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Line 61: − Oracle’s experience is salutary. The shares rose 25% when it announced a transaction to provide cloud computing facilities to [[OpenAI]]. As of December 2025 the data centers did not exist and will have to be constructed. The transaction requires Oracle, which is significantly leveraged, to borrow funds to create these centers meaning that the firm took significant exposure to Open AI. Given its net debt of over $100 billion will need to increase substantially to finance the data centers, the cost of insuring against Oracle default rose sharply and would flow through into the value of existing debt and the cost of future debt. A credit ratings downgrade from BBB, or low investment grade, is possible, potentially to non-investment or junk grade. Its share price fell to levels around that before the announcement of the OpenAI transaction. While [[Microsoft]], [[Meta]] and [[Amazon.com]] have stronger balance sheets, the risks are not dissimilar.<ref>https://archive.is/wabzo</ref>+
Artificial intelligence (view source)
Revision as of 03:51, December 20, 2025
, 03:51, December 20, 2025→The AI bubble
==The AI bubble==
==The AI bubble==
[[Oracle Corporation]]'s experience is salutary. The shares rose 25% when it announced a transaction to provide cloud computing facilities to [[OpenAI]]. As of December 2025 the data centers did not exist and will have to be constructed. The transaction requires Oracle, which is significantly leveraged, to borrow funds to create these centers meaning that the firm took significant exposure to Open AI. Given its net debt of over $100 billion will need to increase substantially to finance the data centers, the cost of insuring against Oracle default rose sharply and would flow through into the value of existing debt and the cost of future debt. A credit ratings downgrade from BBB, or low investment grade, is possible, potentially to non-investment or junk grade. Its share price fell to levels around that before the announcement of the OpenAI transaction. While [[Microsoft]], [[Meta]] and [[Amazon.com]] have stronger balance sheets, the risks are not dissimilar.<ref>https://archive.is/wabzo</ref>
==AI in pop culture==
==AI in pop culture==