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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-

#51

Post by boron1006 »

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.

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

#52

Post by cmiles8 »

pocksuppet wrote: post #42
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…

IMHO these signals have more to do with the market than AI. They aren't finding AI to be have less ROI than before - they are requiring higher ROI than before, because there is less money remaining to be invested. Managing the total amount of money so that investment bubbles peter out before they get excessively big is supposed to be the central bank's job.

The bond market is measuring the risk of repayment though not the success ROI of the dollars invested by the company (that impacts the stock price but not so much the bond price). The bond markets are hiccuping on AI because there’s growing concern that these loans simply won’t get repaid.

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

#53

Post by lelanthran »

Zsfe510asG wrote: post #20

There is AI data center overcapacity already. The KOSPI crashed last week, and it's a leading indicator for the cyclical hardware industry. It already had been that indicator in the 2000 bubble. I don't know what possessed Ellison to ruin a functioning company, but it will be interesting if he gets a margin call for ORCL's other debt exposures, which are Ellison's massive loans against his ORCL stock.

> I don't know what possessed Ellison to ruin a functioning company,

Same thing that drives all these execs of large companies - naked greed!

"If only we can fire all workers, imagine how profitable we'll be!"

They are attempting to set civilisation on fire with the intention of being on top when they no longer need humans.

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

#56

Post by toomuchtodo »

pocksuppet wrote: post #42
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…

IMHO these signals have more to do with the market than AI. They aren't finding AI to be have less ROI than before - they are requiring higher ROI than before, because there is less money remaining to be invested. Managing the total amount of money so that investment bubbles peter out before they get excessively big is supposed to be the central bank's job.

Kinda cool to be at a point in the hype cycle where the capital markets are almost exhausted due a to a speculative bubble, pushing up yield demand. Move over tulip mania.

https://en.wikipedia.org/wiki/Tulip_mania

> No of course there isn't enough capital for all of this. Having said that, there is enough capital to do this for a at least a little while longer. -- Gil Luria (Managing Director and Analyst at D.A. Davidson)

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

#57

Post by lelanthran »

pocksuppet wrote: post #42
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…

IMHO these signals have more to do with the market than AI. They aren't finding AI to be have less ROI than before - they are requiring higher ROI than before, because there is less money remaining to be invested. Managing the total amount of money so that investment bubbles peter out before they get excessively big is supposed to be the central bank's job.

> They aren't finding AI to be have less ROI than before - they are requiring higher ROI than before, because there is less money remaining.

What ROI? There was no return, and there currently isn't any return on investment, because those companies did not exit yet!

The exit plan is to offload overpriced shares, that they paid billions for, onto the public market. If they don't IPO, those investors get nothing.

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

#58

Post by jstanley »

pocksuppet wrote: post #42
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…

IMHO these signals have more to do with the market than AI. They aren't finding AI to be have less ROI than before - they are requiring higher ROI than before, because there is less money remaining to be invested. Managing the total amount of money so that investment bubbles peter out before they get excessively big is supposed to be the central bank's job.

> there is less money remaining.

In what sense?

This may be related to the commonly-held fallacy of "cash on the sidelines". Cash is always on the sidelines. Cash is not created or destroyed by buying and selling stocks or bonds. Cash is simply handed from one party to another, but the cash has to be held by somebody.

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

#60

Post by AlexandrB »

SirFatty wrote: post #36
therobots927 wrote: post #32

Earlier quoted context omitted.

Well it seems like he bought the “AGI is 2 years away” line. As did… pretty much everyone in Silicon Valley.

yeah.. https://ai-2027.com/

If/when the AI bubble pops, this website will be really funny. I guess it's already funny. This is what it shows for Apr 2026:

> Reliable Agent copies thinking at 13x human speed

Still waiting for a reliable agent to think at any speed.

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