Dare ObasanjoJan 31

This week Microsoft stock tanked -12% on revelations that 45% of its Azure customer backlog is OpenAI.

Oracle is now struggling to get loans to pay for its data center buildout to meet its $300B deal with OpenAI. They may need layoffs to come up with the money.

The underlying theme being bankers don’t believe OpenAI will have the money to pay these bills and it’s pulling down companies doing business with it.

https://www.cio.com/article/4125103/oracle-may-slash-up-to-30000-jobs-to-fund-ai-data-center-expansion-as-us-banks-retreat.html

Oracle may slash up to 30,000 jobs to fund AI data-center expansion as US banks retreat

Oracle is considering workforce cuts and selling Cerner to alleviate financial pressure, warns investment bank TD Cowen.

CIO
Show threadMartin Rundkvist
@carnage4life
Please, could you unpack "45% of its Azure customer backlog is OpenAI"? I haven't got the background.
Jan 31 at 2:16pmWeb
Show threadHeddersFeb 2
@mrundkvist @carnage4life As I understand it, 45% of new Azure business, which Microsoft is expending large amounts of capital on building capacity to meet, is from just one customer, OpenAI. OpenAI doesn't actually have the money to pay for that new Azure spend on which Microsoft is relying unless it secures massive additional funding.
Show threadMartin RundkvistFeb 2

@hedders
Thank you! And Azure is Microsoft's server space rental service, "cloud computing".

So I take it that Microsoft is building an ass-tonne of expensive rental widgets, but it's widely known that about half of the apparent demand for rental widgets is actually just empty promises from someone with no money.

Maybe I shouldn't buy Microsoft stock then. Either, I mean.

#aibubble

Show threadHeddersFeb 2
@mrundkvist That would appear to be the long and short of it.