happen, and/or the government is going to use your tax dollars to prop it up since they want to surviel everyone, which feels like the driving guarantee behind these investments. Very pivotal point for our country and the world imo.
Posted on 10/18/26 at 6:13 pm to Powerman
It seems like that’s where we are heading. AI is too expensive to be practical for private companies. Its capabilities are best leveraged by government anyway.
Posted on 10/18/26 at 6:33 pm to Melkor
quote:
This is exactly what I expect to happen, as the build out of these data centers makes no financial sense otherwise.
I think it's very plausible. I think that eventually AI becomes commercially viable but the amount of capex requires it to become commercially viable sooner rather than later. People aren't going to wait 10 years for ROI
There is also the other consideration...private debt markets and banks would go down with the whole thing. A significant portion of the economy is tied at the hip to this bet in one way or another.
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