Here's How the AI Crash Happens; The Atlantic

[paleotn]

14. We may already have built way too many data centers.

AI isn't playing out as the productivity driver it was hyped to be. In fact, it's become the butt of jokes. And the problem isn't the tech giants. It's the hedge fund, shadow banking system that's leveraged to the hilt, and investors globally who've bought securities based solely on Meta and Amazon's willingness to keep paying leases on all those data centers they may not need and may never need.

When it becomes uneconomical for Meta, Amazon, Microsoft, et al., to continue those leases, for whatever reason, the music stops. If those giants decided to keep paying ( that being the lesser of two evils ) it's a massive, unproductive financial drain on their bottom lines. And the securities based on that stream of lease payment income become zombie investments. Collapsed in value but not gone to zero. Simply waiting for some other economic shock to figuratively shoot them in the head and wipe out bottom feeding speculators.

And all of this DOES NOT occur in a vacuum. You'd think that after the sub prime collapse, people would finally, FINALLY realize that everything in the global financial system is interconnected in one way or another. Financially, if a butterfly flaps its wings in Singapore, the S&P might just collapse in New York and an Icelandic bank goes belly up. So much we should have learned, should have firewalled, should have regulated, but didn't. And once again, it will be average people who pay the highest price. It sure as shit won't be Jeremy Iron's character in Margin Call or Zuckerberg the cyborg.