I was thinking about the skyrocketing memory prices and something dawned on me: could it be a way to prop up AI investments by artificially covering the huge loans that have been taken out to fund them?
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I was thinking about the skyrocketing memory prices and something dawned on me: could it be a way to prop up AI investments by artificially covering the huge loans that have been taken out to fund them? Could it be a way to artificially inflate the value of datacenters these companies have on their balance sheets? I don't want to sound paranoid but bear with me for a second. 🧵 1/6
As you know several companies have taken on a gigantic amount of debt to build datacenters - Oracle is a good example. This debt is in the form of loans where the collateral is the datacenter itself, or rather what's inside of it. A building can't be worth billions unless it's packed with hardware that costs billions, so the actual collateral is the hardware... But hardware depreciates *fast* so it's a terrible collateral. 2/6
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As you know several companies have taken on a gigantic amount of debt to build datacenters - Oracle is a good example. This debt is in the form of loans where the collateral is the datacenter itself, or rather what's inside of it. A building can't be worth billions unless it's packed with hardware that costs billions, so the actual collateral is the hardware... But hardware depreciates *fast* so it's a terrible collateral. 2/6
When was the last time you bought a piece of gear and the price went up? Never. After a year the value of a new graphics card is already measurably less than when you bought it. And these companies are amortizing the value of these things over six years which is a very long time. They'll be worth nothing in less than three. Unless the price of new hardware goes up a lot. Like multiple times. Like what just happened with memory. 3/6
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When was the last time you bought a piece of gear and the price went up? Never. After a year the value of a new graphics card is already measurably less than when you bought it. And these companies are amortizing the value of these things over six years which is a very long time. They'll be worth nothing in less than three. Unless the price of new hardware goes up a lot. Like multiple times. Like what just happened with memory. 3/6
And these datacenters are packed with RAM too. And RAM prices went up by 5 times in a matter of weeks, against a market that was predicted to *decline* in volume this year. That is awfully convenient if you have a lot of this stuff on your balance sheets: it's an asset. Even more convenient when at the same time you've taken on a lot of debt, a liability. 4/6
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And these datacenters are packed with RAM too. And RAM prices went up by 5 times in a matter of weeks, against a market that was predicted to *decline* in volume this year. That is awfully convenient if you have a lot of this stuff on your balance sheets: it's an asset. Even more convenient when at the same time you've taken on a lot of debt, a liability. 4/6
Of course I can't prove a cause-and-effect relationship here, but the timing is awfully convenient for the tech market. There's no downside in the short term, but in the medium term this is all smoke and mirrors. At these prices demand for memory will crater, inventories will climb and at some point the prices will have to come down, and any financial bet that has been made on them will unravel. 5/6
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Of course I can't prove a cause-and-effect relationship here, but the timing is awfully convenient for the tech market. There's no downside in the short term, but in the medium term this is all smoke and mirrors. At these prices demand for memory will crater, inventories will climb and at some point the prices will have to come down, and any financial bet that has been made on them will unravel. 5/6
Oh, and BTW, in general a company shouldn't adjust the value of their depreciating assets upwards, even if the market value of those goes up, because it's dangerous to do so. But companies do it all the time since the '90s, it's called "mark to market" accounting. And guess what company became notorious for doing it to artificially inflate its assets? Enron. Enough said. 6/6
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As you know several companies have taken on a gigantic amount of debt to build datacenters - Oracle is a good example. This debt is in the form of loans where the collateral is the datacenter itself, or rather what's inside of it. A building can't be worth billions unless it's packed with hardware that costs billions, so the actual collateral is the hardware... But hardware depreciates *fast* so it's a terrible collateral. 2/6
@gabrielesvelto our data is the collateral, investment, and ‘hostage taking’.
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Oh, and BTW, in general a company shouldn't adjust the value of their depreciating assets upwards, even if the market value of those goes up, because it's dangerous to do so. But companies do it all the time since the '90s, it's called "mark to market" accounting. And guess what company became notorious for doing it to artificially inflate its assets? Enron. Enough said. 6/6
@gabrielesvelto You don't know the half of it. Do you know those GPUs they use as collateral in the loans? Well, they calculated the collateral value with a model that assumes that second-hand GPU's reach their "unsellable" point in 5 years. That would be the moment in time when 1x800€ new gen GPU has more computing power than 4x200€ old cards. Past that point your GPUs are worth 0€ because nobody wants them. Well...¡This number is typically computed in professional bitcoin mining to be 2 years!
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Oh, and BTW, in general a company shouldn't adjust the value of their depreciating assets upwards, even if the market value of those goes up, because it's dangerous to do so. But companies do it all the time since the '90s, it's called "mark to market" accounting. And guess what company became notorious for doing it to artificially inflate its assets? Enron. Enough said. 6/6
@gabrielesvelto this seems too obviously doomed and illegal to be true. But at the same time so many "ai" products are too obviously stupid to be real but exist nonetheless.
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@gabrielesvelto our data is the collateral, investment, and ‘hostage taking’.
@gabrielesvelto they aren’t about making money or a good or real product anymore. They are about controlling any uprising to the massive injustices they feel the need to inflict to protect their interests. Making meme illusion vibe products…
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@gabrielesvelto they aren’t about making money or a good or real product anymore. They are about controlling any uprising to the massive injustices they feel the need to inflict to protect their interests. Making meme illusion vibe products…
@gabrielesvelto
They have more money than they can spend. It’s about patriarchy & supreme power over as many people as possible. Data is kompromat & surveillance in their control. It is Maxwell’s Demon.
AI or crypto, NFTs, sub prime, shorting, meme coins, monopolies, are weapons to empoverish, trap, disempower, rob us of water, energy, clean air, a home, freedom, necessities of life, even kill, many many people, while letting indiscriminate investors profit off it. -
When was the last time you bought a piece of gear and the price went up? Never. After a year the value of a new graphics card is already measurably less than when you bought it. And these companies are amortizing the value of these things over six years which is a very long time. They'll be worth nothing in less than three. Unless the price of new hardware goes up a lot. Like multiple times. Like what just happened with memory. 3/6
@gabrielesvelto March 2024, I bought a 1TB SSD SATA drive. I paid $58. Today, February 2026, that same drive is listed for $139. It's absurd that so much demand has pushed the price that high. It shouldn't cost that. The snake is eating it's tail.
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@gabrielesvelto this seems too obviously doomed and illegal to be true. But at the same time so many "ai" products are too obviously stupid to be real but exist nonetheless.
@sgued mark to market accounting has been part of GAAP for a long time, it's perfectly legal. But it can be abused which makes it dangerous. I don't know if they're actually doing it with RAM, but there's been some very creative accounting in the AI sector, so IMHO it's a possibility.
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@gabrielesvelto
They have more money than they can spend. It’s about patriarchy & supreme power over as many people as possible. Data is kompromat & surveillance in their control. It is Maxwell’s Demon.
AI or crypto, NFTs, sub prime, shorting, meme coins, monopolies, are weapons to empoverish, trap, disempower, rob us of water, energy, clean air, a home, freedom, necessities of life, even kill, many many people, while letting indiscriminate investors profit off it.@gabrielesvelto
For more on Maxwell’s Demon ( a physics & info theory) which is the whole purpose of the extreme mass surveillance state, which includes data centers, AI, hyper control of media, garbling and laying seige on truth & quality information with bots, disinfo, LLMs, and ensures they have all the information & truth, while everyone else has none. Maxwell’s Demon is the actual New World Order they are making but, as predicted, destroying everything to do it.
https://www.pbs.org/video/reversing-entropy-with-maxwells-demon-fpqnz3/ -
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