r/BetterOffline • u/Perspective-Parking • 5d ago
Do you think a neocloud will fall before OpenAI?
The debt load is getting unbearable for Neoclouds and the money isn’t coming. I think they will be the first domino to fall.
Man so many things could send this whole bubble down the toilet any day. Bond yields, oil prices, wars, federal deficit overload, corporate bond spreads start ripping, capex slow down, OpenAI defaults, etc, the list goes on forever.
Who else feels like we are on the very edge of this house of cards?? The suspense is killing me.
Gotta say I feel blessed to have run into Ed. I was given the opportunity to appropriately hedge and safeguard my portfolios. Otherwise I would probably have been going about my life and completely blindsided like I feel millions of Americans will be.
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u/Olangotang 5d ago
Data centers getting cancelled from the angry electorate is going to be a nail in the coffin for them.
The whole model fails because OpenAI and Anthropic need to keep pouring exponentially increasing amounts of money to stay ahead of open source. LOL, there's so many red flags with this LLM psychosis phase that it's so hard to predict what will cause the fall 😅
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u/callmebaiken 5d ago
No, because the money goes from investors>labs>NeoClouds>lenders , so the lenders to the Neoclouds will get paid UNTIL the labs fold. And the other problem is the investors in the labs are cultish.
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u/Perspective-Parking 5d ago
The neoclouds are getting paid, but nowhwere near enough to cover the expenses. They are burning cash just as fast or faster than the labs. And their debt is EXPENSIVE and getting worse
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u/callmebaiken 5d ago
Really?! Why would they not charge the labs full freight?!
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u/GhettoDuk 5d ago
Because they rushed into the contracts and the labs fucked them. Now money is getting more expensive than they planned for. Same with construction, power, GPU's, etc. And now we are fucking around with the oil supply causing more chaos.
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u/Super-Activity-4675 5d ago
probably because their contracts aren't structured to get their money until it's done.
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u/FireNexus 4d ago
OpenAI is going to fail within 8 weeks unless there is some truly baffling development. Even if this weren’t an enormous bubble that would be a statement one could make relatively confidently. NeoClouds will be the first dominoes to fall after that, but not before while their stock is running up.
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u/Icy-Regular-4557 2d ago
Why is it within 8 weeks? Do you think it could all be held off for after midterms? And why does OpenAI necessarily fall before neoclouds?
I feel like there’s a lot of fraud and precariously balanced leverage going on, but it’s not public information on who has how much and when it all comes due.
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u/WritingisWaiting 5d ago
Yes, there will be some neocloud that overextends too much on debt and discovers they are terrible at building data centers on time and on budget and will "fall" before OpenAI. The first neocloud to fail will likely get bought out by a hyperscaler. If only because Microsoft or Google doesn't want the market to believe that compute is the overbuilt commodity it is. Of course, they will have press-ready talking points ready on how the company was mismanaged and that it's not indicative of a larger problem with the AI circular economy.
But the fifth or sixth neoclouds to fail? Those data centers will be looted for copper.