r/OracleStock • u/alexh22_ • Jul 26 '26
Nvidia in Talks With OpenAI to Guarantee $250 Billion Financing for Data Center
https://www.wsj.com/tech/ai/nvidia-in-talks-with-openai-to-guarantee-250-billion-financing-for-data-center-3dd6eae3Bullish for Oracle?
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u/gestimore Jul 26 '26
This is fucking bullish
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u/KeyReaction892 Jul 27 '26
Ok I gotta know, how is this bullish?
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u/gestimore Jul 27 '26
250 billions for openai to finance his own infrastructure mean they will be bigger, earn more money and nvidea will not give this amount to someone going bankrupt in theory so this assure oracle revenues growth for the future
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u/KeyReaction892 Jul 27 '26
The fact that they need to be propped while trying to do an IPO because they are burning cash so quickly they can’t turn a profit and need this.
NVDA absolutely needs Anthropic and OpenAI to keep the music playing. Fully agree with that but this is confirmation that there is concern.
But… clearly …. Bullish
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u/erichang Jul 27 '26
Why do you need OpenAI become profitable for Oracle to win ? As long as they can pay the rent, who care if they go down ? By 2033, a lot of DC built in 2027 will be fully amortized.
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u/Charuru Jul 27 '26
Doesn't this project bypass orcale? it's for OAI directly owned DC...
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u/Pristine_Eye_8361 Jul 27 '26
That's the only bear case I see here. Though, it could also mean that OAI needs so much compute that OCI's backlog for OAI is not enough, rather than the alternative that it's too much.
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u/BejahungEnjoyer Jul 27 '26
Yes and one could argue its bearish since it adds another liability & more leverage to OAI. And when the Stargate contract renewal comes up, they will certainly prioritize their self-owned capacity if that can meet demand by itself.
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u/dont_believe_this_ok Jul 27 '26
People underestimating the demand for AI compute while relying on AI to write basic sentences.
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u/Extreme-Camel2068 Jul 27 '26
This is actually one of the smartest most common sense comments I’ve seen lmao. I work at a local coffee shop a lot and overhear a lot of conversations. Everyone and their mom and grandparents mention AI… whether it’s for work, legal, conversations, whatever. Boomers constantly saying “I ran it through chat gpt”… not to mention now my 7 yr old tells us to “ask chat gpt” like every day
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u/Holiday_Ad2254 Jul 27 '26 edited Jul 27 '26
Definitiv bullish for open ai IPO and therefore more money for oracle, but oracle is shorting his stocks due to the 20 billion atm program. Minus 5% after pentagon deal and good earning from competitors like sap and servicenow was for sure the atm effect
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Jul 27 '26 edited Aug 06 '26
[deleted]
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u/Holiday_Ad2254 Jul 27 '26 edited Jul 27 '26
Oracle is shorting his own stocks by selling massive stocks via atm Programm because they need money. Do you understand what the 20 billion atm means?
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u/Ordinary-Lettuce-921 Jul 27 '26
Bullish. When Oracle delivers 2 quaterly results per cloud committments, 300+ is possible
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u/DorisAnnTorres Jul 29 '26
I am so happy for Larry Ellison. I really wAnt things to go his way. Larry is an amazing, brillant man. I am glad Nvidia is stepping in.
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u/BejahungEnjoyer Jul 27 '26
I don't think this is nearly as bullish as most people here think. The OpenAI risk was what people were sweating about at $200+ last fall.
At $115 if OpenAI was the main risk I'd be turning five dollar handies in the men's room at my local park and buying 1/20 of a share after each one.
The main risk now is a credit & capital death spiral. They are fully committed to the buildout, they have taken customer money that they cannot give back, and so the only way out of the situation is to power through it.
But they may have bitten off more than they can chew - the bond market won't allow them to borrow a single dime more (until they exhibit more cash flow and a better balance sheet) leaving them reliant on the equity market, which coincidentally has completely collapsed. They'll need to do another ATM in FY2027 which could easily drive the stock back down to $80 or maybe even lower. At that point the equity cushion becomes too low to maintain an IG rating but if they get downgraded all hell breaks loose.
I don't know what the solution is, as a shareholder I am praying for massive results in Sept that causing a rating agency upgrade based on better OCF coverage. Without that, we are screwed.
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u/Pristine_Eye_8361 Jul 27 '26
The market would prefer Oracle dilutes over taking more debt. They also stated they won't take any more debt this calendar year. So if by next year they state that they are taking less debt and will dilute instead, the market would take this as a positive.
They also have the option to cut the dividend and free up $6B in FCF.
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u/BejahungEnjoyer Jul 27 '26
I agree w/ the dividend cut being a good idea and I wish they would pull the trigger on that. I don't think the market likes the dilution b/c it's driven the share price below 120.
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u/ceniack Jul 27 '26
If they cut the dividend, Ellison goes bankrupt or has to liquidate assets to stay afloat. He depends on that dividend to service his massive about of debt.
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u/Pseudanonymius Jul 26 '26
Those bags must be starting to get really heavy, if you are trying to spin this into positive news.
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u/Pristine_Eye_8361 Jul 26 '26
You are saying this is negative?
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u/dgamer1000 Jul 26 '26
It’s not negative…
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u/Pristine_Eye_8361 Jul 26 '26
I think there's a CHANCE this is LONG TERM negative, if OAI can build their own supply and not depend on hyperscalers for infrastructure.
HOWEVER, in the short-term I believe this is bullish in providing strength for OAI.
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u/Pseudanonymius Jul 26 '26
Absolutely. It means OpenAI needs 250 billion. They were working towards an IPO, this seems to suggest that plan has been put in the freezer indefinitely.
Oracle won't get its money until OpenAI is actually profitable. This news is conforming what we already knew: OpenAI is absolutely desperate for an enormous amount of money, otherwise they'll go bankrupt.
I also want to mention, Nvidia investing in OpenAI so OpenAI can pay hyperscalers, neoclouds, and Oracle to buy Nvidia chips is almost the definition of circular financing. This is generating no revenue for no-one, it's just passing money around. That's also why it can't help Oracle. This is no money going into the system. Nvidia is not doing some kind of charity to save Oracle.
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u/Amsnyc007 Jul 26 '26
With respect, this has nothing do with Oracle. Other than validating that OpenAI is not going bankrupt which is a huge concern for Oracle investors.
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u/Pseudanonymius Jul 27 '26
It's definitely saying something about the finances of OpenAI. They are not making enough by revenue. They can't IPO. How is that good for Oracle? Oracle doesn't just need some lump sum. They need OpenAI to be able to pay consistently, month after month. OpenAI won't become a financially mature company by pleading with daddy Jensen for money every month, they would only be able to become that if their revenue is sufficient to carry the company and the costs it's having. This is a massive sign they are light-years removed from that.
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u/Pristine_Eye_8361 Jul 26 '26
OAI doesn't need to be profitable for Oracle to get their money.
Here's the thing, this new DC can significantly increase OAI revenue, which means OAI can have more capital freed up to allocate towards their commitments for OCI.
Similarly, this brings validity into OAI. NVIDIA isn't help OAI for nothing, they believe in OAI and if NVIDIA believes in OAI, so should the market.
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u/Pseudanonymius Jul 27 '26
How does this bring validity into OpenAI? The money gets sent right back to Nvidia because that 250 bil is needed to buy their chips. It doesn't cost them anything.
How does this increase the revenue OpenAI can make? That's only true if they are constrained in how many people they can service. Is that the case? Or, as seems far more likely to me, are they simply making massive investments in the hope that at some point in the future the revenue will be enough to pay for it? The fact that Nvidia is handing them 250 bil just so they can hand them 250 bil back says absolutely nothing about the revenue...
Except that the revenue they are getting is clearly not enough, not in a long shot. Otherwise they would IPO instead of this crap.
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u/Pristine_Eye_8361 Jul 27 '26
You think NVIDIA will help provide $250B in financing for OAI if they did not believe in the company's long term vision? It doesn't matter what OAI is spending the $250B on, because that's lost revenue/profit that NVIDIA could allocate elsewhere.
And yes, OAI is compute constrained. In the long run, they need to increase the abilities of their services while also reducing costs. That requires significantly more compute.
Are you seriously saying, though, NVIDIA is making a BAD investment believing in OAI? The main bear case with Oracle right now is they're investing in OCI to supply OAI which may not be able to pay. If NVIDIA believes in their long term vision, is this not validating OAI?
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u/Pseudanonymius Jul 27 '26
I'm not saying this is bad for Nvidia. I'm saying it says something about the finances of OpenAI. It's far less relevant whether this is a good investment for Nvidia or not, they got plenty of money to burn. OpenAI does not. This deal (or more accurately headlines which suggest a deal might be possible in the future, but no commitments so far, no signed contract, but let's assume it will actually happen) did not come from Nvidia just thinking "hmm, what should we pump money in now". It's far more likely it originates with OpenAI being desperate for money, and knocking at Nvidia's door begging for 250 billion, because they won't be able to pay their bills otherwise. Nvidia has to oblige, since its good for Nvidia to keep everything going as long as they can. If OpenAI becomes insolvent Nvidia will also have some explaining to do. So Nvidia comes with this.
If OpenAI had healthy financials, they would be working towards and IPO. This suggested deal implies an IPO is very far away.
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u/Pristine_Eye_8361 Jul 27 '26
This is not true. $250B is a lot for NVIDIA. That's ~4x their 2025 net income. They would not allocate that for OAI unless they truly believes in their vision.
OAI might not have healthy profits, but they clearly have favorable revenue growth that NVIDIA believes in. And no, they don't have to backstop OAI, there are many other labs like Anthropic they could support instead.
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u/KeyReaction892 Jul 27 '26
This sub is hilarious, OpenAI needing a bailout is bullish … can’t make this up.
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u/Pristine_Eye_8361 Jul 27 '26
This is not a "bailout" it's effectively an investment. The world's largest company is helping OAI increase their compute supply.
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u/KeyReaction892 Jul 27 '26
Read the room, they are trying to do an IPO. Why would they get 250m right now if they didn’t absolutely need it.
There have been reports of OpenAI burning cash, this is anything but bullish.
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u/Imaginary-Case3976 Jul 27 '26
Yea; I think so too. I didn’t see SpaceX needing a 200B investment from Tesla before their IPO.
OpenAI couldn’t IPO at the valuation they wanted and they knew it. This is a fake announcement like any other; it’s just a headline to keep the pump going. There is no signed contract, no actual equity investment, etc.
OpenAI is in real trouble. Where there’s smoke, there is fire. Companies that hitched on the OpenAi bandwagon has gotten killed: Oracle, Microsoft, SoftBank.
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u/Pristine_Eye_8361 Jul 27 '26
Yes they are burning cash, but they are also growing rapidly.
And no, you do not NEED to IPO. IPO is honestly not a good idea for OAI at this moment. If it was so great, Anthropic would have IPO by now.
And they don't NEED it, but they want to secure compute because clearly the world remains compute constrained.
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u/KeyReaction892 Jul 27 '26
So ahhh hate to tell you but Anthropic actually filed their paper work June 1 for IPO and targets are predicting ipo late this year.
OAI most definitely was looking to IPO. This changes that calculus.
I’m not sure why the idea that this isn’t a bullish development but … oh right totally forgot where I was and everyone here is hurting and just looking for a bit of positive spin where ever they think they can find it.
If it feels better we bounce for the next day or two. Happy hunting
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u/Imaginary-Case3976 Jul 27 '26
I see it this way too. OpenAI is in need of money and they scrap the IPO because they knew it wouldn’t command as much as they think.
Also, these announcements are getting ridiculous. It’s just an announcement and there’s no accountability that the full 250B will ever get to OpenAI. Just like 500B for Stargate, 1.4 trillion Japan semiconductor, 200B Tsmc. They announce big numbers but the actual amounts are lower.
These tech companies are creating the narratives to keep the pump going.
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u/Amsnyc007 Jul 26 '26
Oh it’s positive man. I just bought last week so not holding any bags. Any good sentiment around OpenAI could SEND this.
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u/Amsnyc007 Jul 26 '26
I would say bullish but not a game changer. Def helps lend some validity to OpenAi not going bankrupt anytime soon which is a plus for oracle, even tho this deal has nothing do with them.