This slide from their investor preso is bonkers. $10B revenue today, but we promise we'll get to $166B in revenue in 5 years, by the simple expedient of growing 75% every year for five years!
FT uses "underwater" because the deal was $300 Billion and the stock has lost $315 Billion in market cap since the deal. That's a bit of a stretch, but the rest of the article is very good.
And as it won't be obvious to everyone here: Alphaville is one of the few free parts of FT online. You need to create an account to access it, but don't need a paid subscription.
Yea these market cap discussions are always a bit meaningless actually, stocks can be volatile for many reasons… its not like they actually lost the delta
The market is pricing in significant counterparty risk. It's possible Oracle does the buying, unpacking, and cooling of Nvidia servers and doesn't get paid.
> It's possible Oracle does the buying, unpacking, and cooling of Nvidia servers and doesn't get paid.
The beauty of being a cloud infra provider is you're selling shovels. OpenAI going bust? Doesn't matter too much for Oracle, there will always be someone willing to pay them for GPU compute capacity.
Even if the hype behind AI dies down, which I hope it does rather sooner than later, the fundamental aspects aren't vaporware like with the cryptocurrency craze - AI, even the relatively lackluster state we have today, has a ton of very useful usage cases that are actually working in the field.
The market (over)reacted to the OpenAi announcement sending Oracle’s share price up and now may be overreacting to Altman’s interview with an investor pushing their stock price down. And we are measuring (what seems like) a non-binding investment against market cap which swings everyday.
The market is priced for perfection. Delivery is underwhelming. I think the audacity and hijinks of Altman, Musk, the Trump whack pack, Theil, etc in this zero regulatory environment is starting to wear thin on Wall St.
The honest players like NVidia, Micron, Microsoft, Meta and Google who are shipping product or making money with this tech. IMO there’s a non-zero probability that OpenAI and the “Elon cinematic universe” are Enron style disasters.
The SEC is essentially gone. Their contracts with FINRA mostly cancelled. You can’t invest like it’s 2024.
Is it just me, our does this feel like the AI grifters doing the same market manipulation tricks that their new best friends (or their past selves) the Crypto Currency grifters used, only this time with private company stock price insane valuation deals instead of magical internet money beans?
But what does win mean here? It's commoditized at this point, everyone's got options, and it's easy to swap models. This means the user share will be spread out among the different offerings. There's no winner take all scenario.
What is the cost of delivering regular search results vs. answering an AI chat question? How do you sell ads through each of these channels?
If you consider those angles you'll see that Google does not want AI chat to replace Google search any time soon. Google is being dragged into this kicking and screaming. They are damned if they do, and damned if they don't.
Isn’t Gemini the same price for the same usage as OpenAI? I agree they bundle extra things in there, but you don’t have to use them. If you just used Gemini for $20 you’d be equally situated as OpenAI for $20 on the model front.
If you remove AGI dream from the equation, AI revenues couldn't come close everpresent ads on the internet which Google has monopoly over, and LLM directly affects Google core business.
Also Google doesn't have great business reputation for sticking to their APIs, so they need to be lot better than open model always, which it is now but my guess would be it wouldn't be for long.
There has never been a moment that I've truly understood how Oracle stays in business.
I snuck into "Oracle Openworld" in 2011, and it was just the most drunken, debaucherous event. I had just come from Djangocon in Portland, and the contrast was incredible - Djangocon which was _much_ more chill, focused on collaboration - more full of weed, whereas the Oracle thing was liquor and cocaine, and I had the distinct feeling that few people there were mulling over any product notions whatsoever.
Is it just legacy db support? Can that really explain this? They have window shopped acquisitions for a decade now - do they have a stack which new customers are approaching with serious esteem, and I just haven't heard about it?
Readit News
https://d9j0pm70mrv84f.archive.is/Qdf2n/baa236e2a4d94d45fe93...
We should be so lucky as to compare 2025 to 1997, when Itanium and its projections were announced.
The beauty of being a cloud infra provider is you're selling shovels. OpenAI going bust? Doesn't matter too much for Oracle, there will always be someone willing to pay them for GPU compute capacity.
Even if the hype behind AI dies down, which I hope it does rather sooner than later, the fundamental aspects aren't vaporware like with the cryptocurrency craze - AI, even the relatively lackluster state we have today, has a ton of very useful usage cases that are actually working in the field.
OpenAI's side of those deals are just announcements, which may become real. Or not.
The honest players like NVidia, Micron, Microsoft, Meta and Google who are shipping product or making money with this tech. IMO there’s a non-zero probability that OpenAI and the “Elon cinematic universe” are Enron style disasters.
The SEC is essentially gone. Their contracts with FINRA mostly cancelled. You can’t invest like it’s 2024.
ChatGPT has brand recognition and adoption, but not the best product anymore.
The more they emulate ChatGPT's clean UI, the more they are failing to push ads in people's faces, which is what generates that $100B for them.
Their business model fails if their users don't experience a confusing crap-fest of ads.
Companies with worse products win all the time based on brand and adoption. So it isn't clear to me at all that Google can win.
Like google.
If you consider those angles you'll see that Google does not want AI chat to replace Google search any time soon. Google is being dragged into this kicking and screaming. They are damned if they do, and damned if they don't.
For me personally this is a major feature.
Google has no such thing for Gemini, it's subscriptions are brain-dead, expensive bundled with 2 TB of storage and other shit that I don't want.
Also Google doesn't have great business reputation for sticking to their APIs, so they need to be lot better than open model always, which it is now but my guess would be it wouldn't be for long.
I snuck into "Oracle Openworld" in 2011, and it was just the most drunken, debaucherous event. I had just come from Djangocon in Portland, and the contrast was incredible - Djangocon which was _much_ more chill, focused on collaboration - more full of weed, whereas the Oracle thing was liquor and cocaine, and I had the distinct feeling that few people there were mulling over any product notions whatsoever.
Is it just legacy db support? Can that really explain this? They have window shopped acquisitions for a decade now - do they have a stack which new customers are approaching with serious esteem, and I just haven't heard about it?