> If that happens the AI companies will first try to negotiate with their creditors and after that likely declare bankruptcy with the creditors taking over what’s left of the assets.

Due to the fact that we’ve already done this before (Enron, Global Crossing) -

I’m willing to bet that there are contracts in place ALREADY, that define what happens in the event of a default.

In particular, I’ll bet that the buildings, the GPUs, the patents, etc…

All of these have probably been accounted for.

I worked at a data center that closed during the WorldCom era, and when they put the padlocks on the door, there were still websites “hosted” from the building.

I don’t know if they killed the power or what. I’d cleared out my desk long before they locked it all up. I wouldn’t be surprised to learn that these websites couldn’t get their own servers, since ownership was tied up in the courts.

In the Bay Area during that time, there were row upon row of empty office buildings.

And then the US government will say that these company's futures are in the national interest, and they will be bailed out with taxpayer dollars.

Hence the IPO. Push the risk on to retail and index funds, away from private credit. Plus Microsoft, Google, and Amazon will also be holding the bag and have huge balance sheet write downs, the compute commitments have not yet been paid for it's all just promises.

The banks aren't has exposed this time, as in 2008, most of it is tied up in private credit, its more akin to the fiber buildout in the 90s.

Yep, if they make it to IPO, as SpaceX has, and if they manage to get into several indexes (as SpaceX is already doing, I assume it's already in the Russell indexes, and will soon be in the Nasdaq 100 index), it'll be a bunch of working class people's retirement accounts holding the bag. And, those same companies might be deemed Too Big To Fail, and they'll get even more working class folks money in the form of tax-funded bailouts.

A wealth transfer from the working class to a handful of billionaires bigger than any the world has ever seen (and the world has seen a lot of wealth transfer from the working class to billionaires).

Probably 401 (k) plans for the most part.