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Oracle will have to borrow at least $25B a year to fund AI fantasy, says analyst

45 points by rntn 1y ago

gigatexal 1y ago
I'd love for this bubble to pop. I have a bit of cash I'd like to invest in the markets at fair values not these over-hyped AI ones...
- bryanlarsen 1y ago
  Can we get two birds with one stone? Can we get Oracle to pop too?
- baal80spam 1y ago
  "The best time to get in was yesterday. The second best time is today."
  - gigatexal 1y ago
    Oh don’t get me wrong. I’m daily buying and dollar cost averaging in the S&P500 but … I’m hoping for a huge correction, a market melting, recession level one that will cull all these companies with shaky business prospects and revenues. So I can maybe buy Apple and Amazon and Google at close to half what they’re at now which is probably closer to fair.
- more_corn 1y ago
  There’s tail risk protection. But the market can stay irrational longer than you can stay solvent. Maybe if you could identify potential triggers you could watch for them and then short on the way down. I am not a doctor and this is not financial advice.
yoyohello13 1y ago
Listening to Larry Ellison talk about his plans for AI and American's data makes my skin crawl. I can't help but feel we are in for some real bad times ahead.
- jsbisviewtiful 1y ago
  Same. I was always under the impression the governments of the world would put a stop to corporate takeovers of society but unfortunately the complete lack of education and care from citizens kept voting in corrupt capitalist politicians who only care about making profits. A future akin to the Alien, Westworld and Cyberpunk universes is now on a fast track - assuming climate change doesn't wipe us out first.
  - deleted 1y ago
    [deleted]
  - sekh60 1y ago
    Was kinda hoping we'd have a more Shadowrun dystopia if we had to choose one. At least there would be some cool magic.
- IG_Semmelweiss 1y ago
  Larry Ellison’s stock exposure to Oracle is immense, with a 41% stake (1.16 billion shares). That's the vast majority of his wealth! It would be incredible to see a titan cut to size, when the bank (debtholders) come knocking on his door. I too agree it would be best to not have Ellison have anything to do with the future of privacy in the US. We can take solace that he's gambling big, and there's a chance we may benefit from his loss
scarface_74 1y ago
This is truly bubble behavior. Open AI is losing billions of dollars and is only sustainable based on continued investor funding. Oracle is banking on money from Open AI. All of the other BigTech public companies are investing in infrastructure from free cash flow.
- more_corn 1y ago
  So, when will the music stop? And will you recognize it when it does?
  - orwin 1y ago
    So, interestingly, the same happened during the dot-com bubble, with less money though, but it kept the bubble afloat for around 6 months for a year (don't make any predictions about now, the amounts aren't the same, neither is global GDP percentage, and borrowing rate can fall to 0). Cisco and other infrastructure companies 'invested' in dot-com companies, who paid datacenter companies who paid Cisco and infrastructure companies. When you see Nvidia investing 100 billions into OpenAi who promised to Oracle at least 150 billions of investments (which means oracle RTO on 10 year is like 400 billion now, around 4x what it was before Nvidia investment), and Oracle will buy its chips, which are the cost driver for AI datacenter, from Nvidia. Which is probably the most circular economy-like capitalism can do, in a way, as a leftist I should be happy.
  - scarface_74 1y ago
    That’s the beauty of it this time. Money losing companies are staying private and the only public companies that are involved in the Ponzi scheme seem to be Oracle and to a lesser extent Nvidia. But at least Nvidia is not borrowing money for its investments. Of course Tesla. But it’s always been a meme stock. I don’t see the AI bubble busting and it affecting the S&P 500 that much. Even before AI, the other public tech companies have real business and AI will be a “sustaining innovation” (see Clay Christenson). For me personally, Gen AI is just another tool in my tool belt when I implement projects - ie another AWS SDK service call (boto3/Bedrock). Yes if you have a pension, on the other hand, all bets are off since ther do invest in private equity unlike most defined contribution plans.
josefritzishere 1y ago
The amout of money companies will waste on AI is astounding.

45 points by rntn 1y ago

I'd love for this bubble to pop. I have a bit of cash I'd like to invest in the markets at fair values not these over-hyped AI ones...

bryanlarsen 1y ago
Can we get two birds with one stone? Can we get Oracle to pop too?
baal80spam 1y ago
"The best time to get in was yesterday. The second best time is today."
- gigatexal 1y ago
  Oh don’t get me wrong. I’m daily buying and dollar cost averaging in the S&P500 but … I’m hoping for a huge correction, a market melting, recession level one that will cull all these companies with shaky business prospects and revenues. So I can maybe buy Apple and Amazon and Google at close to half what they’re at now which is probably closer to fair.
more_corn 1y ago
There’s tail risk protection. But the market can stay irrational longer than you can stay solvent. Maybe if you could identify potential triggers you could watch for them and then short on the way down. I am not a doctor and this is not financial advice.

yoyohello13 1y ago

Listening to Larry Ellison talk about his plans for AI and American's data makes my skin crawl. I can't help but feel we are in for some real bad times ahead.

jsbisviewtiful 1y ago
Same. I was always under the impression the governments of the world would put a stop to corporate takeovers of society but unfortunately the complete lack of education and care from citizens kept voting in corrupt capitalist politicians who only care about making profits. A future akin to the Alien, Westworld and Cyberpunk universes is now on a fast track - assuming climate change doesn't wipe us out first.
- deleted 1y ago
  [deleted]
- sekh60 1y ago
  Was kinda hoping we'd have a more Shadowrun dystopia if we had to choose one. At least there would be some cool magic.
IG_Semmelweiss 1y ago
Larry Ellison’s stock exposure to Oracle is immense, with a 41% stake (1.16 billion shares). That's the vast majority of his wealth! It would be incredible to see a titan cut to size, when the bank (debtholders) come knocking on his door. I too agree it would be best to not have Ellison have anything to do with the future of privacy in the US. We can take solace that he's gambling big, and there's a chance we may benefit from his loss

scarface_74 1y ago

This is truly bubble behavior. Open AI is losing billions of dollars and is only sustainable based on continued investor funding. Oracle is banking on money from Open AI. All of the other BigTech public companies are investing in infrastructure from free cash flow.

more_corn 1y ago
So, when will the music stop? And will you recognize it when it does?
- orwin 1y ago
  So, interestingly, the same happened during the dot-com bubble, with less money though, but it kept the bubble afloat for around 6 months for a year (don't make any predictions about now, the amounts aren't the same, neither is global GDP percentage, and borrowing rate can fall to 0). Cisco and other infrastructure companies 'invested' in dot-com companies, who paid datacenter companies who paid Cisco and infrastructure companies. When you see Nvidia investing 100 billions into OpenAi who promised to Oracle at least 150 billions of investments (which means oracle RTO on 10 year is like 400 billion now, around 4x what it was before Nvidia investment), and Oracle will buy its chips, which are the cost driver for AI datacenter, from Nvidia. Which is probably the most circular economy-like capitalism can do, in a way, as a leftist I should be happy.
- scarface_74 1y ago
  That’s the beauty of it this time. Money losing companies are staying private and the only public companies that are involved in the Ponzi scheme seem to be Oracle and to a lesser extent Nvidia. But at least Nvidia is not borrowing money for its investments. Of course Tesla. But it’s always been a meme stock. I don’t see the AI bubble busting and it affecting the S&P 500 that much. Even before AI, the other public tech companies have real business and AI will be a “sustaining innovation” (see Clay Christenson). For me personally, Gen AI is just another tool in my tool belt when I implement projects - ie another AWS SDK service call (boto3/Bedrock). Yes if you have a pension, on the other hand, all bets are off since ther do invest in private equity unlike most defined contribution plans.

josefritzishere 1y ago

The amout of money companies will waste on AI is astounding.