Item — HN Reader

>...it makes the revenue numbers the industry has to hit higher...

Yes. But.

Industry can miss its revenue targets, Oracle can go bankrupt (looking more and more likely) OpenAI, Anthropic and SpaceX might find "true value" at about 10% of current valuations (that feels right to me), all that can happen with the associated economic chaos... and still out of it comes world shaping new technology

Both things can be true

2 comments

Certainly, but a flop of $1.5 trillion would create a deep and long trough. I think in that situation OpenAI and Anthropic probably don't survive as independent companies (where is the revenue? who would want to put more money in at that point?). In that situation there would definitely be a fire sale in the prices of licensing models (open weights are already pushing this way the hell down), semiconductors, data centers, and compute in general. And like in that situation, who knows what products come out of that dividend of cheap stranded assets? It might not even be AI related. You can do a lot of things with a lot of cheap GPU power. This boom-bust cycle is nothing new, especially to the tech industry. This deep crash outcome is the risk that a bet of $1.5 trillion makes. And it makes the current paradigm of coding agents and chatbots less likely because it is so volatile.

Oracle can go bankrupt? Oracle was a license to print money for decades. If they go bankrupt, that is one insanely bad bet they made.

Oracle has bet the house on AI. Free cash flow is deeply negative with tons more capex guidance on the books. They are currently the largest non-financial corporate issuer of new debt in the corporate bond market. They are literally cutting their headcount to the bone to help fund this build out. If their compute deals do not pan out because their customers have liquidity issues or revenue stalls, they are in dire straits.