Scale of debt issuance being used to fund the hectic pace of the datacentre rollout by tech firms is a worry.
W arnings about powerful and uncontrolled AI have dominated the headlines this past week.
Some are also calling for limits on how rapidly the technologies should be allowed to progress, and how they can be used.
Some of the suggestions now being mooted, including independent analysis of AI models, seem improvements on the ungoverned status quo.
Perhaps a government-backed AI “pause” could prevent cheaper Chinese options from encroaching on Silicon Valley’s market dominance, for example.
Away from the risk that their product might obliterate human life, there are more old-fashioned reasons for tech executives to be fearful – including the fundamental one of whether the economics of their businesses work.
In a world of fragile bond markets with yields on 10-year US treasuries, a global benchmark for borrowing costs, hovering at about 5%, the size of these debt piles could be one potential trigger for a market rethink.
An index by the research company Silicon Data that aims to track how much customers are paying for a million tokens shows it more than halving since June, to less than $1.
Yet at the same time, frenzied demand for the real-world components of datacentres is keeping costs elevated.
Anthropic told investors recently that its “adjusted operating income” was positive – the only problem being that this measure effectively excludes many of its costs.
The buyer, doesn’t yet have to account for the costs it will have to pay, once it starts using it.