Groups including JPMorgan Chase, Morgan Stanley and SMBC are trying to find ways to distribute portions of data centre-related deals to a broader range of investors, according to people familiar with the matter.
Lenders are exploring private deals to sell stakes in the debt as well as so-called risk transfers to reduce exposure to big borrowers and free up capacity for more lending.
This gives me strong deja vu for the housing crisis of '08.
so-called risk transfers to reduce exposure to big borrowers and free up capacity for more lending.
That sounds like it should be highly illegal.
“Hey, we know this crash is coming, and we’re going to leave you with the bill for it even though we profited enormously off of the bubble economy which directly resulted in the inevitable crash. And while we wait for that crash to happen, we’re going to continue milking that bubble for the last few scraps of profit that we can squeeze out of it, which we will also leave you with the bill for when it finally crashes.”
What? You don’t want to buy a few tranches of GPU backed securities?
Last time it happened, trillions in tax dollars were funneled right to the top. They would be stupid not to try again
I’m sure they learned their lesson…
… which is why they’re fine with it happening again.
I’d rather just buy the GPUs second-hand after the companies fail and have to liquidate…
Wait wait. Actually can I just buy some and act like it’s a gpu preorder?
I want to short the housing. I mean GPU market.
I bet they’re going to start selling CDO2 again, only this time the underlying debt will be data center debt instead of mortgages.
Was just going to say that…
I was also going to say that.
Eh, if they’re actively talking about it, then it’s a lot better than the housing crisis. The big issue there was no one was actually calling the garbage assets garbage. Here they seem to be calling out the risk.
That’s not true at all. People were screaming their heads off about the looming crisis.
Maybe my memory isn’t right, but I thought the big deal with the 08 crash was that few people saw it coming as the bad assets were bundled together with okay assets hiding their real risk. If AI takes down the economy, it’s not going to be surprising to most people as many people are calling out how overleveraged some of these companies are.
nah. everyone knew it was shit but back then, just like now (in fact…they still sling that same old bad collaterized debt shit from back then too)…government is captured by those profiting off of selling the stuff. once the music stops, the powers that be will pretend they had no clue, give a blank check bailout to the corpos and tell everyone else to pound sand.
we’ve done this dozens of times over by now in the US
Reading further into, it’s a mixed bag. There are people calling it out, but some of the movement of funds is to free up more lending.
These are the too-big-to-fails, right? So they must be destroyed then.
Won’t happen when the only politicians we can vote for are corpodems and other republicans.
Why do I think that there is a government bailout brewing?
I don’t really know what the fuck it is that they expected. They could have asked anyone who wasn’t a so called investment expert and figured it out ages ago. Idiots.
Enter the perennial suckers/bag holders, pension funds, run by ivy league hacks that get paid regardless of performance and run these funds.
This AI bubble is going to take so much of the economy with it and I can’t help but think we are all going to be paying to keep “too big to fail” businesses that clearly knew it was a bubble but invested anyway because the public would pay if it went side ways.
Nah, AI Corpos are not too big to fail. A lot of Money has been dumped into this hole, but it’s irrelevant for keeping the economy itself running. Oracle will not survive its stupid deal with OpenAI tho when the venture capital dries up and Altman can’t pay for Stargate Abilene.
Yeah, no. Fuck the banks.
Let the bubble pop
Let the bank fail.
The point of this is that they are arranging for other people to fail. Like your pension fund or ira.
Are all these data centers really going to be running at full capacity with open models like Qwen 3.6 27B that have performance approaching frontier, but can run on consumer hardware? Sure, it’s slow as of now, though there are tweaks to optimize it, and how long until we see open models that run reasonably fast and give frontier models a run for their money? My company MacBook can run models like this, so will there be a point where companies stop paying hundreds per user per month for cloud AI and have devs run open models on the laptops they already have? I definitely won’t be surprised if that’s the case.
It’s like they suddenly realized that “data center leased to Oracle” but financed by them and owned by a no-name company with no assets and considerable liabilities is a bad idea.
Also, would not be surprised to find the company is a shell company and after the finance and legal teams are paid, the income shifts back through shell companies to the parent company, which is somehow Oracle, but with no legal responsibility to the lenders or municipality.
Even if my supposition is not accurate, just the first statement should have stopped them cold.
It’s like they suddenly realized that “data center leased to Oracle” but financed by them and owned by a no-name company with no assets and considerable liabilities is a bad idea.
I would be shocked to discover that that’s not exactly, literally, what happened.
LET THEM FAIL.
I agree. However, we all know the Federal Reserve will not allow this to happen and that they will just print the money to make them solvent, just like in 2008.
BURN, BABY, BURN, DISCO AINFERNO!
Why do I feel like “explore private deals” really just means “inventing legal fictions” to permanently insulate themselves from risk?
Maybe they can bundle them up into investment vehicles and sell them to normal people, they can name them Regular Everyday Investment Trusts or something. Totally no way for that to fall apart.
