This hopefully helps mitigate the risk of putting more production capacity in place, which the Big 3 were not willing to do so far.

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pjc50 9 hours ago | parent [-]

At this size, I think we have to start worrying about a 2008-type default risk. AI companies will have ordered all the RAM and paid some kind of deposit for that, but actually taking delivery and paying for it is still in the future and the sums of capital involved are extremely large.

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nixon_why69 9 hours ago | parent | next [-]

Also there is a ton of debt flying around, its not just equities hurting VC funds, real banks are facing risks now.

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inigyou 9 hours ago | parent | prev | next [-]

That's the reason RAM companies aren't expanding. Worst case, they can sell their normal production to gamers.

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londons_explore 8 hours ago | parent [-]

Fail to deliver, and they get bankrupted...

Do deliver and they don't get paid because the buyer purchased with money that doesn't exist.

Lose-lose situation!

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inigyou 8 hours ago | parent [-]

But they don't get bankrupted, because it's an ordinary year for them, only with different customers.

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londons_explore 8 hours ago | parent [-]

Fail to deliver, and they get bankrupted because a court would not simply unwind the deal - a court would demand compensation of the market price of the goods not delivered on delivery day - which will probably be very high.

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eru 8 hours ago | parent | prev [-]

What kind of default risk?

What we got in 2008 was central banks (eg Fed and ECB) willfully collapsing nominal GDP in their economies. Have a look at the dot-com bust or Black Monday for comparison.

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pjc50 8 hours ago | parent [-]

> willfully collapsing nominal GDP

What on earth are you talking about?

The credit risk was a very real problem; Kaupthing, Anglo Irish, RBS, Lehman etc.

	▲	eru 8 hours ago \| parent [-]
		We just had a string of bank failures, like Silicon Valley Bank, but you will not see any impact in the macro-economic data (like unemployment), because the Fed kept nominal spending on track. In 2008 they didn't. Instead they actively tightened monetary policy by eg introducing interest on excess reserves. The ECB even hiked interest rates. Companies defaulting on debt doesn't need to bring down the economy. For the US, you can also see how the construction sector had been winding down for years (eg as measured in construction employment) without an impact on overall unemployment. The crisis was entirely avoidable. See https://www.cato-unbound.org/2009/09/14/scott-sumner/real-pr... for a bit more background.