It feels like it should be a bigger story that S&P Global is considering downgrading SoftBank's credit rating due to their investment in OpenAI, saying that their "financial condition will likely deteriorate" as a result of their investment. www.wsj.com/business/dea... - ThreadSky

edzitron.com • 5 days ago

It feels like it should be a bigger story that S&P Global is considering downgrading SoftBank's credit rating due to their investment in OpenAI, saying that their "financial condition will likely deteriorate" as a result of their investment.

https://www.wsj.com/business/deals/openai-softbank-investment-debt-51b4a130

Comments

jdshadel.com•4 days ago

Yahoo!!

msraitchetp.bsky.social•5 days ago

it should be a bigger story that Masayoshi Son is a terrible investor. But here we are.

toddcorley.bsky.social•5 days ago

GOOD..... I hope they lose it all

jeffinblue.bsky.social•5 days ago

Have you talked about the Shopify memo? I've yet to see a concrete example where AI (not just automation) can be used in a recurring process that doesn't involve writing text for emails or presentations

edzitron.com•5 days ago

Tobi Lutke is a fucking moron who doesn't do any real work

essaywells.bsky.social•5 days ago

So we've identified at least one person that can profitably be replaced with an LLM, is what I'm hearing :)

jeffinblue.bsky.social•5 days ago

"I was able to consult with AI to discuss my work performance and set my annual goals, and it even gave me a raise! By the way, it says you're fired"

botticellibelle.bsky.social•5 days ago

Lol! Lmfao even.

AI is for suckers.

robinkunde.bsky.social•4 days ago

It’s called generative AI yet none of the companies are generating returns on investment.

maxashermiller.bsky.social•5 days ago

I love how the subtext of this snippet is, "These mfs were dumb enough to fund Yahoo, so what did you expect?"

vegetablegremlin.bsky.social•5 days ago

hey ed first time long time but i know youve long been worried about the effect the ai bubble bursting will have on the economy, do you have any thoughts about the economy just being crashed by hitting the big red "crash the economy" button before the bubble had a chance to burst?

tmoney2007.bsky.social•5 days ago

I think that people are probably too distracted by the potential collapse of the global economic order,... Masayoshi Son should be scared that S&P Global is calling a spade a spade finally.

I don't think that bell can be unrung.

kcroysdale.bsky.social•5 days ago

Is the Everything Bubble based on the vast profits of AI a fantasy? 🤔 #everythingbubble

https://medium.com/@www.oftwominds.com/is-the-everything-bubble-about-to-pop-cb626f546edd

shmeltonshmain.bsky.social•5 days ago

And why would anyone trust a soft bank? Doesn't sound like it offers much protection.

edzitron.com•5 days ago

OpenAI "raised $40bn" but only got $10bn. The rest ($30bn) doesn't arrive until the end of the year, and if they don't become a for profit by then, it's $20bn.

Even if they succeed: they need $40bn+ a year in funding to survive, expecting to lose $10bn+ a year without fail. I have detailed notes.

edzitron.com•5 days ago

To raise this "$40bn" - of which $30bn is SoftBank and only $7.5bn of the $30bn they're meant to send has actually been sent - SoftBank has to raise loans and sell assets. They can't do this again, and OpenAI needs them to, every single year.

edzitron.com•5 days ago

People can keep shoving their heads in the sand and "just assume this all works out," but OpenAI is becoming a form of systemic risk - one hitting Oracle, SoftBank, Crusoe, CoreWeave, NVIDIA, and possibly even Microsoft. Every single part of this is brittle and depends on near infinite resources.

timmetie.bsky.social•4 days ago

I wonder what the effect is going to be on crypto, that pushed up a lot of GPU demand before.

If both AI and crypto crash there's going to be an absolute flood. Although, on the other side, seems like energy is going to be cheaper because of a recession.

edgarageous.bsky.social•5 days ago

People were calling WeWork a potential systemic risk at one point and while that didn't pan out it sure did have a big negative impact

edzitron.com•5 days ago

Wework did not have this level of tendril-like debt and commitments

edgarageous.bsky.social•5 days ago

I believe you. Also, to the extent WeWork had commitments all over, they were to real estate owners who weren't hyping their securities quarter-to-quarter on the extra marginal revenue

jbreckmckye.bsky.social•5 days ago

So what happens when the domino falls?

Say OpenAI can't service their debt, and neither can SoftBank. Who else gets pulled into this mess?

paullaforet.bsky.social•5 days ago

Resources that are about to become very expensive and scarce with a global trade war.

kopbeen.co.nz•5 days ago

Do you think the eventual economic downturn caused by tariffs will accelerate the popping of this bubble?

edzitron.com•5 days ago

Yep https://bsky.app/profile/edzitron.com/post/3llx6bcogss2m

sandbags.bsky.social•4 days ago

The good news is that most of the businesses you cite are mostly stagnant pools of capital with little, if any, useful innovation left in them. It’s a net win for the world if they go away and create space for new comers.

pierogiaddict.bsky.social•5 days ago

You'd think anyone not in the cult would at least use the convenient tariff excuse to bail out now as much as they can.

iamdarkink.bsky.social•5 days ago

I'm not worried, they'll just draw on their massive WeWork holdings, right?

skydome.bsky.social•5 days ago

I have to say, Ed, that is so much money.

edzitron.com•5 days ago

People say I'm a skeptic and that I am a hater. What I actually am is a person who can look at the hard numbers and see that funding OpenAI is a material risk to SoftBank.

https://www.lightreading.com/finance/softbank-s-40b-funding-for-openai-could-put-its-financial-health-at-risk

theodora30.bsky.social•5 days ago

You can be a skeptical thinker, that is a person who questions, analyzes ideas and claims based on the most reliable, objective facts available. That make you rational, not cynical or a hater.

mikefulk.bsky.social•5 days ago

We are realists. People who choose to observe objective reality and deal with the facts and numbers.

capturingthemachine.com•5 days ago

you may not be, but I am a hater

neddog.bsky.social•5 days ago

Same. Please, please, please... I so hope this will end the unwanted implementation of generative AI in all the technology it doesn't belong in!

orbdisdain.bsky.social•4 days ago

Infinity money to do any abstract regression on any dataset.
Fails to see line go down.

jmeijers.bsky.social•5 days ago

OpenAI feels a lot like Blockchain, a solution in search of a problem.

hardwarelust.bsky.social•5 days ago

I've always been a hater, and now you have given me the information to realize that it was based on facts, not feelings, and I just didn't know it.

isobelstarling.bsky.social•5 days ago

jodami.bsky.social•5 days ago

These people really know how to pick winners.

oisinbreen.bsky.social•4 days ago

I've increasingly come to see SoftBank as a bellwether for what not to do.

coffeeplz.bsky.social•5 days ago

What's the "just one more lane, bro" for AI?

"Just one more investment round, bro."

jafarvcf.bsky.social•5 days ago

Ed. You're doing God's work. When it all goes to shit I want you rub it in everyone's face. You deserve it

comradeishmael.bsky.social•5 days ago

SoftBank making bad investments in speculative/nonsensical technology? Must be a day ending in -y.

marinermichael.bsky.social•5 days ago

Softbank should be a looked at as a pass through entity to pull Saudi SW funds out and deposit them in the US

dontinnovate.bsky.social•5 days ago

They really do behave as a degenerate gambler would after winning the powerball twice.

cdanby.bsky.social•5 days ago

It was right there in the name.

But seriously, yeah, if there's a serious drop in AI valuations a lot of people are gonna get caught short.

sammisolsdottir.bsky.social•5 days ago

Holly shit

bosdcla.bsky.social•5 days ago

The only two times I've read about SoftBank is their investment in WeWork and now in OpenAI. I suppose they must periodically make good investments as well, but the WeWork fiasco should have made them cautious about another massive investment in overhyped tech stuff.

wuwave.bsky.social•4 days ago

Your discussion with Shingy convinced me that these ai companies need to wither solve the ad business deal of the equation or be able to replace humans if they want to become profitable.

jamu212.bsky.social•5 days ago

Your post is misleading, the analysis you provided was under the "risk" section of the article.

shempeverlasting.bsky.social•5 days ago

I have seen the future, and it is PUSH

iamdarkink.bsky.social•5 days ago

The best way to make a small fortune with softbank is start with a large fortune.

Comments

Posting Rules

Reply