Jim Cramer Predicts ‘Electric Power Gating’ and OpenAI’s Finances Will Curb Hyperscaler AI Spending – Insights on First Trust DJ Internet Index Fund (ARCA:FDN) and Fidelity MSCI Information Technology Index ETF (ARCA:FTEC)

CNBC host Jim Cramer has highlighted a J.P. Morgan report emphasizing that physical and financial constraints will limit tech giants’ spending on artificial intelligence (AI), rather than leading to a market crash. He argues that the risk of an AI bubble reminiscent of the dot-com era is overstated. Instead, “electric power gating” poses a major barrier, with U.S. power generation struggling to keep pace with projected load growth from data centers. Additionally, major players like OpenAI are facing substantial financial commitments that may exceed their current revenues. OpenAI’s $60 billion annual deal with Oracle is a notable example, as is the $1.4 trillion in obligations it faces primarily on subscription income. Cramer suggests these limitations are essential for curbing excessive speculation in AI, contrasting current high-profit margins with the unprofitable companies of the late 1990s. Financial realities will shape the future of AI investments significantly.

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