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

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

#31

Post by softwaredoug »

next_xibalba wrote: post #26
softwaredoug wrote: post #18

Maybe we can avoid an Ellison buyout of Warner Brothers.

Why do we care if his son buys WB? Better if Disney buys it?

Largely because Warner Brothers is a good movie studio buried in a terrible corporation. It’d be sad to see it go away.

WB going away or shrinking likely reduces Hollywoods movie output, consolidates the industry, makes it less competitive and reduces opportunity for talent.

In a different world WB the studio is a successful standalone company not burdened with debt due to Zaslovs idiotic bets.

(And Ellisons overpaying for it is probably the most serious buyer. It’s the only reason it’s a topic. I’m skeptical of other transactions)

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

#33

Post by neom »

helloooooooo wrote: post #27
neom wrote: post #19

Earlier quoted context omitted.

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.

Cohere is doing a lot of enterprise AI business, and a lot of business directly with the federal government. They are also not juiced up in these financial games that OpenAI or Oracle are playing. Additionally, Cohere is no less “kids” than Anthropic or OpenAI. Aidan was literally one of the co-authors of “Attention is all you need”.

No doubt some amazing engineer's work there, but there are little to no adults in the room at that business as far as I can see, and sure they like to tweet about how well they are doing, and I keep hearing this line that they're selling to enterprise, uh, who, Canadian tire? If they actually have more than $150mm in revenue I'd be amazed, and $150mm revenue is still, not at all impressive.

https://www. theinformation.com/articles/openai-challenger- cohere-fell-85-short-early-revenue- forecast

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

#35

Post by moduspol »

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.

At this point I'm just hoping we can continue to postpone reality until after Christmas.

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

#36

Post by mjr00 »

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 most sobering statistic I've seen is that the entire combined amount of consumer spending on AI products is currently less than the revenue of Genshin Impact.

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

#37

Post by andrepd »

fullshark wrote: post #22
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…

Market is rallying cause there is too much money chasing too few assets. PE ratios will not drop significantly baring catastrophe and then financial contagion. After that happens the money printer is turned back on and then...

I don't see a way out besides massive reconfiguration. We've been living in this world since 2008 and the train shows no signs of stopping, only speeding up.

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

#38

Post by bobbiechen »

mjr00 wrote: post #36
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 most sobering statistic I've seen is that the entire combined amount of consumer spending on AI products is currently less than the revenue of Genshin Impact.

Indeed, bad for consumer AI. But I would expect B2B spending on AI dwarfs consumer spending, I wonder what that comparable B2B revenue would be.

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

#39

Post by energy123 »

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.

You're saying the unit economics are bad?

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

#40

Post by jesuslop »

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.

I like the logic you use, let me borrow that.
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