Tag: GOOGL

Has AI become worse than debilitating and inflationary?

The first obvious problem was destroying kids, who are already in trouble, who started to use it for their homework, and this is the result:

I teach calculus at Berkeley. Some of my students can’t do middle school math

We asked students on the beach SIMPLE questions about America… the answers somehow got worse and worse 😳🤯

“FLORIDA is a state that borders CALIFORNIA” 😑❌

“Supreme Court Justice AMY….. WINEHOUSE”🎶

“Our Vice President is J…..K ROWLING”⚡️

“The 3rd branch of government is… pic.twitter.com/7HST2xUIxD

— Jesse Watters (@JesseBWatters) August 18, 2026

Then, because it is so resource intensive and inefficient, it drove up the cost of power. Then the cost of memory and other inputs for consumer goods. It is so problematic, U.S. companies now want to use China as a source of memory, which makes the problem we are trying to get out of even worse. 

It has not caused any noticeable increase in productivity, at all. 

Now it is so capital consumptive, it is driving rates up (and therefore the deficit). There is not enough money in the world for all of this, plus excessive government spending. Google ($GOOGL) is now resorting to selling debt, again, but now it is in Australia (as mentioned yesterday in “More Tales: Kangaroo Bonds“).

🦔AI companies have borrowed so much money this year that they're pushing up interest rates for the entire economy. Nomura estimates tech borrowing alone now equals 25% of what the US Treasury issues in bonds, five times more than last year. Bank of America says the surge has… pic.twitter.com/5Z0sNtlwQt

— Hedgie (@HedgieMarkets) August 17, 2026

And all the garbage being put into the financial system. If this goes upside down, the amount of damage that will be done is not even measurable. Collateralized AI credits, who knows where this will be stuffed. And they are changing the rules to allow this to happen?

Read the whole thread (below). The key section is on how it will be securitized and the rules were changed to allow for this:

Here's the real reason the A.I. boom is going to run out of capital. It's the same reason why rates are rising. And it's exactly why there's suddenly a mad scramble for capital in A.I. Equity values will fall as the cost of capital increases 20%-30%. But that's only the…

— Porter Stansberry (@porterstansb) August 11, 2026

Forget CDOs, Meet CCOs: This Isn’t A Tech Cycle… It’s 2008 With Silicon

But all is well (source: Animal House)!

Position: None

Jeez Louise …  now Alphabet ($GOOGL) needs to sell debt in Australia to fund the AI spend?

This could imply that Alphabet is worried the U.S. debt markets inability to supply what they need at the price they want. 

It is all so odd. On top of the fact that Alphabet and the rest of the hyperscalers need so much money to fund the capital spending frenzy we have this:

With financing needs increasing, technology companies are going further afield to access funds. Alphabet has mandated investment banks to work on an Australian dollar bond issue. It is considering 3,5, 10, and 20 year bonds although the size has not yet been announced. Alphabet raised USD25bn in dollar bonds earlier in August following an almost USD85bn equity capital raising in June. “Kangaroo” bond sales from foreign issuers in Australian dollars are already at a record high of about AUD60bn so far this year, up roughly 40% from 2025 levels.

 Positions: None.