this post was submitted on 20 Oct 2026
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This right here is how all of this will come crashing down. Anthropic and OpenAI, along with several associated companies, are using accounting tricks to hide their debts and obligations. These two are trying to maintain hype for investors so they can cash in on an IPO with total disregard for long-term fiscal sustainability. At some point the bill will come due, and you can bet the C-Suite will have already made out like bandits.
Don't forget, though, that there's another cashflow that they're banking on: total surveillance.
AI can't do a lot of things, but the thing it's most suited for is creating a society run like a prison to try and keep the discontented masses in check.
Not enough people realize this. They think the component shortage is a side effect, but it’s to push you towards cloud services on underpowered devices that rely on it.
Imagine the censorship when every service is monitored and controlled by them. Imagine the market capture when they can see everyone’s financials and trade secrets. When they can cut off journalists and activists with one click.
Haven't heard anything new lately, but there is a push to eliminate physical currency for, what I presume, is a similar reason -> make everything trackable.
People have been trying to eliminate physical currency for decades in not longer. That shit predates computers.
This is quite obvious, it hasn't happened at a global scale yet because people have to agree on which currency it would be
I think this will backfire too. I think they way underestimate the amount of people already using "underpowered devices" that will just continue to do so without the new cloud services shit.
Basically everyone I know us using a 5-10+ year old laptop, for example. And they just use it fine, sure it's pokey, and it's not everyone, but it's a lot.
The Italian government has just passed an emergency decree that authorizes AI-powered face recognition in public spaces without a judge's authorization.
I'm not even sure it's great at that. Is this not a function of any industry struggling to find a usecase eventually ending up with the largest US employer and cash cow: the DoD?
LLMs ('AI'), not so great, but it can get (probabilistic, but fascists don't care) descriptions of video feeds into easily searched text. Gobs of GPUs in datacenters paired with surveillance devices all over the place however presents a greater threat, where there's an (evil) will, a way will be forthcoming. Nice of Ukraine to point out how fragile they are. There's a deathstar analogy there somewhere.
Yeah, the type of people pushing this don't even care about the inaccuracy either. If it "catches a black man" with facial recognition, even if it's the wrong person it won't matter "they are all criminal thugs anyway." See also the ICE bull shit and basically deporting anyone even remotely Mexican looking, citizen or not.
This is my take as well.
Ai is a panopticon
Modern companies are only profitable in late stage capitalism if they fall into one of they two categories: scams or gambling.
No, this is pretty normal, and more importantly, doesn't actually cost the company cash. They gave lenders bonds that can be converted to stock, so this loss on their books is pure paper loss, the same way wealth in owning stock in this money losing company is pure paper wealth.
These numbers are just illustration for simplicity, but imagine a company borrowing $20 billion and telling the lender that you'll either pay back the $20 billion plus interest, or they can opt to convert it into stock worth 10% of the company. When the company is worth $100 billion, the bondholders won't convert to stock. But if the value of the company shoots up on paper to where that same stock would be worth $100 billion, the lenders would rather take the stock than the cash repayment. And because it's worth $80 billion more, the company will have to record that on the books as replacing $20 billion in bonds for $100 billion in stock, and an $80 billion loss compared to their last statement.
But look at the underlying financial cash flow. When that happens, the company actually takes $20 billion in debt off their books. They don't have to repay that loan anymore. So it improves their cash flow position at exactly the same time that they're booking a loss.
The whole thing will come crashing down for totally different reasons, relating to operational cash flow, not the actual accounting shenanigans where one kind of paper number gets converted to another kind of paper number.
While you explained this correctly (as far as I understand it), there is part of this everyone keeps making an assumption on the outcome, the "or they can opt to convert it into stock" part. I'm really curious what the interest rate they gave the early investors to entice them when the company was much further from a sure thing. If the interest rate was decent, that final number is going to start becoming awfully enticing to just collect on instead of getting stock that might collapse.
That's the tradeoff, of course. If a company liquidates, it pays its debts first, then its preferred stockholders, then its common stockholders. But each step down the line gives a greater upside in exchange for less certainty in getting paid at all. Bondholders get paid at higher priority, but have the exact amount they get paid defined by a specific mathematical formula. So they won't get any additional benefit from the company becoming super valuable. Or they can get in the back of the line to see what unlimited upside they have from the company's value going up a lot.
Also, Anthropic's bonds aren't exactly low interest. They're right there at the edge between junk bond and investment grade.
It's not entirely transparent though. It's a paper loss in terms of cash but they did have to give the stock. At their crazy valuations, even 1% is a big deal.
I dunno, isn't this the same scheme that the ride share companies and food delivery services?
With the difference that all those services mostly outsource their asset costs to their drivers or have very little investment there. Unlike anthropic who have billions in costs related to all the compute they need to service their customers (obligations to other companies, datacenters and, not to forget, ever rising interest on all their debt).
Definitely, the cost of doing business for these AI companies is orders of magnitude higher than Uber or Lyft
You mean the ones who had to massively pivot their entire business model, because they were relying on self-driving cars being practical in 2019?