Oracle is the one to look out for if/when the bubble bursts. Most of the big tech will be fine, albeit hurting for a while. For Oracle, this might be existential.
Oh god, that'd be finally some good news in this recent brutal and sad time period.
Oracle is underwater on its $300B OpenAI deal
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Re: Oracle is underwater on its $300B OpenAI deal
#42Earlier quoted context omitted.
Google also has $100 billion in profit each year from it's core business to wait out OpenAI.
And the search engine and crawler actually powering these LLMs
How is that not a conflict of interest by the way, when Google's AI search results prevent the websites it trained on from getting clicks?
Re: Oracle is underwater on its $300B OpenAI deal
#43FT uses "underwater" because the deal was $300 Billion and the stock has lost $315 Billion in market cap since the deal. That's a bit of a stretch, but the rest of the article is very good.
Re: Oracle is underwater on its $300B OpenAI deal
#44One must love the projections of >50% YOY growth for 5 straight years. Why not continue for the next 5 ? Maybe they will find customers on Mars. This while situation is very strange - there are some big companies pouring tens of billions into it (Alphabet, Meta) - since they don't have anything better to do with the money printers they have, but there are several others whose valuations are based on completely unreal…
Traditionally one is supposed to return money you don’t have anything better to do with to shareholders in dividends, but that is sadly out of fashion with tech companies.
Re: Oracle is underwater on its $300B OpenAI deal
#45The market (over)reacted to the OpenAi announcement sending Oracle’s share price up and now may be overreacting to Altman’s interview with an investor pushing their stock price down. And we are measuring (what seems like) a non-binding investment against market cap which swings everyday.
Re: Oracle is underwater on its $300B OpenAI deal
#46It’s looking like Google may outdo OpenAI. ChatGPT has brand recognition and adoption, but not the best product anymore.
What is the cost of delivering regular search results vs. answering an AI chat question? How do you sell ads through each of these channels?
If you consider those angles you'll see that Google does not want AI chat to replace Google search any time soon. Google is being dragged into this kicking and screaming. They are damned if they do, and damned if they don't.
Re: Oracle is underwater on its $300B OpenAI deal
#47It’s looking like Google may outdo OpenAI. ChatGPT has brand recognition and adoption, but not the best product anymore.
Unless I’m missing something, Google doesn’t really have the “chat journal” aspect that ChatGPT has. It’s just a search engine. For me personally this is a major feature.
NotebookLM?
Re: Oracle is underwater on its $300B OpenAI deal
#48Oracle has no IP in this deal. All they are doing is unpacking Nvidia servers, plugging it in, and keeping them cool. They get 15% markup for this.
Re: Oracle is underwater on its $300B OpenAI deal
#49One must love the projections of >50% YOY growth for 5 straight years. Why not continue for the next 5 ? Maybe they will find customers on Mars. This while situation is very strange - there are some big companies pouring tens of billions into it (Alphabet, Meta) - since they don't have anything better to do with the money printers they have, but there are several others whose valuations are based on completely unreal…
Traditionally one is supposed to return money you don’t have anything better to do with to shareholders in dividends, but that is sadly out of fashion with tech companies.
Alphabet at least returns capital via huge buybacks that effectively act as dividends, but with more tax efficiency.
Re: Oracle is underwater on its $300B OpenAI deal
#50One must love the projections of >50% YOY growth for 5 straight years. Why not continue for the next 5 ? Maybe they will find customers on Mars. This while situation is very strange - there are some big companies pouring tens of billions into it (Alphabet, Meta) - since they don't have anything better to do with the money printers they have, but there are several others whose valuations are based on completely unreal…
Traditionally one is supposed to return money you don’t have anything better to do with to shareholders in dividends, but that is sadly out of fashion with tech companies.
Why would it be in fashion? If you want the money, then sell your shares and don't cause a taxable event for everyone else.