Five Tech Giants Are Using Enron’s Accounting Strategy to Conceal $1.65 Trillion in AI Debt
https://www.yahoo.com/finance/technology/ai/articles/five-tech-giants-using-enron-184404206.html
Five Tech Giants Are Using Enron’s Accounting Strategy to Conceal $1.65 Trillion in AI Debt
https://www.yahoo.com/finance/technology/ai/articles/five-tech-giants-using-enron-184404206.html
19 Comments
I’m sure this will lead to GREATNESS
To be clear for the uninitiated, this isnt why Enron failed.
Enron collapsed because they lied about any of this stuff existing amoung other fraud they committed.
2008 crisis all over again. Except it’s not mortgages that are being handed out willy-nilly, it’s huge loans to technocratic maniacs.
These companies are deeply embedded with government. The odds of their failure is very low… But only because they would likely get bailed out in the event of a crash – again, reminiscent of the 2008 crisis.
Oh ffs, this isn’t Enron style “max to mark to market” this is leases and purchase contracts. Leases and purchase contracts are off balance sheet liabilities per GAAP. Service in these amounts to about 7% of revenue per year, and only really Oracle is in any danger from this.
People who have no idea what a balance sheet is or how to run a company are drawing wild unfounded conclusions.
>Meta is the sole tenant but argues it needn’t record that debt because the entity — not Meta — bears the risk.
But isn’t that the way it works. If Meta bears the risk they need to disclose it, if they don’t bear the risk then they don’t need to disclose it.
I guess the question is if banks are really loaning that much without capital or any claim against Meta.
>If AI monetization underperforms, those assets face write-downs, with losses flowing directly to the lenders, insurers, and bond investors who funded the structures.
Sounds like something the lenders should be recording on their accounts rather than Meta.
Hence why they jacked up PC part prices. They are haemorrhaging cash and since nobody is making anything compelling anymore, not that anyone has money to spend anyway.
It’s all just grift after grift. Capitalism has long collapsed. Maybe humanity should stop praising sociopaths and sycophants?
It didnt help that Enron’s CEO Jeff Skilling called a hedge fund analyst an asshole on a quarterly earnings call either.
Conceal is the word choice?
All I know is that when this all implodes there can be no bailout.
This comment section really exposes how little the sub knows about accounting, fraud, or business.
Tick, tick, tick…
Pure clickbait. Enron’s crime was illegal concealment. Big Tech’s AI commitments are fully disclosed in broad daylight under ASC 842, ASC 810, and SOX mandates.
Ironically, the article proves post-Enron rules work as intended. If they were actually using Enron’s strategy, no one would be able to pull $1.65 trillion straight out of SEC footnote disclosures.
Oh yes, the Enron strategy! The one that famously worked! Nothing wrong with Enron’s books.
Yes they are and I am glad it is finally gaining some visibility. They have been doing it since day one. Have to include xAI in that as well. They are hiding their losses under SpaceX.
Don’t worry. Trump will keep the grift going, until he leaves office and it all collapses. Obaaaamaaaaa!!
Where does the # $1.3T Total Reported come from? The math suggests $550B. What gives?
No, they’re not. Enron was fraud, this is just accounting 101.
Should I not get a new job right now what the fuck is going on why is this happening
That’s not what Enron did. Enron did mark to market accounting where they reported the full intended worth of a contract as fully paid when it actuality it might not have panned out and they took losses. They reported the full intended income on the books regardless. Yes, they moved the debt in a similar manner BUT they also hid it so you couldn’t find it. They also did a bunch of other shady stuff like moving company money to shell companies and then having said shell companies buy Enron stock and report it as profit.