However what it does allow all these companies investing to do is fund significant capital expenditure but hide it on their balance sheet. They all know if they funded capex directly it would create a deprecation storm that would tank their future earnings. Instead they give the money to another entity to do the building and magically it’s (the equity) now just an asset on their balance sheet with no deprecation. It’s “worth” a lot as a line item there, but only because the hype driving this financial engineering keeps the shares valuable.

Meanwhile the startup isn’t public and thus the fact that it has this massive deprecation on the books is mostly out of sight and out of mind, with some random sky high valuation that’s not based in any normal sense of business reality.

That all works great… until the bubble busts of course.

Labor and land is expensive, energy is scarce and expensive, and colocation is not that valuable because latency is dominated by compute instead of transmission.

But there must be a good reason I am missing.