ongoing by Tim Bray · After the Bubble

GenAI companies are facing two critical vulnerabilities that will leave little salvageable value after the inevitable bubble burst: GPUs degrade rapidly under intensive workloads and consume massive amounts of electricity, creating expensive-to-maintain infrastructure unlike previous bubbles that left behind useful assets, while tech giants are using Special Purpose Vehicles to hide hundreds of billions in data center financing off their balance sheets—financial engineering that masks the true debt burden of their AI expansion. Unlike historical bubbles that left valuable infrastructure in their wake, the post-AI bubble hangover will be characterized by stranded, costly-to-operate assets with limited alternative uses and obscured financial liabilities.

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