In the tech industry, a notable deal has recently captured attention, as Oracle announced a $300 billion partnership with OpenAI. This news caused Oracle's stock to surge immediately, driving a collective rise in AI-related stocks, and the market experienced a period of enthusiasm.
However, as the initial optimism gradually faded, experts began expressing concerns about the sustainability of this massive transaction. Professor Benjamin Lee from the University of Pennsylvania's Department of Engineering and Computer Science described this deal as a "high-risk gamble." He warned that excessive investment by major technology companies in artificial intelligence infrastructure could bring unnecessary risks, as overbuilding may occur before the infrastructure becomes profitable.
In a recent earnings conference call, Oracle revealed that its remaining performance obligations (RPO) for the first quarter soared to $455 billion, an increase of 359% year-over-year. The contract with OpenAI accounted for nearly 95% of Oracle's new contract revenue in the first fiscal quarter. This substantial investment undoubtedly provides significant potential for Oracle's future development, but it has also raised concerns about the AI bubble in the market.
Professor Lee emphasized that overbuilding artificial intelligence infrastructure may not be a wise move in today's context of limited supply chains. Although demand for graphics processing units (GPUs) and data centers remains strong at the moment, future market demand is uncertain. He believes that if the demand for AI workloads decreases, investors may find themselves waiting longer than expected to achieve their anticipated returns on investment.
Although Wall Street currently discusses the risk of overbuilding AI infrastructure less frequently, some analysts suggest that the risk of underbuilding may be more severe than the risk of overbuilding. Professor Lee agrees that once AI applications become more defined, data center capacity will be crucial. However, until then, investors need to pay attention to these risks, as the future applications of technology remain unclear.
The multibillion-dollar deal between Oracle and OpenAI has sparked discussions about AI investments, raising the question of whether it is a new investment opportunity or a high-risk gamble, which remains to be tested by the market and time.
