Oracle and OpenAI Are Full of Crap
21 hours ago
- #Oracle
- #Cloud Computing
- #OpenAI
- Oracle's stock surged by over 39% despite missing earnings and revenue estimates, driven by a $317 billion increase in remaining performance obligations (RPOs).
- Analysts praised Oracle's performance, calling it a 'momentous quarter,' despite the miss, with some expressing shock in a positive way.
- Oracle is using RPOs as a marketing tool, projecting unrealistic growth and dominance in cloud computing, despite the inherent risks of contract cancellations and client defaults.
- OpenAI and Oracle reportedly signed a $300 billion deal starting in 2027, though details remain unclear.
- Oracle projects massive cloud infrastructure revenue growth, from $18 billion in FY2026 to $144 billion in FY2030, largely attributed to OpenAI.
- OpenAI's projected spending on compute is astronomical, with estimates of $88 billion by FY2029 and $110 billion by FY2030, nearly matching AWS's annual revenue.
- OpenAI's financial health is questionable, with leaked reports suggesting a $115 billion burn through 2029, though actual costs may exceed $290 billion.
- Oracle and OpenAI's deal is seen as an artificial boost to Oracle's stock, with skepticism about the feasibility of fulfilling the contract.
- The global AI compute market is estimated at $40 billion, with adoption trends declining, raising doubts about OpenAI's projected growth.
- Companies like Nebius, CoreWeave, and Oracle are struggling to build the necessary infrastructure to meet their contractual obligations, yet their stocks have risen significantly.