The AI Pump & Dump – How It’s Going To Work
The issue with AI at the time of writing is the cost of the data centres. Billions needed to invest, limited revenue. Obviously unsustainable hence why an AI pump and dump is likely. This article explains the mechanics and how things will look when the process is completed.
AI Data Centres
These cost billions, and likely will never recoup their initial cost. Some AI companies will create separate companies (Let’s call them Y’s) who will build and own these data centres. When it becomes obvious that the debt is in no way serviceable the Y’s will declare bankruptcy and their assets will be sold off for pennies on the dollar.
Then the AI companies themselves will buy these data centers at pennies on the dollar and hence make their business sustainable.
How Can AI Companies (The Data Centre Customers) Be Sure They Will Win?
How can they be sure that their bids on the distressed assets (the bankrupt Y’s data centres) will be accepted?
Because the AI companies are these data centres biggest customers. If they don’t win the bid, they will leave. In effect, the AI companies will be the only ones bidding on these data centre assets.
Who’s Getting Shafted?
Where are the Y’s going to be getting the money to build these data centres?
Bonds. And these bonds will be bought by pension funds, government investment funds, index funds and so on. Any funds which manage the money either of people who have no interest in their investment activities and/or funds which people have no choice but to pay in to eg government pension funds.
Yes these funds are going to take a massive hit, but who is going to say anything? Most people don’t even know where their pensions are invested and most don’t even have the power to move the money. The little guys are going to end up paying and answer will be “it’s the free market”, investments can go up as well as down. Classic pump and dump.
The End Game – AI Pump & Dump
The data centres have been built, the general public has lost billions investing in a stupid asset, the AI companies have taken possession for pennies on the dollar. And the AI companies move on with their lives.
They have billions of assets (which they would have in no way have been able to afford) because they acquired them for pennies on the dollar. And because of this their (AI) business models all of a sudden have a prayer of being viable.
