Oracle Corp.’s recent stock surge, driven by a historic $300 billion cloud computing deal with OpenAI, has ignited concerns on Wall Street about the sustainability of AI investments. While Oracle’s shares jumped over 40%, boosting its market cap, critics warn of an impending “AI bubble” due to projected capital expenditures exceeding $325 billion by Big Tech next year. Analysts highlight OpenAI’s ambitious revenue forecasts—ranging from $12 billion to $100 billion by 2029—amid fears of overreach and inadequate funding sources. The partnership also underscores significant energy demands, with Oracle committing to 4.5 gigawatts over five years, raising feasibility concerns. Reports suggest that while Oracle’s cloud revenue could reach $114 billion by 2029, reliance on OpenAI poses risks if AI advancement stalls. Comparisons to the dot-com era hint at potential market corrections. Stakeholders must balance the promise of AI innovation against speculative risks as the industry navigates its future trajectory.
Source link
Share
Read more