Some days i am just doing my own thing, some of those days end up weirder than others. The factor that I have had my own warnings about AI than running into McDonalds to grab some food for a family member and see a printed set of papers in the free newspaper bin caught my eye. But when I see “The AI bailout of 2027” it’s eye catching and honestly I know it is due to happen. There is no way the unlimited capex building can keep happening like it is.

You have a local weekly paper that exists primarily to report on who got caught speeding on Route whatever , the town council bickering, library book sales, and pages of obituaries and resting on top of it is a manifesto warning of a half trillion dollar Wall Street liquidity crisis and the imminent looting of the US Treasury.

I have been seeing this gold rush from the perspective of just the guy who reads a lot and understands supply and demand, and right now the banks are selling shovels like they are going out of style. So seeing an article without a header or a site piqued my interest. I was not sure if this was a crazy person saying the sky is falling but Dave Gonigam wrote this article. In the start of this printed paper it starts ominously.

Slowly, inexorably, the path is becoming clear: The AI industry will be asking for a taxpayer bailout next year. Or, at the latest, 2028.

The signs have been there all along, and we’ve been following them for nine months now…

Dave starts strong here, The CapEx that is being put out in the markets is something we have seen before, it happened in the 1920s, Massive amounts of expenditures that do not make sense on paper. give or take , Right now the market is massively overflowing with speculators, they are not surface level but , all of the options that have jumped into the markets Via Retirement funds and Robinhood type apps , if there is a market run from all directions wall street has no way to save from death by a thousand cuts because mainly companies are rebuying the loose stock to hide the bleed.

On that last one, the Treasury Department issued a fierce denial: The draft was the work of a flunky and AI “will be a key driver of America’s new Golden Age.” (As the saying goes, never believe a rumor in Washington until it’s been officially denied.)

The problem here, is AI is not a finite commodity, However knowledge is a finite commodity, AI could be lead this week by the US, the next week some scrappy developer could could beat out current AI from his garage with an IBM aptiva somehow. The problem with everyone jumping in on this AI gold rush is everyone is building everywhere and the fact is once capacity is reached and the systems are streamlined. we are going to be stuck with a lot of dead data centers. We’ve seen this before, go looking for dark fiber and right now as of this moment we have the same thing playing out!

Executives from all seven firms did a live interview on CNBC, which says the agreement will “treat compute infrastructure much like commercial real estate, toll roads or other assets to borrow against… The effort aims to mobilize more than $500 billion in third-party capital for hyperscalers, frontier AI labs and enterprises to build out data centers and acquire Nvidia hardware, marking a potentially important shift in how AI infrastructure is funded.”

The line, “treat compute infrastructure much like commercial real estate, toll roads or other assets to borrow against” is the lead here, its the SaaS , the BMW heated seats. The Lawn Mower you are not allowed to repair. This is the divide and conquer of the computer. Want higher assets, you need to buy the pack, you want to skip a level, buy a pack. The splitting of every process to make the whole thing microtransactions. instead of making toast, you get the Bread insertion charge. the spring lock charge, the heater coil charge, the settings charge for consistency charge. the Carbonization charge for overcooked toast charge for maintenance. Finally the completed Toast charge when it pops up.

“By using institutional credit, insurance funds and private capital to underwrite GPUs and data centers, Nvidia is helping its end users secure financing without tapping their own balance sheets,” CNBC continues.

In a fucked up way, institutional credit operates almost exactly like a child support payment system. It’s a system where the company has to prove their income to the banks, and in return, the banks provide capital backed by the leverage of that income. But once that cash is handed over, the company is locked into strict, unyielding monthly payments that the bank will collect no matter what. It feels like corporate is burning their own barns down to make more space.

Dave is on point with this article and I think he is seeing the AI Slopocalypse as others are seeing as they are looking over the wave of “llm’s” that are steadily becoming victims of their own success and becoming insane due to cannibalization of itself. AI is slowly coming down with its own version of Bovine spongiform encephalopathy and whether corporate knows it or not the end of the road is paved with good intentions but right now feeding your herd with its own slop is a deadly recipe..

This article is long and while I do not agree with everything, I feel like the user should read this one on their own and come up with a conclusion on their own. A link is below to the original article.

Attributions from:
Paradigm Press:The AI Bailout of 2027- Dave Gonigam