The duopoly AI labs haven't technically borrowed much, but a metric ass-ton of money has been borrowed by various other entities in service of them as infrastructure proxies.
That's what is driving up the cost of debt and teetering some of these companies into junk status.
Investment isn’t debt, but investment and debt demand revenue in functionally identical ways, and OpenAI has taken an enormous amount of investment, so they are subject to broadly the same pressures as a hypothetical company that had borrowed lots, no?
> investment and debt demand revenue in functionally identical ways
No they don't.
A company has legal obligation to pay loans at the agreed rates.
There is legal obligation that defines rates of return beyond "acting in shareholder interest" (and OpenAI is a public benefit corporation so even this is reduced).
So all those hundreds of billions of dollars investors ploughed into OpenAI was just a gift was it? No expectation of a return of any kind? What if that investment money was originally borrowed by the investors?
If the money was borrowed it would have to be paid at an agreed rate.
Because it's an investment it is risk capital. They won't be happy if they don't get a return but their return is part ownership in the company, not a legal contract giving an income stream.
Right, but all those shareholders and investors will be putting pressure on the company make returns. Its only a matter of time before this pressure affects the boards decisions.
That’s 22 million of capacity foregone for a marketing stunt. Or they had more capacity than demand which seems odd for a product that’s allegedly in constant demand etc.
There just isn’t a sane way to look at this as “investment”
Investment isn't debt.