Oracle hit hard in Wall Street's tech sell-off over its AI bet
63 comments
·November 14, 2025chollida1
neom
Yeah, and then the Canadian government handed hundreds of millions to the kids at Cohere who have now gone spent it on Coreweave. When it was all announced I was very very vocal that using an inexperienced startup for the sovereign compute capabilities seemed a very poor choice. I'm so curious to see how this all plays out.
reactordev
I think we know how it plays out. In a couple of years, someone is going to have to swoop in and save CoreWeave’s customers and consultants will be lined up for that “transformation”.
hackernewds
are you suggesting bailouts for the AI data centers are the new too big to fail
re-thc
> When it was all announced I was very very vocal that using an inexperienced startup for the sovereign compute capabilities seemed a very poor choice.
Cohere raised from Nvidia. Cohere spends on Coreweave. Coreweave raised from Nvidia and buys Nvidia chips.
This is why they buy from Coreweave.
helloooooooo
Cohere is doing a lot of enterprise AI business, and a lot of business directly with the federal government. They are also not juiced up in these financial games that OpenAI or Oracle are playing.
Additionally, Cohere is no less “kids” than Anthropic or OpenAI. Aidan was literally one of the co-authors of “Attention is all you need”.
neom
No doubt some amazing engineer's work there, but there are little to no adults in the room at that business as far as I can see, and sure they like to tweet about how well they are doing, and I keep hearing this line that they're selling to enterprise, uh, who, Canadian tire? If they actually have more than $150mm in revenue I'd be amazed, and $150mm revenue is still, not at all impressive.
https://www. theinformation.com/articles/openai-challenger- cohere-fell-85-short-early-revenue- forecast
htrp
aidan was an intern on AIAYN
>While an intern at Google Brain, Aidan Gomez co-authored the paper "Attention Is All You Need" with other researchers.
ryandv
I thought they were still hiring bootcamp graduates.
JCM9
Yes, the price of Coreweave default swaps has jumped 53% since October. In the eyes of the bond markets they’re basically toast… a ticking debt bomb waiting to implode.
FL33TW00D
Very interesting data point
jesuslop
I like the logic you use, let me borrow that.
francisofascii
Oracle stock down 25% for the past month, but still up 35% for the year and 300% for 5 years.
dmix
I'd be skeptical just because it's Oracle. Not exactly a sprightly company to bet on for novel technology.
theoldgreybeard
I can’t wait for the apocalyptic razing that’s coming.
xnx
This the flipside of jumping up for no good reason on September 10th.
pm90
Its funny that its back to almost the same price before it jumped that day.
dmoy
So debt financing (Oracle) vs fund-it-more-on-your-own (other big tech?) vs fund-it-with-equity (startups?)... I guess that makes some kind of sense? Oracle raises 4x the debt of e.g. Google?
re-thc
> I guess that makes some kind of sense? Oracle raises 4x the debt of e.g. Google?
The problem is why is Oracle raising this debt? It's to do the buildout for OpenAI. So Oracle buys GPUs from Nvidia. Nvidia invests in OpenAI. OpenAI then pays Oracle for the GPUs.
i.e. we're going around in circles.
nickff
Many of the ‘AI data centers’ are being financed with debt; some are being done as joint ventures with companies like Blue Owl Capital (whose stock is also taking a beating).
tru3_power
When you say debt financing (Oracle) does that mean Oracle is actually financing the loans to these other companies? Sorry if I'm misunderstanding.
financetechbro
They’re saying that Oracle has issued a lot of debt (like $60Bn) to fund their AI/datacenter commitments. Where as other companies, like MSFT, are using the cash in their balance sheet, and startups are using the cash they’ve gotten from investors
lambersley
Oracle was late to Cloud and now late to AI. Maybe it's time Larry let someone else take the helm.
JCM9
I’m bullish on AI as tech but folks are starting to sniff out that the financials of everything going on at the moment aren’t sustainable for much longer.
I hope we have more of a “reality correction” than full blown bubble bursting, but the data is increasingly looking like we’re about to have a massive implosion that wipes out a generation of startups and sets the VC ecosystem back a decade.
hvb2
The tech is way underpriced right now. It's basically a subsidized market right now, with the money flowing in coming from the private sector.
The problem here is that it remains to be seen who is willing to pay for the service once it's priced at cost or even with a margin. And based on valuations of AI companies one would expect a huge margin.
causal
I wonder if a price correction would be a boon for open source, with the economics of smaller / self hosted models making a lot more sense when API prices have to surge.
ForHackernews
It's hard for me to imagine paying real money for something that gives me a maybe-hallucinated answer that I need to check every single time. A flaky test is worse than a failing test.
danielbln
_sigh_
Yes LLMs hallucinate, no it's no longer 2022 and ChatGPT (gpt-3.5) is the pinnacle of LLM tech. Modern LLMs in an agentic loop can self correct, you still need to be on guard but if used correctly (yes, yes, holding it wrong etc. etc.) can do many, many tasks that do not suffer from "need to check every single time".
mistrial9
> it remains to be seen who is forced to pay
via govt relationships, long term irreplaceable services, debt or convictions.. Also don't forget the surveillance budgets and the best spigots there, win.
energy123
You're saying the unit economics are bad?
AnimalMuppet
A huge margin or a huge market at a moderate margin. But yes, the net profit has to be huge.
mjr00
The most sobering statistic I've seen is that the entire combined amount of consumer spending on AI products is currently less than the revenue of Genshin Impact.
bobbiechen
Indeed, bad for consumer AI. But I would expect B2B spending on AI dwarfs consumer spending, I wonder what that comparable B2B revenue would be.
mjr00
It certainly does but B2B revenue can also be much more "fake", in a sense. i.e. if Microsoft spends $500 million on OpenAI, which makes OpenAI spends $500 million on Azure... where does the profit come from? There have been a few interesting articles (which I unfortunately can't look up right now) recently describing how incestuous a lot of the B2B AI spend is, which is reminiscent of the dot-com bubble.
maeln
Well, Genshin Impact is at the forefront of predatory B2C business practice. It is a gacha game, engineered to extract as much money from its prey as possible. On the other end, most AI company can afford to be generous with their user/consumer right now because they are being bankrolled by magic money. The real test will be when they have to start the enshitification. Will the product still be enough to convince consumer to spend an amount of money guarantying a huge margin for the service provider ? Will they have to rely on whale desperately needing to talk to their IA girlfriend ? Or company and people who went deep into the whole vibe coding thing, and can't work without an agent ? I think it is hard to say right now. But considering the price of the hardware and running it, I don't think they will have to price the service insanely to at least be profitable. To be as profitable as the market seems to believe, that's another story.
fullshark
AI's consumer monetization will be ad-based or as a feature for a product users want to pay for. Businesses will be the primary customer for AI.
underlipton
I would be curious to see how it compares to the combined revenue of gay furry gacha games and VNs. Are we talking parity, multiples, or orders of magnitude? Anything other than the latter would be a bucket of cold water.
georgemcbay
> I’m bullish on AI as tech
I'm not bullish in the stock market sense.
Which isn't the same as saying LLMs and related technology aren't useful... they are.
But as you mentioned the financials don't make sense today, and even worse than that, I'm not sure how they could get the financials to make sense because no player in the space on the software side has a real moat to speak of.
People have preferences over which LLM does better at job $XYZ, but I don't think the differences would stand up to large price changes. LLM A might feel like its a bit better of a coding model than LLM B, but if LLM A suddenly cost 2x-3x, most people are going to jump to LLM B.
If they manage to price fix and all jump in price, I think the amount of people using them would drop off a cliff.
And I see the ultimate end result years from now (when the corporate LLM providers might, in a normal market, finally start benefiting from a cross section of economies of scale and their own optimizations) being that most people will be able to get by using local models for "free" (sans some relatively small buy-in cost, and whatever electricity they use).
moduspol
At this point I'm just hoping we can continue to postpone reality until after Christmas.
underlipton
It's just returning to relative sanity. Go look at a 6-month chart. Of course, it's mostly risen with the SP500 tide. The mid-September jump was some sort of mechanical move caused by things deep in the market (and outside it) that you're not allowed to know about. Someone needed collateral.
I don't think Oracle's stock price has anything to do with AI. That's just the public narrative.
tru3_power
Can you elaborate on the mechanical point you mentioned? And by someone needed collateral, does that mean whoever it was bought ORCL at that time to hold as collateral? How do you even figure that out?
softwaredoug
Maybe we can avoid an Ellison buyout of Warner Brothers.
next_xibalba
Why do we care if his son buys WB? Better if Disney buys it?
softwaredoug
Largely because Warner Brothers is a good movie studio buried in a terrible corporation. It’d be sad to see it go away.
WB going away or shrinking likely reduces Hollywoods movie output, consolidates the industry, makes it less competitive and reduces opportunity for talent.
In a different world WB the studio is a successful standalone company not burdened with debt due to Zaslovs idiotic bets.
(And Ellisons overpaying for it is probably the most serious buyer. It’s the only reason it’s a topic. I’m skeptical of other transactions)
aworks
e.g. Turner Classic Movies channel
ChrisArchitect
Previously:
Oracle's credit default swaps surge as Barclays downgrades its debt rating
Its worse for some other "ai" related companies.
Coreweave for instance, now has its CDS trade around 600bp, which is a 1/3 rise in 2 months, which implies that the probability of a default in 5 years is 40% at a 40 cent recovery rate.
That makes Coreweave's credit rating the equivalent of CCC-, which aint good.