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The House of Ellison Is on the Brink
2 months ago
- Larry Ellison briefly became the world's richest man due to Oracle's $300 billion AI contract with OpenAI, but his fortune has since dropped by $213 billion as Oracle's stock collapsed.
- Oracle's credit rating is one notch above junk, and its $300 billion contract relies on OpenAI, which is unprofitable and burns billions annually, raising concerns about circular financing among tech giants.
- The AI economy involves circular deals where companies like Nvidia, Microsoft, and CoreWeave invest in each other, reminiscent of Enron's accounting devices, with risks of a bubble and potential recession.
- Ellison's son's $110.9 billion acquisition of Warner Bros. Discovery is blocked by a federal judge, while the family-owned CBS News faces declining ratings and staff departures.
- China's DeepSeek and other firms offer AI models at 87 cents per million tokens, undercutting U.S. prices and challenging the monopoly pricing needed to sustain massive AI investments.
- Ellison's heavy financial backing of Israel and political causes has led to boycotts and audience loss for his media properties, amplifying the risks of his empire's collapse.
- The entire House of Ellison relies on Oracle equity, which is tied to the OpenAI deal and the AGI story, now threatened by credit downgrades, legal blocks, and price wars.
How OpenAI Kills Oracle
2 months ago
- On January 21, 2025, Oracle CEO Larry Ellison, SoftBank CEO Masayoshi Son, and OpenAI CEO Sam Altman announced the Stargate project with President Trump, a $500 billion AI infrastructure venture in the U.S. claiming to create over 100,000 jobs.
- Stargate LLC has never been formed after 15 months; SoftBank and OpenAI have contributed no capital, and no government money or funding has been deployed, raising suspicions of a marketing conspiracy among the companies.
- The project's only real component is a data center campus in Abilene, Texas, which was initially for xAI before Elon Musk pulled out; Oracle now builds it with only two of eight planned buildings operational and behind schedule.
- Oracle is heavily indebted, raising over $38 billion in project financing for data centers in Wisconsin and Shackelford, keeping debt off balance sheets, while its core businesses plateau and cashflow is negative $24.7 billion.
- OpenAI, the single tenant for all Stargate data centers, is expected to lose over $167 billion by 2028 and cannot pay Oracle for compute; it also has massive commitments to Amazon, Microsoft, and others totaling hundreds of billions.
- All Stargate data centers are far behind schedule; Abilene won't finish before April 2027, and other sites are barely started (e.g., patches of land with few steel beams), with completion unlikely before 2029.
- The analysis concludes Stargate will bankrupt Oracle unless OpenAI becomes the most profitable company ever within two years; GPU capacity will be obsolete before debts are repaid, and Ellison's personal loans ($20 billion) collateralized by Oracle shares risk margin calls.
Premium: The Hater’s Guide To Oracle (Part 2)
2 months ago
- Oracle's profitability and growth are myths; it is actually in a death spiral sustained by acquisitions, debt, and customer exploitation.
- Revenues have only grown through major acquisitions like Sun Microsystems and Cerner, with Cerner's lower margins hurting profitability.
- Oracle has spent over $99 billion on AI GPU capex since 2020, leading to negative free cash flow for the first time since 2001.
- The company's cloud infrastructure is a latecomer, only boosted by AI GPU demand.
- Oracle's massive commitment to build 7.1GW data center capacity for OpenAI is financially dangerous and likely unsustainable.
- The article concludes that Oracle is dying and AI will be the final blow.

oracle

The House of Ellison Is on the Brink

How OpenAI Kills Oracle

Premium: The Hater’s Guide To Oracle (Part 2)