Oracle is underwater on its $300B OpenAI deal
76 comments
·November 18, 2025andrenotgiant
FT uses "underwater" because the deal was $300 Billion and the stock has lost $315 Billion in market cap since the deal. That's a bit of a stretch, but the rest of the article is very good.
almostkindatech
FT Alphaville is the (very good) blog-style section of the FT, so this point is meant slightly tongue-in-cheek, as Bryce hints at himself.
lateforwork
Oracle has no IP in this deal. All they are doing is unpacking Nvidia servers, plugging it in, and keeping them cool. They get 15% markup for this.
650REDHAIR
I mean that doesn’t have a $0 cost.
chrisgd
The market (over)reacted to the OpenAi announcement sending Oracle’s share price up and now may be overreacting to Altman’s interview with an investor pushing their stock price down. And we are measuring (what seems like) a non-binding investment against market cap which swings everyday.
throwacct
so, these companies are playing hot potato and this is oracle holding it.
reactordev
I so desperately want to make a snide comment about foreseeing the future but the reality is the CapX is so muddied that I’m afraid everyone is going to feel it.
wmf
Oracle doesn't own the GPUs themselves and may hold as little as 10% of the Stargate bag.
rwmj
Please let it be true.
LASR
As someone paying some vague attention to market movements, this was predictable.
News of a deal and hype was largely responsible for the rise. Now that the sentiment is cooling off, it’s dropping back to a more reasonable level.
dist-epoch
So you shorted Oracle and made money?
HWR_14
Knowing a stock is overpriced and knowing when it will correct precisely enough to profit are very different.
drivebyhooting
It’s looking like Google may outdo OpenAI.
ChatGPT has brand recognition and adoption, but not the best product anymore.
Bricejm
Google also has $100 billion in profit each year from it's core business to wait out OpenAI.
abraae
Google is also conflicted though.
The more they emulate ChatGPT's clean UI, the more they are failing to push ads in people's faces, which is what generates that $100B for them.
Their business model fails if their users don't experience a confusing crap-fest of ads.
overfeed
> Their business model fails if their users don't experience a confusing crap-fest of ads.
I bet you OpenAI will implement ads far sooner than Google can hypothetically run out of money.
slumberlust
As always, they will keep it clean until they can crank that enshitification dial to 11.
rvnx
And they also have their own chips (TPUs), no need for Nvidia
bhouston
> ChatGPT has brand recognition and adoption, but not the best product anymore.
Companies with worse products win all the time based on brand and adoption. So it isn't clear to me at all that Google can win.
imglorp
But what does win mean here? It's commoditized at this point, everyone's got options, and it's easy to swap models. This means the user share will be spread out among the different offerings. There's no winner take all scenario.
blitzar
> Companies with worse products win all the time based on brand and adoption.
Like google.
lateforwork
What is the cost of delivering regular search results vs. answering an AI chat question? How do you sell ads through each of these channels?
If you consider those angles you'll see that Google does not want AI chat to replace Google search any time soon. Google is being dragged into this kicking and screaming. They are damned if they do, and damned if they don't.
keiferski
Unless I’m missing something, Google doesn’t really have the “chat journal” aspect that ChatGPT has. It’s just a search engine.
For me personally this is a major feature.
esafak
What's a chat journal besides a history, which Gemini has?
ElectricalUnion
NotebookLM?
YetAnotherNick
If you remove AGI dream from the equation, AI revenues couldn't come close everpresent ads on the internet which Google has monopoly over, and LLM directly affects Google core business.
Also Google doesn't have great business reputation for sticking to their APIs, so they need to be lot better than open model always, which it is now but my guess would be it wouldn't be for long.
dist-epoch
You can get a $20 OpenAI subscription for some serious usage.
Google has no such thing for Gemini, it's subscriptions are brain-dead, expensive bundled with 2 TB of storage and other shit that I don't want.
ohyoutravel
Isn’t Gemini the same price for the same usage as OpenAI? I agree they bundle extra things in there, but you don’t have to use them. If you just used Gemini for $20 you’d be equally situated as OpenAI for $20 on the model front.
xtoilette
Time to short major stocks?
btbuildem
Time to put your RRSP / 401k in cash, it's all starting to seriously teeter.
supportengineer
Well, bonds should be OK. CDs, Treasuries, etc
null
Analemma_
Maybe, but not Oracle. Oracle is friends with the regime: Larry Ellison's kid runs TikTok and has promised to use it to push more conservative content. They'll get bailed out.
mmooss
> Larry Ellison's kid runs TikTok
Also Paramount, which owns CBS News among other things. And they are looking to acquire the parent company of CNN.
haberdasher
You're 2 weeks late.
ekjhgkejhgk
LOL the drop from 2 weeks ago is about 4%.
LunaSea
-20% in the last month
whattheheckheck
Let it ride
TheAlchemist
One must love the projections of >50% YOY growth for 5 straight years.
Why not continue for the next 5 ? Maybe they will find customers on Mars.
This while situation is very strange - there are some big companies pouring tens of billions into it (Alphabet, Meta) - since they don't have anything better to do with the money printers they have, but there are several others whose valuations are based on completely unrealistic projections where their expected revenues in 5-10 years represent 99% of their current 'value'.
prewett
Traditionally one is supposed to return money you don’t have anything better to do with to shareholders in dividends, but that is sadly out of fashion with tech companies.
brainwad
Alphabet at least returns capital via huge buybacks that effectively act as dividends, but with more tax efficiency.
lotsofpulp
Why would it be in fashion? If you want the money, then sell your shares and don't cause a taxable event for everyone else.
elzbardico
Fuck Larry Elison.
James_K
Whoda thought that agreeing to build $300 billion of infrastructure for a company with $20 billion revenue and zero profit was a bad idea?
harshalizee
Oracle is the one to look out for if/when the bubble bursts. Most of the big tech will be fine, albeit hurting for a while. For Oracle, this might be existential.
matsz
Finally, been waiting for this moment since I've learned about Oracle. Would be well-deserved for them. Hope Larry Ellison loses his yacht.
water-data-dude
But there would be other consequences too, just consider the philanthropic organizations that Larry Ellison supports! Like the Ellison Medical Foundation, a non profit whose sole purpose is to keep Larry Ellison alive as long as possible!
kstrauser
> to keep Larry Ellison alive
This is called “begging the question”. I need some evidence that Ellison is not an undead.
lifestyleguru
That dude literally launched medical foundation for his personal healthcare.
elzbardico
That is not enough for me.
I want Mr Ellison working in a Gulag in Siberia.
hypeatei
These people are in the class that never fails. Ellison won't lose anything.
matsz
One can dream.
null
symfoniq
So you’re saying there’s an upside?
marcosdumay
Maybe the entire purpose of OpenAI was to suck all the inflation the US government created on the last decade and burn it out in a huge bonfire at the end of its life.
Sam Altman has been playing 6-D chess this entire time, and we thought he was just a fraudster.
dipsheetpatel
>fraudster excuse me sweaty, AGI is actually around the corner
ramesh31
>Maybe the entire purpose of OpenAI was to suck all the inflation the US government created on the last decade and burn it out in a huge bonfire at the end of its life.
This has seriously crossed my mind as well. Like we've reached an endgame here where big tech has now found a way to literally burn off trillions of dollars into waste heat.
jandrese
Don't they still sell a database product? As long as they don't do the Venture Capital thing and sell off the most promising business units there should still be something for the company to do after the AI bubble implodes. Certainly there will be a lot of layoffs, and maybe even a chapter 13, but I don't think they'll stop existing.
chasil
Oracle Database Enterprise Edition retails at $47,500 per CPU core (there is a 2-for-1 discount on x86) when licensed this way.
There is extreme caution in deploying new Oracle databases, more so than SQL Sever.
lifestyleguru
Oh god, that'd be finally some good news in this recent brutal and sad time period.
blibble
unfortunately their database continues to print money from trapped customers
the "AI" is just an attempt to pump the stock price
OpenAI though can't survive as there's no business at all to fall back on
https://archive.ph/Qdf2n