No government money was ever involved, no funding ever left anyone’s bank account, no “initiative” ever existed, and OpenAI, Oracle and SoftBank have, in my opinion, conspired to mislead the general public about the existence and validity of a project for marketing purposes.
Who would have guessed.
Oracle has also, per Bloomberg, deliberately raised money using “project financing” loans that are repaid using the projected cashflow, allowing it to keep the massive amount of debt off of its balance sheet. This is remarkable — and offensive! — because it’s borrowing over $38 billion to fund construction of its Wisconsin and Shackelford data centers (the largest debt deal of its kind on record) and said debt will now effectively not exist despite its massive drag on Oracle’s cashflow, which sat at negative $24.7 billion in its last quarterly earnings.
Based on estimates ($30 million in critical IT and $14 million in construction per megawatt) from TD Cowen’s Jerome Darling, the total cost of Oracle’s 7.1GW of data center capacity will be somewhere in the region of $340 billion to build.
All of these data centers are being built for a single tenant — OpenAI — which expects, per The Information, to lose over $167 billion (assuming it hits annual revenues of over $100 billion) by the end of 2028, and as a result does not actually have the money to pay Oracle for its compute on an ongoing basis.
This US economy is a fucking joke right now.
Is Oracle just the sacrificial lamb?
I would bet they plan kill the lamb that is Oracle with debt financing, file for bankruptcy, then sell off the GPUs and DCs to OpenAI directly for pennies on the dollar and we’ll find out the Ellison has a leveraged stake in OAI and comes out the other end whole.
it’s okay, joe taxpayer will end up covering these datacenter grifts when the music eventually stops i’m sufe
They will be repurposed as ICE detention centers, no worries!
Did you see the reports about ICE commissioning AI “smart glasses” that connect to facial recognition software and US immigration/passport/driver license databases to identify everyone the camera sees, by name and immigration status, in real time?
You need some pretty big data centers to process tens of thousands of those glasses all running at once, plus however many hundreds of thousands of other cameras and drones and whatever are linked to the same federal identification software.
Not to mention the real time tracking and networking from camera to camera the feds could theoretically use to track the identity and location of every human being within range of a camera, to, for example, get the immediate current location of whoever they want, or track back a person’s movements, and who they interacted with, for as far back as the camera records exist.
Good thing a bunch of those data centers are going broke and heading for a government buyout, right?
I share your concern around what is essential Microsoft recall in real life. As far as the data centers go, we should convert them all into libraries. At least they’ll be benefiting normal human beings then.
So, never getting buikt works out. Phew.
It’s very likely that I’ll lose my job if Oracle goes kaput… and I still don’t think I’ll be sad when it happens. Oracle has consistently been one of the biggest villains in tech, even before all of the AI insanity. For as long as I’ve been in the industry, at least.
Fuck Oracle.
Maybe if we get lucky, Oracle just dies and Ellison goes bankrupt then goes to prison.
Ooh, what if Oracle goes down with Ellison, but Ellison then sues Sam Altman for fraud and takes Openai with them?
We can dream
If we get really lucky, Ellison just dies, and then Oracle goes bankrupt, and then all its senior management go to prison.
As usual, Ed Zitron is a voice of sanity.
There’s part of me that’s thinking he’s so sure of his analysis, maybe he’s wrong. Especially as he’s a bit of a lone voice. Trouble is, I don’t see how he would be.
That’s the same thought he’s admitted to multiple times. He wonders constantly if he’s wrong, if his analysis is flawed, if there’s secretly some way these companies actually pull all this off and the boosters are right and “”“AI”“” will save us all before the economy collapses. He wonders this constantly, asks for second opinions, reruns the analysis, goes to experts, everything.
And he comes to the same conclusion. Everything’s fucked and everybody sucks, and there’s no way out. He’d love to be wrong. Certainly, his detractors would love him to be wrong too. But nobody ever seems to have a decent counter-argument backed up with real data. So, we’re stuck with his theses until something explodes, and we see the real fallout.
Huh, so this is how the second great recession starts.
God damn. How many shit sandwiches are we, as a people, going to unquestionably house down before we know what we’re being served? This is so far past the point or acceptability.
Stop. Get some help.
Shocking. Who could’ve known?
I cannot take anyone seriously who is surprised at getting scammed by literally anything orangeboi is involved in
Oh no! Anyway…
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