Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Oracle hit hard in Wall Street's tech sell-off over its AI bet

ft.com

Post reply on HN
Print view View original

11–20 of 202 posts

Re: Oracle hit hard in Wall Street's tech sell-off over its AI bet

#11

Post by zerosizedweasle »

epistasis wrote: post #10
zerosizedweasle wrote: post #8

I said this earlier but: It's interesting to see the market try to do anything to rally. The problem is you guys are rallying on the thought that you've scared the Fed into cutting rates, but actually by rallying you short circuit it. You ensure they won't cut. And that's how the market's lillypad hopping thinking is actually just stupidity. You rallied, so now there are no rate cuts so the crash will be even more br…

It's hard to have collective action against rallying when overall most people benefit by a general upward trend.

Yeah for sure but:

'It’s impossible to quantify how much cash flowed from OpenAI to big tech companies. But OpenAI’s loss in the quarter equates to 65% of the rise in underlying earnings—before interest, tax, depreciation and amortization—of Microsoft, Nvidia, Alphabet, Amazon and Meta together. That ignores Anthropic, from which Amazon recorded a profit of $9.5 billion from its holding in the loss making company in the quarter' - WSJ

Their earnings growth is their own money that they gave to OpenAI.

You have that waiting in the wings.

Re: Oracle hit hard in Wall Street's tech sell-off over its AI bet

#12

Post by AnimalMuppet »

hvb2 wrote: post #6
JCM9 wrote: post #3

I’m bullish on AI as tech but folks are starting to sniff out that the financials of everything going on at the moment aren’t sustainable for much longer. I hope we have more of a “reality correction” than full blown bubble bursting, but the data is increasingly looking like we’re about to have a massive implosion that wipes out a generation of startups and sets the VC ecosystem back a decade.

The tech is way underpriced right now. It's basically a subsidized market right now, with the money flowing in coming from the private sector. The problem here is that it remains to be seen who is willing to pay for the service once it's priced at cost or even with a margin. And based on valuations of AI companies one would expect a huge margin.

A huge margin or a huge market at a moderate margin. But yes, the net profit has to be huge.

Re: Oracle hit hard in Wall Street's tech sell-off over its AI bet

#13

Post by ForHackernews »

hvb2 wrote: post #6
JCM9 wrote: post #3

I’m bullish on AI as tech but folks are starting to sniff out that the financials of everything going on at the moment aren’t sustainable for much longer. I hope we have more of a “reality correction” than full blown bubble bursting, but the data is increasingly looking like we’re about to have a massive implosion that wipes out a generation of startups and sets the VC ecosystem back a decade.

The tech is way underpriced right now. It's basically a subsidized market right now, with the money flowing in coming from the private sector. The problem here is that it remains to be seen who is willing to pay for the service once it's priced at cost or even with a margin. And based on valuations of AI companies one would expect a huge margin.

It's hard for me to imagine paying real money for something that gives me a maybe-hallucinated answer that I need to check every single time. A flaky test is worse than a failing test.

Re: Oracle hit hard in Wall Street's tech sell-off over its AI bet

#14

Post by mistrial9 »

hvb2 wrote: post #6
JCM9 wrote: post #3

I’m bullish on AI as tech but folks are starting to sniff out that the financials of everything going on at the moment aren’t sustainable for much longer. I hope we have more of a “reality correction” than full blown bubble bursting, but the data is increasingly looking like we’re about to have a massive implosion that wipes out a generation of startups and sets the VC ecosystem back a decade.

The tech is way underpriced right now. It's basically a subsidized market right now, with the money flowing in coming from the private sector. The problem here is that it remains to be seen who is willing to pay for the service once it's priced at cost or even with a margin. And based on valuations of AI companies one would expect a huge margin.

> it remains to be seen who is forced to pay

via govt relationships, long term irreplaceable services, debt or convictions.. Also don't forget the surveillance budgets and the best spigots there, win.

Re: Oracle hit hard in Wall Street's tech sell-off over its AI bet

#15

Post by Mistletoe »

zerosizedweasle wrote: post #8

I said this earlier but: It's interesting to see the market try to do anything to rally. The problem is you guys are rallying on the thought that you've scared the Fed into cutting rates, but actually by rallying you short circuit it. You ensure they won't cut. And that's how the market's lillypad hopping thinking is actually just stupidity. You rallied, so now there are no rate cuts so the crash will be even more br…

The market can rally hard into the idea and dream of zero interest rates put in place by whatever stooge replaces Jerome Powell. I think we aren’t at the top, but will be in May 2026 when that happens. The tariffs will probably be declared illegal by then also. Tops come when everything is optimism and it seems like nothing but blue skies ahead. I don’t think anyone felt optimistic in 2025, it was a time of extreme uncertainty and turmoil.

Re: Oracle hit hard in Wall Street's tech sell-off over its AI bet

#16

Post by danielbln »

ForHackernews wrote: post #13
hvb2 wrote: post #6

Earlier quoted context omitted.

The tech is way underpriced right now. It's basically a subsidized market right now, with the money flowing in coming from the private sector. The problem here is that it remains to be seen who is willing to pay for the service once it's priced at cost or even with a margin. And based on valuations of AI companies one would expect a huge margin.

It's hard for me to imagine paying real money for something that gives me a maybe-hallucinated answer that I need to check every single time. A flaky test is worse than a failing test.

_sigh_

Yes LLMs hallucinate, no it's no longer 2022 and ChatGPT (gpt-3.5) is the pinnacle of LLM tech. Modern LLMs in an agentic loop can self correct, you still need to be on guard but if used correctly (yes, yes, holding it wrong etc. etc.) can do many, many tasks that do not suffer from "need to check every single time".

Re: Oracle hit hard in Wall Street's tech sell-off over its AI bet

#17

Post by chollida1 »

Its worse for some other "ai" related companies.

Coreweave for instance, now has its CDS trade around 600bp, which is a 1/3 rise in 2 months, which implies that the probability of a default in 5 years is 40% at a 40 cent recovery rate.

That makes Coreweave's credit rating the equivalent of CCC-, which aint good.

Re: Oracle hit hard in Wall Street's tech sell-off over its AI bet

#19

Post by neom »

chollida1 wrote: post #17

Its worse for some other "ai" related companies. Coreweave for instance, now has its CDS trade around 600bp, which is a 1/3 rise in 2 months, which implies that the probability of a default in 5 years is 40% at a 40 cent recovery rate. That makes Coreweave's credit rating the equivalent of CCC-, which aint good.

Yeah, and then the Canadian government handed hundreds of millions to the kids at Cohere who have now gone spent it on Coreweave. When it was all announced I was very very vocal that using an inexperienced startup for the sovereign compute capabilities seemed a very poor choice. I'm so curious to see how this all plays out.

Re: Oracle hit hard in Wall Street's tech sell-off over its AI bet

#20

Post by FL33TW00D »

chollida1 wrote: post #17

Its worse for some other "ai" related companies. Coreweave for instance, now has its CDS trade around 600bp, which is a 1/3 rise in 2 months, which implies that the probability of a default in 5 years is 40% at a 40 cent recovery rate. That makes Coreweave's credit rating the equivalent of CCC-, which aint good.

Very interesting data point
Post reply on HN