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Nearly a year ago, I wrote that Coreweave was a timebomb — a rickety tower of debt and bad deals that was primed to blow. I could have made that argument about hyperscalers, NVIDIA and OpenAI. Everybody is waiting for somebody else to make AI a success. www.wheresyoured.at/premium-timebomb/

23/1/26, 6:23 pm11 reposts77 likes

The AI bubble is slowly turning cash-rich, margin-heavy hyperscalers into something far worse. Far from being the asset-light, high-margin software companies they once were, they’re now bloated, filled with tens of billions of dollars in GPUs and data centers. www.wheresyoured.at/premium-timebomb/

It all comes down to accounting. When a company buys a new GPU, it goes onto their balance sheet. These companies bought a lot of GPUs. And the slow rollout of Blackwell means that every single quarter, depreciation charges balloon by billions of dollars. www.wheresyoured.at/premium-timebomb/

And if something happens - like OpenAI dying - the odds of those companies (especially Microsoft) having to make an impairment - a massive writedown for all of these GPUs to the tune of $10bn+ as the demand disappears - further adding to the pain. www.wheresyoured.at/premium-timebomb/