Craving a Token Piece of the Rock?

Is there a tokenized investment in your future? With so many white elephants to unload, Wall Street’s rep could come calling on you at any time. He will offer you a virtual piece of America’s future, claiming it will grow wealth for your children and grandchildren. However, when you sit down with this cheery fellow to go over the fine print, just remember that his brain is nearly identical genetically to that of the seagull that swoops down on your lunch at a seaside café.

And exactly which piece of the rock will your hard-earned dollars secure? Almost certainly, the pitch will feature commercial real estate or AI infrastructure. The latter will include not only huge power plants and water coolers, along with acres of computers, but all the hot air exhausted by a Billionaire Boy’s Club that has been hustling some of the most ambitious projects the galaxy has ever seen.

Hot Air for Sale

Obsolete skyscrapers and AI’s overhyped revenue potential are the chief sources of anxiety in banksters’ portfolios these days, with notional sums at risk of perhaps $20 trillion or more, and growing. All of it has been financed to colossal excess by banks that have grown understandably eager to spread the risk onto rubes like you and me. Voila, the tokenized investment! That’s why tokens were invented: to divvy up epic chunks of glitz into a million pieces small enough for the little guy to get in on the action.

He needn’t worry about being shut out, since the deals just keep coming. So greedy and stupid are the lenders that they are still hatching galactically large projects even as warning signs flash red. Oracle’s partnership with OpenAI, for instance. This gambit is slated to launch in 2027 at a value of $500 billion. The two companies would build data centers with 4.5 gigawatts of capacity, a tad less than New York City’s annual usage. Will the demand be there? Everyone on the sell side of the equation sems to think so, but the view is not so optimistic among highly paid tech workers whose jobs are becoming obsolete these days by the tens of thousands.

Skyscrapers Are Dead

Real estate will be a tougher sell for Wall Street’s seagull-brained predators, since all of us understand that workers will never return to urban office towers. Their employers cannot successfully order them back, either, since, for reasons of cost and competitive pressures, most big companies no longer do business out of center-city skyscrapers. Still, there the buildings sit, urgently in need of hucksters to spread the cost of perpetually financing and maintaining them over however many Millennials and Gen-Xers are fortunate enough to have savings to invest.

Thus, tokenized investments. It’s curious that this meme is being plumped for such an ambitious pitch, since we commonly associate the word ‘token’ with things that have no substance. As such, you could say that the sales force about to hit the streets with tokenized shares of office towers and AI infrastructure is like a belled cat, well exposed before they knock on your door. When they arrive, keep the latch on and make them explain, exactly, what they are selling. (More on the coming AI job bust: Check out my latest interview with Jim Goddard on This Week in Money.)