From Bloomberg, April 28:
Shares in OpenAI partners such as SoftBank Group Corp. and Oracle Corp. are falling after the Wall Street Journal reported that the AI startup recently failed to meet targets for sales and new users, reviving worries about spending ahead of tech earnings.
SoftBank tumbled as much as 11% in Tokyo, while CoreWeave Inc., Oracle and Advanced Micro Devices Inc. fell by about 3% in US premarket trading. While OpenAI has struck deals with dozens of firms, markets tend to focus on a smaller subset of major partners including Nvidia Corp., SoftBank, Oracle, Microsoft Corp., Coreweave and AMD as investment proxies for the creator of ChatGPT.
Investors are on high alert for evidence that tech companies are staying committed to previously-announced plans for huge capital expenditure to build out AI infrastructure.
“That’s what the market needs to see to keep the AI narrative intact,” said Amanda Lyons, head of research at Energy Group Capital. “The nuance is that it’s a narrow path: any hint of slowing spend would be taken negatively for the ecosystem, but a sharp step-up would likely raise questions around returns and sustainability.”
A basket of companies connected to OpenAI has underperformed peers significantly in recent months, rising by about 75% since the end of 2024 compared with gains of more than 300% for a similar group of Alphabet Inc.-tied stocks....
....MUCH MORE
Which is why we added this outro to the earlier: WSJ Exclusive: "OpenAI Misses Key Revenue, User Targets in High-Stakes Sprint Toward IPO":
Very related, April 22:
"SoftBank Seeks $10 Billion Margin Loan Backed by OpenAI Shares"
The post begins:
This is where the risk to the AI juggernaut and possibly the world economy is lurking.
Should SoftBank be unable to repay or refinance the debts it is taking on, the risk goes from theoretical to kaboom pretty fast and all the other daisy-chain financings get stress-tested in a real-world cascade.
And unfortunately chatbots in general and OpenAI/Sam Altman in particular may not be the future that Mr. Son seems to think....
