News of the day
1. OpenAI partners have incurred approximately $96 billion in debt to fund data center and chip expansion for AI infrastructure.→ Read more
2. Amazon uses predictive modeling and proactive scaling to handle Black Friday traffic surges, ensuring service availability and cost-effectiveness.→ Read more
3. OpenAI denies responsibility in a lawsuit claiming ChatGPT contributed to a 16-year-old's suicide, sparking debate on AI accountability.→ Read more
4. Supabase CEO discusses the tough choices behind the company's $5B valuation, highlighting the growth of open-source backend infrastructure. → Read more
Our take
Hi Dotikers!
This week, one number says it all: 96 billion dollars.
That's the debt piled up by OpenAI's partners; Oracle, Softbank, CoreWeave, and others; to build data centers and buy chips. Meanwhile, OpenAI keeps its hands clean: it's everyone else doing the borrowing.
The model is simple. OpenAI needs massive computing power. Rather than investing itself, it signs long-term contracts with partners. Those partners then take on huge debt to build the infrastructure. CoreWeave, for instance, has commitments that far exceed its annual revenue (around 5 billion). The bet: AI will explode, revenues will follow, and everyone gets paid back.
The problem? Everyone's making the same bet at the same time. The five tech giants (Amazon, Microsoft, etc.) have issued 121 billion dollars in new debt this year; four times more than usual. And markets are starting to flinch: the cost to insure against an Oracle default is rising. Translation: investors are wondering if all this will hold.
The real question is no longer "should we invest in AI?"; the answer is yes. It's rather: who's going to pay if growth takes longer than expected? Those with access to cheap electricity and long-term credit can hang on. The rest may soon discover that you can't build the AI of the future with PowerPoints alone.
G.
Meme of the day
