Authored by Patrick Feeley via Substack,
Private credit is financing the AI buildout against collateral with a short clock, and I think Washington ends up holding the risk...
Karp's logic
Alex Karp, one of the most contrarian CEOs ever, spent September making an argument most of the market has not yet absorbed, and I am writing this because I think it applies one layer further down the stack than he took it. I admire the way he reasons. He holds a doctorate in social theory from Goethe University Frankfurt, and it shows in a habit I find rare among technology chief executives, which is to treat the state and the tech industry as one system and to say plainly what the people inside it prefer to leave unsaid. His 2025 book The Technological Republic, written with Nicholas Zamiska, argues that the software industry has to work with government, and it asks leaders to preserve space for ideological confrontation and to risk the disapproval of the crowd. As I read him, the frontier labs carry liability too large for any public market to hold, so the only buyer of that risk is the sovereign. He told CNBC the only way to deal with that liability is "to go to the government and say, nationalize us, please". I think he is right, and his reasoning reaches well past the labs to the debt that built the buildings the models run in.
The AI buildout is being financed by private credit, against collateral that loses most of its value in four to six years, leased to a handful of tenants. When the first large tenant walks, lenders will discove
