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S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

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Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#71

Post by lelanthran »

boron1006 wrote: post #51
hobonation wrote: post #4

Is it me or do none of the AI companies have a "moat" in the Ben Grahmm sense. I use their services, but I frankly don't care who provides it. I'll chase the chepest/best and have no issue switching from one to another. The only moat I can see is Microsoft providing its services to companies in its Azure system. Nervous IT departments probably like that it's not leaving their control if Bob in the SAP team spins up s…

I think anthropic with its enterprise strategy and google with its integration in everything have a bit of a moat. But I switched from ChatGPT to Claude 3 months ago because my account was down for like 6 hours. I haven’t used it since. It’s too easy to switch away from chatbots on a whim. There is no moat for that.

> I think anthropic with its enterprise strategy and google with its integration in everything have a bit of a moat.

But... Anthropic doesn't have a moat. It's clear at this point that SOTA models are not a moat, and Opus 4.6-level (or GLM 5.2) is sufficient.

Google, though... they own the entire vertical, from the semiconductors to the end-user software. They may have a moat.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#73

Post by llm_nerd »

ceejayoz wrote: post #7
measurablefunc wrote: post #2

What happens when Oracle can't pay the interest on their loans?

They'll use their purchases of TikTok and Paramount to campaign for a bailout.

Campaign? They're friends of the administration, and the US is firmly in the kleptocracy stage now (the last wrungs of democracy are about to be undone this Thursday evening).

They'll give a bribe to Trump, they'll offer up 5% of the stock to Chairman Trump as the People's Stock now that the US is basically a bizarre oligarchy form of communism, and Oracle will be declared a state enterprise that cannot lose money.

The super rich simply do not fail, and they utterly control every aspect of the US now, exactly as the people apparently wanted.

Americans are in a state of profound denial, but things are about to become very real, very quickly.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#75

Post by jagged-chisel »

cmiles8 wrote: post #31

Market signals on an impending AI bust are broader than just Oracle’s woes. For example, Amazon just had a challenging bond offering where the market is clearly starting to seriously question the ROI on all this money being pumped into AI buildout. That does not bode well at all for AI-only companies without broader cash flow from other businesses. And when the cash dries up this whole thing comes crashing down like…

I was at the ophthalmologist for the second time in two weeks - my new prescription wasn't quite right, new lenses should be here this week.

All that to say: I had to move my focus around a bit and re-read "...pumped into AI buildout." several times, because I thought I was reading Ed Zitron :D

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#76

Post by lelanthran »

nradov wrote: post #41
hobonation wrote: post #4

Is it me or do none of the AI companies have a "moat" in the Ben Grahmm sense. I use their services, but I frankly don't care who provides it. I'll chase the chepest/best and have no issue switching from one to another. The only moat I can see is Microsoft providing its services to companies in its Azure system. Nervous IT departments probably like that it's not leaving their control if Bob in the SAP team spins up s…

The moat is shifting from technology to access to proprietary training data. It doesn't matter how good your LLM platform is if you don't have good data to feed the training run. Public Internet data and published media is already mined out. Now the frontier LLM vendors have shifted to licensing proprietary data that's locked up behind corporate firewalls, and even hiring human domain experts specifically to create n…

> Now the frontier LLM vendors have shifted to licensing proprietary data that's locked up behind corporate firewalls, and even hiring human domain experts specifically to create new training content in target verticals.

That's a losing proposition for any token provider - it's expensive and slow, and when you're done everyone with money to rent a last-gen H100 is going to distill your "closed" model anyway.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#77

Post by richwater »

cmiles8 wrote: post #31

Market signals on an impending AI bust are broader than just Oracle’s woes. For example, Amazon just had a challenging bond offering where the market is clearly starting to seriously question the ROI on all this money being pumped into AI buildout. That does not bode well at all for AI-only companies without broader cash flow from other businesses. And when the cash dries up this whole thing comes crashing down like…

Hi there, how do you know Amazon's bond offering was "challenging"? Curious to learn more. Thank you.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#78

Post by ceejayoz »

llm_nerd wrote: post #73
ceejayoz wrote: post #7

Earlier quoted context omitted.

They'll use their purchases of TikTok and Paramount to campaign for a bailout.

Campaign? They're friends of the administration, and the US is firmly in the kleptocracy stage now (the last wrungs of democracy are about to be undone this Thursday evening). They'll give a bribe to Trump, they'll offer up 5% of the stock to Chairman Trump as the People's Stock now that the US is basically a bizarre oligarchy form of communism, and Oracle will be declared a state enterprise that cannot lose money. T…

The administration isn't fully immune to public opinion yet.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#79

Post by CamperBob2 »

cmiles8 wrote: post #46
therobots927 wrote: post #23

This is surprising to me. Judging by what appears to be the common sentiment here on HN - which is that AI inference is already profitable, and OpenAI is fairly valued by private markets. Given that Oracle and Microsoft are major counterparties of OpenAI, it seems odd that their stocks have been performing so poorly recently. Can anyone square this circle for me?

The general fallacy of the “but inference is profitable” argument is that it tends to ignore all the costs of building and training the model. Given the fact that 1) that’s not trivial, and 2) the arms race underway means one can’t stop training, then it ruins the financial picture. It’s like saying a new apartment building is “profitable” because the monthly income covers the monthly running costs, but ignoring the…

If the company who holds the mortgage wanted to own the building, they would have just bought it themselves. They don't, for whatever reason, so to some extent they have an incentive to help their customer succeed.

That's why it's so hard to get a residential mortgage, for example. It's more of a partnership, with more mutual vulnerability, than most people think. Same thing seems to be true here.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#80

Post by cmiles8 »

an0malous wrote: post #66
cmiles8 wrote: post #46

Earlier quoted context omitted.

The general fallacy of the “but inference is profitable” argument is that it tends to ignore all the costs of building and training the model. Given the fact that 1) that’s not trivial, and 2) the arms race underway means one can’t stop training, then it ruins the financial picture. It’s like saying a new apartment building is “profitable” because the monthly income covers the monthly running costs, but ignoring the…

> The general fallacy of the “but inference is profitable” argument is that it tends to ignore all the costs of building and training the model. Given the fact that 1) that’s not trivial, and 2) the arms race underway means one can’t stop training, then it ruins the financial picture. Or that it’s all hearsay and no one has released financials yet?

Well there is clearly also a lot of non-GAAP style “trust us bro” things going on too which generally boil down to “if you ignore all the reasons why we’re not profitable then we’re profitable.” It’s WeWork’s “community adjusted EBITDA” messaging repackaged.
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