16 AWG speaker wire is meant for low-current applications (you know.. speakers). Its sheathing isn't designed for high-heat, high amperage enviroments such as a PSU housing.
Thin wire = high resistance = higher heat = catastrophic failure (and lots of lol) especially if you try to braid it. The reason power supply cables get away with it, is they use uh.. I forget the word, but the outside sheathing is designed for the amperage involved.
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