Since the end of last year, the private loan market has been unstable...
I've also come across many articles about private loans, but I didn't know the details very well, so I'm sharing a good video that was uploaded. It's a 1-hour video, but if you watch all of it, you can understand private loans well.
This wasn't shown in the video, but here are the parts I'm most concerned about.
It seems that a significant portion of big tech companies' AI CAPEX investments this year are being made through private loans.
However, as the private loan market has shrunk due to the increased risk of defaults among software companies starting from the end of last year, it seems that big tech companies' capital procurement will become quite difficult this year. OpenAI has already announced that it will cancel a significant portion of its planned investments. If big tech companies' CAPEX investments shrink, there's a possibility that a considerable amount of bubble could burst in memory demand forecasts.
And another thing is that private loans invested in AI data centers themselves will become huge potential bad debt piles. Right now, big tech companies are competitively investing massive amounts of capital in data centers, and I believe only a small number of these companies will achieve break-even or better. I think the rest will eventually fail to recover their funds and will be merged or go bankrupt, leaving substantial bad debts in private loans. This is because AI data center CAPEX spending this year alone ranges from 600 billion to as much as 1 trillion dollars, and no matter how quickly AI services spread, I don't see a way to recover such massive funds in the short term.
After the U.S.-Iran war issue dies down, I'm sharing this because I think it could become one of the biggest topics in the second half of this year.
